Skip forward to present day, where buyer representation and seller representation is SOMEWHAT of an assumption.  However, I think some people are still confused.  When I list a home, I am responsible to the seller.  I prefer the new and next buyer come represented by their own agent.  That way there is NO conflict of interest.  I’m not saying I haven’t handled both sides of transactions in my 24 years of servicing real estate transactions, but those are special circumstances and that’s another blog altogether (having to do with integrity and believing in “win-win”).  Agency simply means my job is to represent your property in the marketing efforts and ensuing negotiations.  My first step is to initiate whatever means I can employ to get “product awareness” to the general public.  That means I’m first communicating with other agents, utilizing the #1 advantage Realtors have, which is the power of the real estate community!!  I employ the power of our Portland RMLS (Realtor’s Multiple Listing System) where all working Realtors are immediately notified of properties that come on market with detailed information, photographs and video tours.  Because over 90% of all buyers begin their new home or investment property searches on the web, your property deserves the very best online exposure possible. 

But, here’s where clarification is important.  As a listing agent I’m, personally, “famous” or “infamous” in quickly reacting to potential buyer inquiries.  I never even ask if someone has a real estate agent representing them.  If they want to see MY listing, I want to show them!  It’s in my best interest and the best interest of my seller for me to show my listings.  I know THAT particular listing!  Do I care if they have their own representation…absolutely NOT!  That's in the best interest of the buyer, which means ultimately, its in the best interest of my seller (everyone can walk away a winner).  So, therein lies the confusion.  When a seller calls and asks, “how many times have YOU shown the listing” it’s a meaningless question.  If you’re talking to me, I’ve shown it as many times as I had an opportunity!!!  But, that’s not representative of how many inquiries I may have had.  An agent will often get multiple e-mails and phone calls from both agents AND the general public, looking for any specific information they can’t garner from their web experience.  Once they have the information, they are quite likely to contact their own agent to view the property!  At higher price points, you don’t generally have buyers wandering “willy-nilly” through open houses or calling a ga-zillion agents for information.  Those buyers will hire a specific agent, utilize that agent’s expertise and contacts and have that agent organize a targeted and efficient tour of homes that fall within their chosen price point and other search parameters.  They don’t waste their time looking at overpriced listings or those that don’t present well on the web.  At lower price points, there are more buyers available who, perhaps, have not yet identified an agent of choice and will be more likely to call the listing agent to gather information or schedule a showing.  But, understanding exactly what you are hiring your agent to do is paramount to a successful relationship. 

If you are selling your home, you are hiring an agent to market your property!  This includes exposure to the other agents as well as enticement to agents AND potential buyers through descriptive narrative, professional photographs and multiple web displays.   You are also hiring their expertise on pricing and staging your home to sell.  Listen to them!  Remember:  “pricing, pricing, pricing is the new location, location, location”.  Once an offer is procured, your agent is your conduit for negotiations and a resource for various possible repair referrals. 

If you are buying a home, you are hiring an agent to provide service through arranging tours and professional advice through their understanding of the local real estate market.  Your agent is a great sounding board and support through brainstorming.  Once you’re ready to make an offer your agent is your negotiator, mentor and source for various referrals to lenders and property inspectors.  Remember:  “buy the least you can buy and still be happy”. 

This is a brief and simplified version of how our cooperative system can work to assure everyone has representation.

Portlanders are a frugal bunch and so taking advantage of every single possible tax credit is always prudent, don't you think?  I believe most everyone has heard about the 1st-time buyer tax credit of $8000.  But, you can't hear enough about a good thing so I will include some formerly posted FAQ's about that credit at the end of this post.  This home-buyer credit added to the abundance of inventory with adjusted prices and low interest rates has made certain price points start to move in the Portland Oregon real estate market.

Remember the difference between a "tax deduction" and a "tax credit" is that a credit is a dollar for dollar tax savings and a deduction means your taxable income is less.

There are other tax credits available and free $$$ from the IRS is always a good thing!!  Please click on the following link for more possibilities of saving:  http://bit.ly/TaxCredits

By now, most everyone has heard about the $8000 First-Time Homebuyer credit which allows buyers who have never owned a home OR haven't owned one in the past three years, to receive an $8000 credit on their tax returns.  Please see the frequently asked questions below that discuss the particulars involved in realizing this "free money"!!  Recently the NAR (National Association of Realtors) released a statement that not only could first-time buyers realize an $8000 CREDIT (not DEDUCTION...see difference in the FAQ's below) but that you could utilize that future credit towards your required 3.5% down-payment on FHA (Federal Housing Authority) loans!!  Sound too good to be true??  Well, theoretically "NO".  HUD (Housing and Urban Development) made several announcements that the $8000 tax credit could now be used for closing costs and pre-paid items on FHA loans.  However, NOT for the required 3.5% down payment.  Some states have already set up programs that will provide short term loans to borrowers that will use as collateral the $8000 tax credit.  Oregon has been "talking about" monetizing the tax credit for several months.  The problem is, where do they get the money that they will, in turn, lend to potential buyers?  This program is only for borrowers who close on their purchase by November 30th of 2009.  So, by the time the state or local agencies figure out how to help fund this process, the credit may be gone.  Since rates have risen as the stock market has improved in the past week or so, buyers may well want to consider finding a way to get a gift for the down payment (if they don't have their own monies), then negotiate to have the seller pay their closing costs and pre-paid items. That way first-time buyers can get the transaction completed before the credit is gone, collect the $8000 credit and still realize the present great rates.  Here are some frequently asked questions about the first-time buyer tax credit:

The “FIRST-TIME HOME-BUYER CREDIT”    (AND WHAT IT MEANS TO YOU, A FRIEND OR FAMILY MEMBER)!  

PLEASE pass the information to someone you know who might be in the market for their first home!!!

Q:  How much is the tax credit?

A:  The tax credit would be $8,000 or 10% of the purchase price, whichever is less. 

Q:  Who is eligible?

A:  Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit (included in the 2009 Economic Stimulus Plan) is available for the purchase of the primary residence by first-time homebuyers.

Q:  What defines a “first-time home buyer”?

A:  According the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.

Q:  Do I have to repay the $8,000?

A:  No.  Unlike the previous $7,500 tax credit that did have to be repaid (which made it essentially an “interest free loan”), the $8,000 does NOT have to be repaid, UNLESS the home is sold within three years of purchase.  If the home IS sold within that 3 years period the credit is simply reversed.

Q:  What if I have no tax liability?

A:  The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

Q:  Are there any income limitations on the tax credit?

A:  Yes.  The tax credit is strictly for individuals with adjusted gross income (AGI) of under $75,000 or $150,000 for joint filers.  AGI is total income for a year minus certain deductions, but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4.

Q:  If my AGI is a bit more than the designated $75,000 or $150,000 respectively, can I still claim the credit?

A:  It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose AGI exceeds the phase-out limits. 

Q:  What is the difference between a tax credit and a tax deduction?

A:  A tax credit lowers your tax bill dollar for dollar. A deduction shaves money off your taxable income, so the value depends on your tax bracket. For example, if you're in the 25% bracket, a $1,000 deduction lowers your tax bill by $250. But a $1,000 credit lowers the bill by the full $1,000, no matter which bracket you might be.

Q:  What type homes qualify for the tax credit?

A:  Included are single-family detached homes, attached homes like townhouses and condominiums, manufactured homes or mobile homes and houseboats (as long as all other criteria are met).

Q:  What is the time frame for completing my purchase to be eligible for the “First-Time Homebuyer” credit?

A:  This tax credit applies to properties purchased on or after January 1st, 2009 and before December 1st, 2009 (so there’s still lots of time).  First-time home buyers who purchased a principal residence on or after April 9th, 2008 and before January 1, 2009 may qualify for the former $7,500 tax credit (which must be repaid, but operates like a zero interest loan).  Purchase date refers to the date you closed escrow on the property.

Q:  What if I am eligible to participate in another state or local first-time homebuyer mortgage program? 

A:  You may now claim the credit (previously this credit was prohibited if you participated in any other first-time homebuyers initiatives).

Q:  What if the home is a short sale or foreclosure?

A:  The credit does apply.

Q:  What if the home is in disrepair and I’m willing to do the work but worried about getting the home financed?

A:  There are two possibilities for financing:  the FHA 203k loan and a conventional “Purchase&Renovate” loan (call or write for more info on those forms of financing).

DON'T SIGN INTO Fbaction.net

As if the swine flu and the economy weren't enough to worry about, now there are confirmed reports that a phishing attack is underway aimed at Facebook users.  It consists of an e-mail containing text similar to the message below.  Please be aware and don't be lured into signing into a malicious site that will steal your information.  The message body will apparently read something like this (with YOUR FRIEND being replaced by the name of a friend of yours):

YOUR FRIEND sent you a message.

Subject:  Hello

"Visit http://www.facebook.com/l/4253f;http://fbaction.net/"

Do take the time to read and check the URL carefully before you sign into the bogus Facebook site and give away any information.

Are the old models of fancy, grand or impressive “brick&mortar” real estate companies a thing of the past? Will we see more and more unaffected and/or simplified offices or “virtual” offices as our real estate profession morphs into this new age of “cost-effective” business? The “Old Brokerage” model was forced to focus on recruiting to pay for the lavish accoutrements. It became a numbers game right? “The brokerage with the most agents wins”. The traditional brokerage models focus on recruiting as many people as they can into their brokerage. As they do this, they tend not to focus on the actual agent they are hiring but only on acquiring another body. When I began my career in the mid-80’s, there weren’t many agents and the offices were small. Then, I felt training was a priority and you had an opportunity for lots of personal attention from your Broker. We had weekly classes and the training Broker was always available to “brainstorm” problems and give advice. These days, both subconsciously and consciously, people know they don't have to work hard to be part of brokerage. Every traditional brokerage in town allows any agent to hang their license with them if they have a pulse and a real estate license. I believe part of the new model of the new agent in our new world will be an emphasis on training, on reliable mentors and on experience. The advent of so much online information makes the role of the agent more as a “trusted advisor” rather than a dispenser of facts and figures. We should relish the onslaught of that kind information and the possibilities that our new role will be more engaged, more educated and more flexible.

The changes are already happening. The consumer is demanding more financial intuitiveness, more real estate opinion based on field experience and more disclosure. First, the brokerage will only focus on quality of agents. Second, the structure of how an agent works will change. Third, the service given to the consumer will be instant results, knowledge, and services. The consumer will also see the value of this “New Brokerage” because there won't be inexperienced agents charging the same commission as the experienced agents. 

1)  Understand and Utilize the New Tax Credits!  The latest government stimulus package gives a special tax credit of up to $1,500 for making certain home improvements (mostly for energy efficiency).  Also, if you are buying a primary residence and have not owned a primary residence in the last three years, you may qualify for the new $8,000 first-time homebuyer tax credit.  It can be claimed on your 2008 or 2009 tax returns.  You do have to close by December 1st, 2009.

2)  Consider Paying Points for your Mortgage Transaction or having the Seller Pay the Points.  Mortgage “points” are upfront fees that you pay in order to lower your mortgage interest rate.  One point is equal to 1% of the loan amount.  You can negotiate into your contract for the seller to pay points on your behalf.  In addition to the significant interest and payment savings you can enjoy, you will also receive a tax deduction this year for points paid by the seller for your loan.  If you are selling a home, you can offer to pay those points for potential buyers as part of your marketing efforts.  This will make your home more affordable for potential buyers and help your listing stand out from the from the other available inventory.

3)  Carefully Structure Your Real Estate Short Sale Transaction.  A real estate short sale is when a home owner sells their property for less than what they owe on the mortgages and/or lines of credit and the lenders involved give their permission to do this by forgiving the difference and/or releasing the mortgage lien on the property.  If you are selling a home as part of a short sale transaction, make sure to negotiate for a release and full satisfaction of the mortgage from your lender. 

4)  Utilize the Special Options Available for Seniors Age 62 and Older.  If you are 62 or older, you could use a reverse mortgage to buy a new home without making any monthly mortgage payments.  This is an opportunity if you are contemplating a move but are worried about trying to sell your current home in this market.

5)  Use a qualified Mortgage Professional.  With all the confusion and misinformation in today’s market, it is more important than ever for you to work with a Certified Mortgage Planning Specialist who has the training and experience to help with the home buying and/or refinancing.  Don’t hesitate to call for qualified referrals.

6)  Use an Experienced Real Estate Broker.  Use your real estate professional to brainstorm ideas and compare strategies. 

PLEASE pass the information to someone you know who might be in the market for their first home!!!

Q:  How much is the tax credit?

A:  The tax credit would be $8,000 or 10% of the purchase price, whichever is less. 

Q:  Who is eligible?

A:  Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit (included in the 2009 Economic Stimulus Plan) is available for the purchase of the primary residence by first-time homebuyers.

Q:  What defines a “first-time home buyer”?

A:  According the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.

Q:  Do I have to repay the $8,000?

A:  No.  Unlike the previous $7,500 tax credit that did have to be repaid (which made it essentially an “interest free loan”), the $8,000 does NOT have to be repaid, UNLESS the home is sold within three years of purchase.  If the home IS sold within that 3 years period the credit is simply reversed.

Q:  What if I have no tax liability?

A:  The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

Q:  Are there any income limitations on the tax credit?

A:  Yes.  The tax credit is strictly for individuals with adjusted gross income (AGI) of under $75,000 or $150,000 for joint filers.  AGI is total income for a year minus certain deductions, but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4.

Q:  If my AGI is a bit more than the designated $75,000 or $150,000 respectively, can I still claim the credit?

A:  It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose AGI exceeds the phase-out limits. 

Q:  What is the difference between a tax credit and a tax deduction?

A:  A tax credit lowers your tax bill dollar for dollar. A deduction shaves money off your taxable income, so the value depends on your tax bracket. For example, if you're in the 25% bracket, a $1,000 deduction lowers your tax bill by $250. But a $1,000 credit lowers the bill by the full $1,000, no matter which bracket you might be.

Q:  What type homes qualify for the tax credit?

A:  Included are single-family detached homes, attached homes like townhouses and condominiums, manufactured homes or mobile homes and houseboats (as long as all other criteria are met).

Q:  What is the time frame for completing my purchase to be eligible for the “First-Time Homebuyer” credit?

A:  This tax credit applies to properties purchased on or after January 1st, 2009 and before December 1st, 2009 (so there’s still lots of time).  First-time home buyers who purchased a principal residence on or after April 9th, 2008 and before January 1, 2009 may qualify for the former $7,500 tax credit (which must be repaid, but operates like a zero interest loan).  Purchase date refers to the date you closed escrow on the property.

Q:  What if I am eligible to participate in another state or local first-time homebuyer mortgage program? 

A:  You may now claim the credit (previously this credit was prohibited if you participated in any other first-time homebuyers initiatives).

Q:  What if the home is a short sale or foreclosure?

A:  The credit does apply.

Q:  What if the home is in disrepair and I’m willing to do the work but worried about getting the home financed?

A:  There are two possibilities for financing:  the FHA 203k loan and a conventional “Purchase&Renovate” loan (more to follow on those forms of financing).

IS IT THE RIGHT TIME TO BUY REAL ESTATE????

Have you ever thought about including investment real estate/rental properties as part of your overall retirement portfolio or wealth management or to develop future income streams?  Hector Ariceago of First American Title Company has generously offered his time to teach a class on utilizing a FREE software program he has personally developed!!  This program can assist an investor in analyzing the potential for income property and sheltering earned income.  There are many different ways to realize gains from investment property and many of these will be covered in this class.

· Capitalization Rates

· Net Operating Income

· Cash on Cash returns

· Gross Rent multipliers

· Income Tax Write-offs

· More

If you are interested in receiving the FREE CD, please write or call and I will burn a copy and mail it to you.  The class will be held on Wednesday January 28th, 2009 at the KOIN Tower, 222 SW Columbia Ste 400, Portland, OR 97201.  The doors will open at 5pm and the presentation will begin at about 5:30pm and will cover any questions you might have regarding the software program.  There will be light snacks provided.  I’d love to see you there.  The class is free and for your information and education.  Nothing to buy, no obligation.  Please RSVP to me:  Janeese Jackson jj@janeesejackson.com or 503-709-0802. 

Another piece of good news was that Freddie Mac said it is eliminating upfront fees charged to lender for fixed-rate purchase loans for “super conforming” mortgages above the $417,000 conforming loan limit.  Because Fannie and Freddie are competitors, it’s very common for one to follow the other’s lead on fees.  Also, Freddie Mac said it’s eliminating or reducing delivery fees on “super conforming” mortgages in the range of $417k to $625,500 that it purchases after January 2nd, 2009. 

Hopefully, this could definitely influence a loosening of our credit markets.  I just experienced my first “sale-fail” in the jumbo market (above $417,000 in the Portland, OR marketplace) due to an inability to secure financing.  The property would have easily appraised and the borrower was more than qualified.  The rules on the jumbo financing scene have been changing frequently and we got caught in the “cross-hairs”.  I equate this failed transaction with traversing a high mountain pass in wintertime.  It’s all about timing!  At one moment, you are nimbly navigating through the snow flakes and the next second you’re inextricably buried in the snowfall.  Only a day later, other drivers are motoring on dry pavement. 

Credit markets loosen, people are more confident and less stressed about acquiring mortgage loans, the housing market starts to move again and I do believe that will strongly affect other aspects of our suffering economy….or at least it’s one “giant step”!!!

http://www.rmlsweb.com/temp%2Fdocuments%2F1500-1699%20Market%20Action%20and%20Statistics%20Menu%2F1510%20Market%20Action%20-%20October%202008.pdf

1)  FIRST-TIME BUYERS:  There are good pricing opportunities in our local market, as a matter of fact, some of the best rices we've seen in years.  Interest rates are still historically low!  there is a $7500 tax credit available for 1st time buyers (and there is lobbying going on right now to make it a "tax grant").
2)  MOVE-UP BUYERS:  there are definitely some good buys at the mid-range price point in our market.  That 2nd/3rd tier pricing is very soft due to a lot of inventory in that value range.
3)  INVESTORS:  Warren Buffett says:  "I sell when people are buying and I buy when people are desperate".  It's definitely not about taking advantage of people when they're down, it's about taking opportunities in an already existing marketplace.
4)  SUBDIVISION LANDS:  Some builders and/or developers are over-leveraged and need to sell their existing land inventory.
5)  FORECLOSURES AND SHORT-SALES:  Bank-owned properties and those selling short of what's owed on the property.

For those of you who don't know, REO is "Real Estate Owned" and is an expression used in the Real Estate industry to describe a property owned by a bank as a result of a foreclosure on one of it's loans.

Couple of important things to remember on REO's:

· Most REO properties are sold "as is".

· The seller, of course, has not lived in the property so they will not make any representations about its condition or provide warranties against defects.

· REO sellers are not likely to accept changes to the purchase contract once the original agreement has been reached.

· REO sellers have separate purchase contracts that all parties must sign in addition to the standard sale agreement and they typically determine the title company and that, unfortunately, is not negotiable.

If you would like to receive a list of pre-foreclosure and foreclosed properties, please let me know and I'll add you to my list....jj

I’m not dismissing this financial crisis as a theatrical production … our country really does have financial issues to work through that will affect us all.  But we’re not going to suddenly fail as a country overnight.  The media reported Monday being the biggest one-day drop in history, which is true, but on a percentage basis it wasn’t even close to Depression-era drops or October 1987.  And, keep in mind lots of money through timely investments can be made during times of financial stress/opportunity!  There is a liquidity problem to be fixed, but we’ll survive even if it takes some time for lawmakers to find the appropriate long-term method.  The blame game is a lose-lose proposition.  Learning from mistakes makes winners.  It’s also easy to join the band-wagon of focusing on not wanting to “bail-out” Wall St companies that, obviously, made some very bad financial decisions.  That was greed, but that was “then”.  I do believe we have to remember the “trickle-down” effect.  It can be easy to try to divide the so-called “haves” from the “have-nots”, but we are all in this together.  If wealthy Americans aren’t spending money, then middle class businesses aren’t making sales and working class families are losing jobs and so on.  No matter how you feel about the bail-out, we have to do something to revitalize credit markets and get money flowing again.  There will not be an economic recovery without a housing recovery. 

Now what practical “action” steps can anyone take to protect your personal finances and your income in the short-term? 

1)     Control your spending. 

2)     Limit unnecessary borrowing. 

3)     Pay off credit cards and other high-interest debt. 

4)     Save as much as possible out of your paychecks to make sure you have a “rainy day fund”.  Most experts suggest at least 6 months of reserves.

5)     Business people and those in sales positions should go back to basics, and evaluate your marketing budgets.  Don’t waste money on empty leads or advertising that doesn’t produce consistent, measurable results.  Only spend on what makes you money and brings in solid business.

6)     Embrace the principals of saving and cutting back on discretionary spending until credit cards are paid off.

7)     For those with cash reserves and low credit card debt, support small businesses as long as you have excess funds and help keep our local economy strong.  Look for opportunities in stocks, bonds, money market accounts or real estate.

8)     If you are in the market for a home or investment property to round out your portfolio, there are some fantastic buys out there, and interest rates are still near record lows.  Many sellers are willing to negotiate. 

In the real estate market, money/credit is available but some of the rules have changed:

Here’s a summary of the new wait times if there’s a bankruptcy or foreclosure:

1)     Bankruptcy Chapter 7 – 4yrs from discharge date

2)     Bankruptcy Chapter 13 – 2yrs from discharge date

3)     Multiple Bankruptcy’s – 5yrs from most recent discharge

4)     Foreclosure – 4yrs

5)     Short Sale or Pre-foreclosure  – 2yrs up to 4yrs depending on investor vehicle

6)     Deed-in-Lieu of foreclosure – 4yrs for purchases with 10% down.

Now, if there are extenuating circumstances (such as divorce or medical reasons), there can be exceptions to some of the wait terms.  Talk to a reputable lender for more information. 

When negotiating a loan modification with your mortgage lender, try this four-step process:

1)      Make sure you are dealing with your lender’s loss mitigation department.

2)     Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled.  Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.

3)     Send the lender your financial statements, employment records, tax returns and bank statements outlining how you would be able to afford the modified loan terms under your present financial circumstances.

4)     Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home.  The key is to show how the lender is likely to recover less money through foreclosure than they would be working with you on your proposed modification plan.

If you know someone who is now late on their mortgage as a result of an ARM (adjustable rate mortgage) re-adjusting to higher payment they can’t afford AND they were clean (one 30day late or less in the previous 12mo), then they could be eligible to refinance into an FHA 30yr loan with very good rates/terms.  Basically this is to help ARM victims who were solid borrowers prior to the re-adjustment.  The borrower must meet current FHA loan limits and be able to qualify (full-documentation only) as normal.

Conversion of primary residence to rental/investment property (while purchasing a new home):

1)     must qualify using both PITI (principal, interest, taxes, insurance) payments

2)     must show 2mo PITI (both homes) in liquid assets (bank accounts, stocks, 401k) if there is 30% equity in the current residence

3)     If not 30% equity in current home, the liquid assets must show at least 6mo worth of PITI payments

4)     Rental income can be used if minimum 1yr agreement AND proof of 1st payment or deposit into bank account

5)     Some lenders/investors will not allow rental income for qualifying unless the client has had at least a year history of being a landlord.  Varies based on programs.

Keep the faith….all markets are temporary.

The Housing and Economic Recovery Act of 2008 includes a tax credit for qualified purchases between April 8, 2008 and June 30, 2009.  The credit is 10% of the purchase price not to exceed $7,500.

To be eligible for the credit, the taxpayer's adjusted gross income cannot exceed $75,000 if they file their tax as a single person or $150,000 if they are married filing jointly.  Adjusted gross income is total annual income reduced by things like qualified retirement contributions, alimony, moving expenses, and a few others.

The taxpayer and spouse, if married, must not have had an ownership interest in a principal residence during the three years prior to the purchase of the home in which the credit is being claimed.

The tax credit is repayable over a 15 year period at zero interest.    Each year 6.7% of the tax credit is repaid until it is repaid or the home is sold whichever comes first.  The first payment isn't due until two years after the home is purchased.  If the home is sold prior to repaying the tax credit, the balance of the unpaid credit is due in that tax year.

A buyer purchasing a $200,000 home with a FHA mortgage would require a 3.5% down payment or $7,000.  The buyer would also be responsible for their closing costs.  The $7,500 tax credit effective at filing that year's income tax return would recover the $7,000 down payment plus $500 of the closing costs paid by the buyer.  Obviously, they have to have the money for the down payment at the time of closing and won't get the tax credit until they file their tax return the next year.

You have a $100,000 FDIC limit for single accounts, $100,000 for your share of joint accounts, and up to $250,000 for certain types of retirement accounts, including IRAs. For example, if you have an individual account, a joint account and an IRA at one bank, you'll get $100,000 of FDIC coverage for each one of those accounts. You can estimate your coverage limits at the FDIC's electronic deposit insurance estimator. For more information, see the FDIC's FAQs about deposit insurance.

The reason you might not recognize many of the names on the top of the interest-rate list is because many of the banks offering the best money-market rates now are Internet-only banks. They're often able to offer such high rates because they don't have the overhead of bank branches. Some have names you'll recognize, such as huge insurance company MetLife, which now has an Internet-only bank. And ING, whose Orange Account is always near the top of the interest-rate list, is a giant international insurance company.

For a list of the top-yielding money-market accounts available in your area -- and top yields on other types of accounts -- see our Yields & Rates page.

I'm wondering why the current state of the stock market is not driving people "towards"...not "away" from the real estate market???  But, just in case how the Federal Deposit Insurance Corporation works keeps you up at night, here are some facts:

The Low Down on FDIC Insurance

After last month's failure of California-based IndyMac Bank, many people have wondered how safe their accounts really are. While the Federal Deposit Insurance Corp. (FDIC) guarantees most bank deposits, here are some important details to remember.

What types of accounts are covered?

The FDIC protects checking and savings accounts, certificates of deposits (CDs), Christmas club accounts, and money-market savings accounts. However, Stocks, Bonds, and mutual fund shares...even those purchased through an FDIC bank...are not protected.

What are the limits of FDIC insurance?

Bank accounts that have less than $100,000 in them and certain retirement accounts (IRAs held in CDs and money market accounts) that have less than $250,000 are fully protected by the FDIC even if the bank fails. If you want to exceed these account limits, you can keep your deposits fully protected by:
1.        Dividing your money among several different bank companies. Note that dividing your money among several different branches of the same bank does not guarantee full protection.

2.        If you prefer to keep your money in the same bank company, you can still be fully protected if you divide your money among various "ownership categories". Ownership categories include a personal account in your name, a personal account in your spouse's name, a joint account co-owned by you and someone else, and a trust account that names someone other than you as a beneficiary.
What are some common ways customers end up with uncovered deposits?

If you purchase a CD through an investment broker, this CD will often be placed with a bank at which you already have an account. If the CD and your other accounts exceed the $100,000 limit, you may not be full protected. Before purchasing CD's through a broker, ask where they will be placed.

In addition, keep track of the interest your accounts earn so you don't exceed the limits this way.

What will happen if your bank fails?

In most cases, depositors can fully access their funds by the next business day. Typically, failed banks are closed on Fridays, and funds are available by the following Monday. People can also usually use their ATM cards and write checks over that weekend as well. And for customers whose accounts exceeded the FDIC limit, all hope is not lost. Though this amount has varied, they can generally expect to recover 70 cents on the dollar of their uncovered funds after the bank's assets are sold.

The good news is that the vast majority of US banks are secure, but the above information will help you stay fully protected.

For more information, visit www.fdic.gov.

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