B’ Bye or Should I Say Buy, Buy?
Posted on March 12th, 2010 by DarcyLast weekend on the radio show we co-host with the MN Real Estate Team and WE Teams of Re/Max, I hosted a fun and informative segment. Our regular hosts, Ryan O’Neill and Scott Wollmering, were in Florida winning awards from Re/Max. It was my normal week to be on the air, but I got a bonus … running the show. Kelly and I presented a busy segment. Luckily, we had you, the public, call in and make our show way more interesting than we ever could have on our own.
Needless to say, we still needed a topic so we weren’t just babbling away for an hour live on air! I invited a couple of awesome Realtor partners to join in our fun to help educate our audience. My partner in crime with the first time buyer seminars, Steve Howe, was there to enlighten the audience on first time buyer topics. We also had Zach Skattum “in the house” talking about the ever-so-popular REO sales — real estate owed, aka foreclosures.
On Saturday, our topic was ”B’ Bye or Buy Buy”. It was all about what was going away, or going Ba Bye in the near future making it so you should Buy Buy. The tax credit is going away the end of April. As a first time buyer or repeat buyer, you need to have a signed and accepted purchase agreement. Here’s a cool thing. If you’re brave and make an offer on a short sale, you only need to have the seller sign off on the offer. You do not need the bank to sign off in order to meet the April deadline. The main caveat is that short sales still take awhile, so there is no guarantee that you will get your sale closed by the second part of the credit requirement — closing by the end of June.
Another thing that is going “B’ Bye” — low interest rates. Back in January of 2009, the Federal Reserve began a plan to purchase $1.25 trillion dollars of mortgage backed securities (MBS) in an effort to keep the housing market afloat. Trillion? How much is trillion? That is such an incomprehendable number to me. Anyway, MBS’s are bonds backed by mortgages. Who knew? If the bonds sell low, then rates go up. Invertly, if bonds sell high, rates go down. So, with the Federal Reserve buying bonds, they’re selling high, keeping the rates artificially low. During the first week in March, the Fed had already purchased $1.2 Trillion. At the end of March, they are supposed to be tapered down to zero — no more buying of MBS’s. With that said, rates are anticipated to rise — to what level, we don’t know. The guess is somewhere between .5%-1%. And no one really knows when that will happen. Will it be immediate or lag a little? A lot of uncertainty.
So, with these to LARGE ticket items waving B’ Bye, it’s definitely time to ” Buy Buy” a home. You don’t want to miss out on free money from the government for the tax credit and for sure you’ll want to take advantage of the low interest rates. Remember, these are at an all-time 40 year low. It’s just not going to get better than this. Now, partner these up with some incredible first time buyer programs and low home prices … and you’ve got the recipe to “Buy Buy”. Don’t miss out!
Tags: 6500 tax credit, 8000 tax credit, down payment assistance, first time buyer programs, mortgage backed securities, tax credit
