Monday, June 28, 2010

After the Tax Credit

Ok, so the tax credit has officially expired for most people. The government has extended the deadine for those buyers who are already under contract but will not be able to "close" by June 30th, 2010. Since so many of these deals are with bank foreclosures and they take considerabley longer than most real estate transactions, the deadline extension will help many buyers who thought they would be getting the tax credit to actually get it. There has also been an exception to the tax credit made for military members who were deployed for at least 90 days during the tax credit offering ... those members may still qualify for the credit if they meet all the guidelines. So aside from that, now that the tax credit is "gone" did you see how the home sales numbers have tumbled? Maybe it's time the goverment left well enough alone and just let the market recover. Real estate runs in cycles, if left to it's own, it will eventually recover. Does artificially injecting money into the system really solve anything? Why not save all those billions and just leave it alone? Imagine a world where only truly qualified people could get mortgages and they got good deals on homes instead of inflated prices! That seems like a good thing to me. Buying a home is a great responsibility and can be the greatest source of wealth for many individuals in the future, if they come into it prepared and do the right thing. Responsible homeowners pay the mortgage because they can afford the home they chose. It takes planning, saving and please, use a Realtor, that's what they do for a living, walk buyers through the process of buying a home. Buyer representation is typically "free" as the sellers agreed to pay the buyers agent when they listed the home for sale (in MLS), so there is no reason not to. We are simply getting back to the responsible way of doing business, not anyone with a pulse can qualify for a "crazy terms" loan that they can't afford ... jobs matter, history matters, credit matters, as it should be. Even if you are not in the right place to buy a home now, talk to a Realtor, they can get you headed in the right direction so that one day soon, you too will be one of the lucky ones, a homeowner.
Keep paying rent and you are only paying someone elses mortgage, and what do you have to show for it after 2, 5, 10 years? A box full of reciepts. Think anyone will pay hundreds of thousands of dollars for that box of receipts? If you owned a home for 2, 5 or 10 years what would you have? A home to sell, possibly for a profit! At the very least you would have been in a home you loved, living the life you wanted (no landlord) and even if you break even when you sell, you will have lived somewhere for "free" for all those years. If you make a profit, well, yahoo! If you stay in that home for more than a few years, you will likely see a real profit. Then what? Sell and move to a bigger home? Keep it, take some of the cash value out and buy more real estate? Why not be a landlord yourself? Let someone else pay your mortgage, pocket the profit every month and when it's paid for (by other people) sell it for profit! People do become wealthy owning real estate, why not you?