After years of renting, you are finally looking to own your own home.  So what should you know about the pros of buying versus renting?  Here are just a few things to consider among the advantages of buying your first home:

• You are building equity, rather than throwing your money to a landlord.  When renting you don’t have the advantage of decreasing your mortgage balance and building equity like you would when buying your first home.
• Ownership is an important part of what makes a house a home. Renting property does not allow for the major changes you would like to make to personalize your home.  When you buy a home, you have the ability to make everything exactly as you want–so remodel and redecorate to your heart’s content.  And if you find that your needs change, your home can continue to be adapted inside and out for those changes.
• In many instances, mortgage payments are lower than rental payments per month. According to ginniemae.gov statistics, after 6 years the homeowner’s payment is lower than the renter’s monthly payment.  Also, when including the tax saving advantages of homeownership, the homeowner’s payment is less than the rental payment after 3 years.

So why not take that exciting step to homeownership in the beautiful Gulf Coast AL area and contact experienced and friendly local Realtor Barbara Reeves today.

West Mobile/ Semmes is one of the largest areas of listings in Mobile County, with 525 current home listings. In November, 35 homes sold for an average price of $146,160 or $84.22/ square foot. These homes sold after an average 76 days on the market, which is relatively quick compared to the rest of Mobile/ Baldwin.  There are 82 contracts pending for an average price of $169,233 or $81.62/ square foot.

West Mobile County has 296 homes available and they have averaged 127 days on the market. The average list price is $247,928 or $103.20/ square foot. 28 homes sold in November for $152,315 and the 40 pending contracts average $227,916 or $94.31/ square foot.  Overall, West Mobile has a wonderful inventory and homes are moving in three months or less.  Your local real estate expert can assist you through every step of the home buying process.

There is no doubt that the first time home buyer tax credit is a great thing but there are a few things to know before you assume that you qualify for the full $8,000.  The tax credit breaks down as follows:
Who qualifies? First time home buyers and people (or spouses) who have not owned a home for the previous 3 years.  You must purchase your home between January 1, 2009 and December 1, 2009.

• What qualifies for the first time home buyer’s tax credit? Only a primary house qualifies.  It does not matter if it is a single family home, duplex, townhome, condo, apartment or co-op, if it is a primary residence it will apply.

• What is the amount of the first time home buyer’s tax credit? $8,000 is the maximum amount of the credit.  There are 2 factors at play when it comes to getting the credit: The cost of the home and the income of the person or married couple purchasing the home.  The credit can be 10% of the closing price up to $8,000 or a person making $75,000 or less or a married couple making $150,000 or less are eligible for the full $8,000.

• Do you qualify for the first time home buyer’s tax credit if your income is higher? Yes and no.  If you make more than the $75,000/$150,000 limit you get less of a credit.  The maximum income is $95,000 for singles or $170,000 for couples.  If you make more than the maximum income you are not eligible for the tax credit.

The tax credit is a real boon for first time home buyers and does not have to be repaid.  If you qualify for the tax credit and have been considering purchasing a new home there could not be a better time.  Low interest rates, low home values and the first time home buyer tax credit all add up to the right time to call an experienced local Realtor.

Resource and for more information: Realtor.org

If you decide to purchase a home by December 1, 2009, you will be entitled to an $8,000 tax credit. This amendment to the economic stimulus bill will be available to if you purchase your first home between 1/1/2009 and 12/1/2009. Home buyers will be entitled to claim a total tax credit of $8,000 or 10% of the purchase price, whichever is less.  To avoid possible abuse of this credit, it is only allowed for your primary residence and will only have to be re-paid if said house is sold within two years of purchase. Keep in mind that you must close on or before December 1, 2009 to be eligible for the credit. Most closings take about sixty days, so with that in mind you must go under contract by October 2nd, 2009 – this gives you seventy-three days from today to find your first home. If you manage to meet these deadlines, all you have to do to claim your credit is fill out I.R.S. Form 5405.

For more information about this credit go to the IRS website.

If you are a first-time home buyer, before you even look at houses for sale, the most important thing you can do is figure out exactly how much you can afford on a mortgage payment per month. This will save you wasted time and the disappointment of looking at houses that you may later learn that you simply cannot afford. You first must figure out your debt-to-income ratio. Lenders prefer that you use 36% and under, but you might want to consider using 28% of your gross monthly income for housing expense. Following are the steps to figure out the math:

1. Figure out all of your debt. Multiply your gross monthly income by .36 to find your total allowable monthly debt.
2. Add up all of your fixed monthly expenses.
3. Subtract your fixed monthly expenses from your total allowable monthly debt.

This number is the amount that you have for your mortgage payment, your home owner’s insurance and your property taxes.

For more help figuring out your total allowable monthly debt see a home affordability calculator.

If you are in the enviable position right now of looking to buy a home, enjoy the current market: the buyer’s market! Many folks that have to sell their homes right now are happy to start a dialogue with a potential buyer, so arm yourself with any and all information to get the best deal possible!

• Right now you have more time to look, so you will be better armed with the knowledge of which houses have been sitting on the market for a while. These homeowners might be more likely to negotiate.
• Consider looking at new construction. Builders sometimes offer incentives and sometimes have very attractive financing programs.
• In certain areas that have been hit a bit harder by the market downturn, you certainly do have the upper hand whilst negotiating – and can always ask for an upgrade or a major repair before finalizing the deal.
• Some buyers are asking for a written warranty on appliances and certain structural repairs. Down the road this could be a big money-saver for you.
• Motivated sellers are more likely to work with your timeline. Don’t be afraid to ask if the closing can be pushed out.
• Even some lenders are willing to negotiate. You might ask for free private mortgage insurance, a better interest rate or even lower closing costs.

For more information on the current real estate market go to Housing Predictor.

If you are planning to become a first-time home buyer, the following information about what occurs during a closing will keep you in-the-know.

• When you are ready to make an offer on a home, it is good to make an offer that is 10% less than the asking price. This will give you plenty of room to negotiate with the seller.
• When you make a formal offer, you must pay 1% of the sale price as “earnest money”. This lets the seller know that you are serious about your offer. 
• You will have contingencies, such as getting proof of proper financing and a good house inspection.
•  You will hire a home inspector that will give the home a complete inspection, to catch any possible problems the home may have.
• When your offer is accepted by the seller, a legal and binding contract is drawn which states sell price, details of buyer’s or seller’s obligations, and date of possession.
• The required “settlement sheet” provides a list of all monies paid at closing, including commissions and escrow amounts.
• There will be a mandatory title search, and title insurance and an application for homeowners insurance is required.
• Various closing costs will be paid such as the appraisal fee, the credit report fee, your taxes and the document preparation fee, to name a few.
• Utility service and mortgage payment transfers will be arranged.

For more information on the closing process visit Survival Guide To A Real Estate Closing

Buying your first home can be a very exciting milestone in a person’s life. It is very easy to picture all of the good times you will have there in the future, but many people get lost in the excitement and forget to plan for a rainy day. To avoid losing that home to unforeseen circumstances down the line such as a job loss or an illness, keep these things in mind when considering purchasing your first home.

• Make sure that you have enough in savings to cover your mortgage while you find a new job, should you lose your job. Many experts recommend at the very least to have six months worth of savings to cover all expenses, including the mortgage.
• Understand before purchasing your home, all of the expenses that will be involved to maintain the home. If you are considering purchasing a fixer-upper, make a list of all of the inevitable things that will need to be replaced or repaired and their costs. 
• Consider your other expenses, such as your car payment or transportation costs, taxes, etc. and whether or not this new home will be affordable for you.

For more information on the First-time home buyer tax credit go to Federal Housing.

Choosing the right community is so important, as how you can you really love where you live unless you love the neighborhood? In the frenzy of finding a home and scheduling moving day, many people forget that researching the neighborhood is one of the most important ways to insure happiness at your new destination. Before making your final decision on a home, don’t forget to:

• “Profile” the neighborhood. Ask yourself these questions: Is the quality of the school system important? Is the commute do-able for you? Do you like to be within walking distance to shops and restaurants? Do you like quiet?
• Once you zero in on a neighborhood you like you must research all school information, crime statistics, parks and recreation, neighborhood association fees and tourist attractions. Armed with this information it will be easy to make a wise decision for you.
• Take the time to visit. Don’t downplay your first impression. Take note of the community’s rush hour patterns, it’s social ability factor, it’s streetlights at night. Drive by the schools. Shop in the local grocery store. Try to meet some of your potential neighbors. All of these visual clues can be very revealing.

For more interesting ways to figure out if a neighborhood is right for you click here.

February was a difficult month nationwide for housing, and Mobile County was not exempt. In the Springhill/ USA area, February saw 11 homes sold for an average of $175,695 ($112.22/sq ft). This is a 24% drop from January. Nineteen pending sales averaging $265,643 ($94.04/ sq ft) is a significant drop from January’s $300,738 average ($113.57/ sq ft).

The Downtown/ Midtown area of Mobile held its own in February, with the average sold home actually increasing from $99,497 ($61.24/ sq ft) in January to $126,449 or $72.59/ sq ft! Values of homes pending sale rose slightly from an average of $104,740 in January to $110,696 in February.

The best news here is clearly for buyers…time to get off the fence and take advantage of prime conditions for homebuying. You have large inventory, low prices and tax incentives! Contact Barbara S. Reeves, REALTOR, to assist you in finding your dream home in Mobile County!