Iowa City Real Estate Blog: September 2009

Time is a tickin' on the first time home buyer tax credit, so if you're still thinking it's probably time to put those thoughts into action...

I know there are many first time home buyers out there wondering about the first time home buyer tax credit and whether they should go for it or not. Now that we're almost down to the last 60 days, I thought I'd clear up a couple of questions that I know first time home buyers have.

First of all, at least here in the Iowa City area there is still time to find and close on a home before the deadline of November 30, 2009. There will be exceptions, like short sales, where there won't be enough time to close. Generally speaking though the majority of our listings on the MLS are regular resale properties, so in normal circumstances you should have time to find and close on a home before the deadline for the tax credit.

So you have enough time. How about financing? First of all, don't listen to everything they tell you in the media. You won't always need to put 10% - 20% down. With an FHA loan you will need a low 3.5% down and your credit doesn't need to be perfect either - reasonable credit will do. Here in the Iowa City and Coralville area FHA loans are extremely popular and don't take any longer to process than a regular loan. If you're thinking of moving to a rural area like North Liberty, Solon or Tiffin, then a USDA, Rural Development Loan may be perfect for you. Both of these loans assume that you will be living in the home for a longer period of time.

Now what if you're not intending to live in the home for more than 3 - 5 years? Iowa City is a relocation town. A lot of times people relocate to the area for the University of Iowa or the UI Hospitals and it's pretty common for them to stay in the area for around 3 - 5 years. The local banks have some excellent in-house loan options for just this kind of scenario with 100% financing on 5 - 10 year ARM's (Adjustable Rate Mortgages) at extremely good rates. Hills Bank posts their rates online for you to check out here. It goes without saying that although the banks came up with these loans to cover a demand for those relocating to the area, they're also very popular loans with anyone buying a home who may not qualify for an FHA or RD loan. Just as an example, in the current market it's become more difficult to finance new construction condos. That's the kind of scenario where an in-house ARM is the perfect solution.

So how long do you have before you run out of time for the first time home buyer credit? You probably need to be out there looking at homes now. Depending on the lender, you also probably need to have an accepted offer by October 31 to comfortably make the November 30 deadline. Lenders typically need 30 days after getting an accepted offer to process the loan. Larger banks may need more. My clients usually work with the smaller, local banks and they can often speed up the process, depending on the circumstances. My shortest processing time was 18 days from accepted offer to closing and that was a VA loan, so I think that speaks for itself...

So what do you think? Is it time to stop wondering and time to get moving? If you'd like some help figuring out your options, just contact me either by email or @ 319-400-0268.

Best of the Area List: Press Citizen readers vote on some of the best things about the Iowa City and Coralville area, including North Liberty and Solon.

The Press Citizen posted the results to its annual citizen vote on the Best of the Area at the weekend. It includes 60+ categories ranging from Restaurants and Food to Shopping and Services, Arts and Entertainment, Kid Stuff, Outdoor and Facilities for Seniors. They also had a special category for the most influential person in the area and from my last post you know that is Kirk Ferentz, our oh so popular coach of the Iowa Hawkeye Football Team.

Below is a list of about a dozen of what I think are the most interesting to anyone relocating to the Iowa City area. If you're not a first timer to my posts you will know I relocated to Iowa City myself 10 years ago. I know what interested me at the time, plus of course I know the interests of clients I've helped find homes in the Iowa City area, so I'm working from that too...


Best financial institution in the area: Hills Bank

Best live entertainment venue: The Mill
Check out their calender on the website and you'll see they've got a lot going on there this week.

Best Bar: Joe's Place
Joe's Place also took the best bartender vote for Rob Boulter

Best book store: Prairie Lights Bookstore (Great coffee there too)

Best place to take kids on a rainy day: Iowa Children's Museum @ Coral Ridge Mall, Coralville
(Also voted best place to host a children's birthday party).

Best bike shop: World of Bikes

Best senior friendly feature of Iowa City: Iowa City-Johnson County Senior Center

Best place for senior fitness: Coralville Recreation Center

Best hiking trail: Hickory Hill Park
City Park was the voters choice for developed urban city park. Hickory Hill Park was chosen for its more unspoiled beauty.

Best biking trail: Sugar Bottom Recreational Area located between North Liberty and Solon

Best bike shop: World of Bikes

Best place to enjoy nature: Lake Macbride

Best outdoor store: Fin & Feather

The largest category was restaurants and since it didn't seem fair to pick one over another for this post I decided to take the easy way out and let you know who makes the the best pizza in town. That would be  A & A Pagliai in Iowa City. Here's link to the full list of the best aspects of the Greater Iowa City-Coralville area It also includes info on the runners up.

Now of course it goes without saying, we have a lot more to offer in the Iowa City area than just the 60+ categories on this list. All this does is give you a tiny slice of what's available in a very diverse area with a real abundance of opportunities and options. The Greater Iowa City-Coralville area is really an exceptional place to live (and work) as you will see when you follow my posts in the coming months.

Photo Courtesy of Howard Horan, HHoran Studio, Iowa City

Best of the Area List came out this weekend - But the only talking point today is college football and the Iowa Hawkeyes!

Iowa City was not lacking in excitement the past weekend. The Hawks made headlines when they beat, crushed Penn State, making them heroes in our town. Not only did they have their biggest road victory in 19 years beating a top 5 opponent, they also did it on National Television for everyone to see! Andy Hamilton does a magnificent job of giving you a feel for the passion in that game in his article in the Press Citizen. For photos and video hawkeyesports.com is the place to visit.
 
I live in a house where statistics are king. My son is a huge sports fan and by default that means I am too! I listen to him spouting information day in and day out and have gained enormous amounts of knowledge on a variety of sports related subjects. (Lucky me.:-)

That's my explanation as to why, as unlikely as it seems for me as a European, I have some insight on your national favorite sport. So what interesting stats do I have for you about the Hawkeyes this weekend? They have won 6 out of the last 7 games against Penn State. The Iowa Hawkeyes have now risen from unranked to spot 13 in the AP and ESPN rankings for college football and Penn State has dropped to #15. Perhaps even more notable, Iowa has won the last 8 games in a row and only Florida can beat that. If you're into college football and don't have Iowa on your radar, now might be a good time to take a second look...Cool, it looks like I've managed to embed a youtube video with no hitches!



Now my intent when I started this post was to write about the Best in the Area list that came out in the Press Citizen this weekend. Clearly current events made it impossible for me to launch into telling you what residents voted to be the best aspects of living in the Greater Iowa City and Coralville area before giving praise to our local heroes. I actually have a seamless transition too as on that very same list Kirk Ferentz, the Iowa Hawkeye Football Coach was voted most influential person in the area... I guess there was no surprise there - My son guessed that in a heartbeat when I asked him if he knew who the most influential person was (!)

So now to the list. It includes 60+ categories ranging from restaurants and food to shopping and services, entertainment venues, kid stuff and activities for seniors. I figure this list has already been eclipsed by the Hawkeyes tremendous performance at the weekend, so I'm going to give it it's own space and list some of my favorites in my next post. For now here's a link to the Best of the Area List  posted in the Press Citizen.

Will Bruce beat out the competition this weekend at the box office?

It's Friday and if you watch any TV at all you'll know that Bruce Willis is back with a new movie Surrogates and it's out on general release today. The other two big ones out today are another sci-fi movie with Dennis Quaid, Pandorum and a remake of the Oscar winning musical Fame.

I'm a curious soul and before I start to write, whether it's on twitter, Facebook or here on my blog I need to know what I'm writing about, so I googled around a bit to see what the buzz was on these movies. Eric Davis at Fandango.com peaked my interest with his post giving his opinion on the movies and who he thinks will come out on top this weekend. His money is on Fame. He figures sci-fi followers will be split between the other two movies.

Now I'm a Brit and if you know anything about Brits you'll know we like to bet on quirky stuff. In fact, the quirkier the better! This would explain why I feel compelled to continue the conversation here and add my 2¢ worth. So here's my take. I think Bruce Willis will beat out the competition this weekend. Of course, I'm biased, I am a huge Bruce Willis fan... I know lots of girls will talk their boyfriends into going to the Fame movie, but I don't think it will be enough. In my book Bruce still has masses of pulling power. What do you think??

I'll be making this a regular feature and will be back next week to eat my words or claim my prowess on knowing the movie going public. (!) Music and Movies are two passions of mine, so there'll be more posts on both subjects in the future.

Now if you're in the Iowa City area here are the links to the schedules at the Sycamore Mall Movie Theatre and Coral Ridge Mall Movie Theatre.

The Secret to a Better Lawn...And how to achieve it with minimum time and effort!

Many of us are not crazy about yard work, but love a nice yard. My pet project for this year has been to see how I can go about getting to the nice yard without putting any particular effort into it...And the good news is that it's turning out to be a lot easier than thought!

A nice lawn of course is the center piece of any yard and usually the biggest headache for most home owners.

So what's the secret to a better lawn? As usual for these kinds of secrets it's not really a secret at all. All you need to do is make sure your grass has good strong roots. If there's a secret, then it's to work on it NOW and not in the spring. If you feed the roots so they become strong over the winter months the grass will be able to take care of itself when the spring rolls around and those pesky weeds start trying to run the show.

Fact is, particularly when it comes to lawn care anything you do now will benefit your yard much more than all the work you do catching up with yourself in the springtime.

I moved into my new home in the summer and have my work cut out for me with bringing my lawn up to par with the neighbors! I did some serious research online and it seems the best lawns can be had with minimum effort. An older post from Paul Wheaton, Organic Lawn Care for the Cheap and Lazy is hugely entertaining, while being extremely helpful. The link to Cornell University Gardening Resources is equally helpful with step by step guides on common lawn and yard care issues. 

I started by mowing high all summer with my new electric mulching mower. (Mowing high meant I only needed to mow every 2 - 3 weeks). Mulching works great and leaving the clippings on the lawn works better than I expected. According to the experts earthworms work the clippings back into the ground providing nutrition for the lawn.  It's worked out pretty well, although my neighbor's not exactly getting nervous about the competition yet!

I didn't fertilize in the summer, because I'm really not that keen on mowing, (who is?) Apparently what happens when you fertilize in the warmer months is that it promotes top growth, but does nothing for the roots. (Hence the more mowing comment). Looking at it that way I'm sure you'll agree that fertilizing in the summer doesn't make sense. We all know that a house is only as good as it's foundation - The same goes for a lawn. What we want is strong roots and the best way to get them is to fertilize in the fall, (or autumn if you come from my part of the world).

All sounds too easy right? That's what I thought too, but when you think about it, it all makes perfect sense. Stronger roots are bound to prevail over the competition. Mowing high also has a side benefit besides the less mowing aspect. Accepting that the sun is food, the longer grass will shade any weed seedlings that may try to make headway on your lawn. Without the sun they won't live long!

This is a work in progress for me. I will keep you posted on my results and any issues I encounter on the way to the lawn that I'm expecting to be the envy of the neighborhood next year...(Aah, wouldn't that be nice?)

Photo courtesy of USDA Natural Resources Conservation Service

First Time Home Buyer Tax Credit...Sitting on the Fence May Cost You $8000 or even more!

There's a lot of speculation going on at the moment on whether the first time home buyer tax credit will be extended past the deadline of November 30 and even increased to $15,000.

How likely is it that one of the the six bills before Congress right now will pass? Apparently the White House is not supporting the extension, although that doesn't necessarily mean they're against it, they'll just let it play out in Congress. Also, fiscal conservatives are worried about the billions it would cost. I don't know about you, but I don't consider myself a fiscal conservative and I'm concerned about how much it will cost!

What do you think? How likely is it that the country will go along with the idea that more government spending is what we need? Especially in light of the big ticket items like health care on the table right now.

I don't know, but it seems a bit risky to me to sit on the fence and wait and see what happens here. Right now as a first time home buyer you have $8000 Free Money right there for the taking. And remember, it's really worth a lot more if you consider how much you would need to earn to actually get to a net of $8000.

Let's not forget the low interest rates either. Right now they're at or around 5.00% for a 30 year fixed loan. You're not going to do much better than that even if you do wait! (My son locked in at 4.75% back in May, but he was quick and that lasted for just a couple of hours and it was back up near 5.00% by the end of the day).

Together they pack a winning punch: Low home prices, low interest rates plus the $8000 tax credit. Right now you're 3 for 3. You wait and any one of these 3 motivating factors could change...Sitting on the fence may cost you money - Why risk that?

The most recent article I could find on the impact of the $8000 credit and where we go from here is in this article at CNN Money.com

Another Great read is a post from the Housing Guru, John Mulkey and his predictions for the housing market in 2010

Buying a Home in Iowa City: Step 7: You're Closing on Your New Home!

This is the last part in a 7 part series that gives a detailed look at how the home buying
process works when you buy a home in the Iowa City area. I've included links to the other parts at the end of this post.

You're almost there...Closing day is just around the corner... Ideally, 48 hours before you close we will get a HUD Statement, (settlement statement) from your lender showing exactly how the proceeds of the sale will be distributed. It will show the closing costs and they should correspond pretty closely with the costs shown on your GFE, (Good Faith Estimate), that you received when you first spoke to the lender. It will also show you how much the check will need to be for that you need to bring to closing. (It may need to be in the form of a Cashier's Check, the lender will let you know if that's the case).

I say ideally, because we don't live in a perfect world and lenders get busy and often don't provide the HUD Statement until much later. I work with a lot of first time buyers, so I usually put in some extra effort to get the HUD in my hands as soon as possible. My clients are usually anxious before closing and it's one less thing for them to worry about if they know what's on the HUD before the day of closing.

The very last thing you do before closing is the final walk through of the home. Sometimes this happens directly before closing. More often, (at least with me), it happens the day before. I really am not a fan of surprises on the day of closing, so going through the home the day before makes more sense. That way if there are any minor problems to be taken care of the seller can still get it done before closing.

Okay, so the big day has arrived and you're ready to close on your new home. All you need to do is show up at the closing location, which may be the Attorney's office or the Lenders office with check in hand. This is when you get to sign the HUD Statement, the Home Loan Documents and the Mortgage Agreement. Not to mention a bunch of disclosure statements and other papers required by the lender. You get quite a work out - there's a lot of paperwork to be signed!

Contrary to common usage of the word, the mortgage is not the actual debt. It's the the security the bank uses for that debt. This is probably over-simplifying it a bit, but if you kind of think of the house as collateral for the debt, that's what the mortgage is. It's worth knowing that even if your spouse is not on the loan he or she will still need to sign the mortgage. Just thought I'd throw that out there, because I know it confuses some people. Particularly that last scenario when a spouse needs to sign, even when they're not on the loan.

Anyway, getting back to the all important day of closing. Once your done signing documents the seller will sign the deed transferring property and a few other documents. (It's not unusual for these to be signed before closing and brought to closing by the sellers agent).

The entire process takes about 45 minutes and when we're done you get the keys and the garage door opener and you're on your way!

That's it. That completes my series on what it takes to buy a home in the Iowa City area...

If you're a first time home buyer, just a reminder that time's a tickin' when it comes to the  first time home buyer tax credit. It's due to expire on November 30. It may be extended, it may not - I don't know and I'm not going to add to the speculation. I can tell you what I do know - Home prices in the Fall are usually lower than in the Spring. Interest rates are at or around a very low 5.00% right now. Those two together are already reason enough to buy a home now. And then there's the $8000 dollar tax credit - It looks like a winning situation all round, don't you think?

Not quite there yet? Give me a call, or drop me an email. I'd love to help you figure out the best plan of action for you.

Buying a Home in Iowa City: Links to the other six steps:

Step 1: getting pre-approved for a home loan
Step 2: choosing the right area to live
Step 3: Finding the Right Home
Step 4: Making an Offer
Step 5: Home Inspections and Repairs
Step 6: Preparing to Close on Your New Home

Buying a Home in Iowa City: Step 6: Preparing to Close on your home

This is part 6 in a 7 part series that gives a detailed look at how the home buying process works when you buy a home in the Iowa City area. I've included links to the other parts at the end of this post.

What happens in this phase is that things slow down dramatically. After the whirlwind of finding the right home, making an offer and getting past the inspection process, you finally have time to wind down a bit.

This is the time when the Bank and Title Company are called into action to take care of title work and financing. It's my job is to watch the time line and make sure all the players in the transaction are moving in the right direction. If someone drops the ball it's up to me to give them a nudge and get them back with the program and on the way to a timely close.

While this is happening there are just a couple of things for you to take care of. The first is to talk to your lender to ensure they have everything they need to process the loan. One thing they will want for sure is that you arrange for home owners insurance. This is really important - You won't get a home loan without having your home insurance in place for the day of closing. Just a heads up that it's worth comparison shopping home insurance. The price variances with different insurance companies is quite amazing!

Scheduling the utilities to start in your new home is pretty much the last thing you need to do before closing. This can be done about a week before the date you're scheduled to close. Here in Iowa City it is typical to take possession on the same day you sign the loan documents, so the utilities should be switched to your name for that date too.

If you're like me and absolutely cannot move without having internet access, then you may need to call the cable or telephone company sooner at busy times of the year to ensure they can fulfill your request.

That just about covers what we need to be doing as we prepare to close on your new home. There are still the obvious things like scheduling a moving truck and changing your address at the post office, but other than that you're almost done...All you need to do now is sit and wait for the closing date to roll around...We still need to do the final walkthrough and talk about the HUD Statement - I'm saving them for part 7 - Closing on Your Home.

If you're a first time home buyer, just a reminder that it's mid-September and you have 73 days and counting until the first time home buyer tax credit expires. It may be extended, it may not - I don't know and I'm not going to add to the speculation. I can tell you what I do know - Home prices in the Fall are usually lower than in the Spring. Interest rates are at or around a very low 5.00% right now. Those two together are already reason enough to buy a home now. And then there's the $8000 dollar tax credit - It looks like a winning situation all round, don't you think?

Not quite there yet? Give me a call, or drop me an email. I'd love to help you figure out the best plan of action for you.

Buying a home in Iowa City: Links to the previous 5 Steps:

Step 1: getting pre-approved for a home loan
Step 2: choosing the right area to live
Step 3: Finding the Right Home
Step 4: Making an Offer
Step 5: Home Inspections and Repairs

Coralville Real Estate - A Great Place to Live and Everything You Need Right there On Your Doorstep!

Coralville and Iowa City are more than just neighbors - they flow seamlessly into one another. You can be driving south on First Avenue in Coralville one second, then you cross an intersection and the name changes to Mormon Trek Blvd and there you are in Iowa City. Or you can be driving east on 2nd Street, (The Coralville Strip) and when you've passed the Vine Restaurant you know you've hit Iowa City.

By virtue of its location it's hard not to talk about Coralville and Iowa City in one breath. Be that as it may, this is where I live and today is the day I decided to give Coralville a little extra airtime and share some of its finer points.

Of course, the first thing I am going to talk about is the great location... It just can't be ignored...Wherever you need to be, you have a straight shot to get there. When I moved here 10 years ago we needed to be between Cedar Rapids and Iowa City. It was the perfect place to build a home with I-80 and I-380 just minutes away. 

That was stating the obvious, now to the less obvious. Coralville has everything you need right on the doorstep. There are 3 public elementary schools and 1 junior high school in Coralville. They are part of the Iowa City School District with the same curriculum.

There's also an excellent transit system to and from Iowa City.

Coral Ridge Mall is there for a great shopping experience or a trip to the movies. Oh, they even have an ice hockey rink...and the Children's Museum...

I'm not close to being finished yet...There's a great choice of grocery stores, including a Super Walmart, Hyvee and the New Pioneer Co-op. With a hugely diverse community there are also many smaller grocery stores with more specialized products.

Apart from an abundance of places to spend your hard earned cash, there are also amazing recreational facilities in Coralville.  Coralville is considered a "green" town, but I'll go more into that in a future post.

For now I'll just mention the parks - North Ridge Park and Morrison Park - And biking trails. A beautiful Aquatic and Recreation Center and a sensational new Library. I'm not kidding about the Library either. It's really something else! Last year during the flood of 2008 I don't know what we would have done if Coralville Library had not stepped up to the plate.  Most of us were without Internet for a while. The library wasn't though and along with the new computers they had they also set up an area with computers from the old library. It was really an exceptional time in the area and they did a great job of dealing with it with exceptional measures.

Well, what do you know, I was shooting for a shorter post today. You can see how well that worked out! It seems that even I underestimated just how much there is to write about! Coralville kind of gets lost between the mighty Iowa City and the ever-growing North Liberty...Don't let that distract you though. When it comes to deciding where to buy real estate in this little corner of the world we have lots of choices and Coralville is one of them...

Iowa City Real Estate: Do You Buy Now and Take the $8000 First Time Home Buyer Tax Credit Or...Wait?

As the deadline for the first time home buyer tax credit approaches I see more and more written about whether first time home buyers should take advantage of it or not. Apparently in some parts of the country buyers are getting into "panic buying" mode to make sure they get their $8000 credit. They're overpaying for homes just so they can take advantage of the tax credit. Sounds crazy, right? All I can say is if you're living in a part of the country where that's the case, then you really want to look at the big picture. Depending on your market, paying more for a home may be okay, but you really need to be sure that your market is improving and that your investment is a sound one. You don't want to turn round in a year and find your home has depreciated in value. The $8000 tax credit will be poor consolation to you if that happens.

That's my 2¢ worth for you if you live in a market other than Iowa City...This post on the other hand is for first time home buyers still on the fence about buying a home in my area - the Iowa City, Coralville and North Liberty area. I want to make sure you know what THIS market is doing and let that be the basis for your decision whether or not to buy now or wait until after November 30 to buy your home.

First of all, it's worth mentioning that here in the Iowa City area home sales and prices have stayed relatively stable during the downturn in the housing market. Sure the Iowa City real estate market is flat and sellers certainly aren't making much, (if anything) when their selling their homes. On the other hand, home prices have certainly NOT declined 20%-30% as they have in other parts of the country. Neither do we have a large amount of foreclosure homes on the market.

Buying Iowa City real estate is still a good investment. That's probably the most important thing you need to know as you contemplate whether or not to buy now and take advantage of the $8000 tax credit.

The next question is, will prices fall in the winter canceling out the value of the $8000 tax credit? I don't have a crystal ball, but I'd say that's doubtful. After checking the Iowa City MLS for the period Oct 1, 2008 through Jan 31, 2009 I can tell you that home prices in Iowa City rose by 1% in comparison to the same period in 2007-2008. And right now they're down 2% for the year. Like I said though, I don't have a crystal ball and refuse to speculate on what will happen when the first time home buyer tax credit disappears. I prefer to work with data. I believe past performance is a good indicator for future results. I also think in general the economy is improving. That's my personal opinion though, not a fact. You might think differently about the economy and that may lead you to draw a different conclusion.

Okay, so that's my take on what's going on in the Iowa City real estate market right now. So should you take advantage of the $8000 first time home buyer tax credit?

Advantages of buying a home now? Low interest rates, low home prices AND $8000 free money. (And if you think about it, the $8000 is worth a whole lot more when you consider how much you actually need to earn to end up with a net of $8000).

What would be the advantage of waiting? Oh I don't know, maybe the idea that the tax credit may be increased to $15,000 after November 30 when the current one expires. Personally I'm a bird in the hand kind of gal myself. Not big on speculating either. You may disagree - In that case you wait. It's not my job to change your mind, It's my job to give you the information you need to make informed decisions.