But the credit is scheduled to expire on November 30, 2009.  No one knows at this point that it will be extended, or if a new credit will be offered.

What I DO know is that underwriting loans is tough anyway right now, and sometimes delays pop up.  Closings can be delayed for a day or two quite easily.

If that first time buyer is planning on getting a home this fall and cashing in on an $8000 credit, it is dangerous to consider closing at the end of November.  The closing attorneys will be packed.  Their workload will be intense.   The loan officers will be chasing underwriters and loan packages like crazy.  There will be opportunity for error and delay.  And in addition to all that, the end of November comes on a Monday after Thanksgiving weekend, and all the hubbub of Black Friday shopping.  It is not a calm time of year.

Closing at the end of November is too risky.

Get out.  Get your loan preapproval done.  Shop for a house.  Close early.  Saving a few hundred bucks by closing at the end of the month may be the mistake that costs you $8000.

Why risk it?

1. Select REALTOR®, “Working with Real Estate Agents” “Exclusive Right to Represent Buyer”

2. Preapproval with lender

3. Describe desired property. Review listings and visit selected homes on market.

4. Determine a prospective property to buy.

5. Do homework on specific property details and pricing.

6. Arrive at offer price and desired terms, including proposed closing date.

7. Write up offer, “Offer to Purchase and Contract” with addenda as needed.

8. Deliver Offer with any addenda, NC Residential Property Disclosure Statement, Preapproval Letter, copy of Earnest Money Check to the Listing Agent

9. Negotiate price and terms with Seller

10. When offer is amended and signed by all parties and communicated to both, you are Under Contract. Earnest Money Check is then deposited into trust account of Listing Agent, Buyer’s Agent, or closing attorney.

11. Initiation of transaction proceedings.

i. Contract documents to closing attorney, with any other documentation requested by attorney on a timely basis

ii. Inspections within timetable set forth in contract

iii. Apply for home loan within timetable set forth in contract

iv. Apply for Homeowner’s Property Hazard Insurance

12. Negotiate Repairs, “Repair Request and Agreement”

13. Make arrangements for utilities to be transferred to Buyers.

14. After repair walk-through and/or reinspection of repairs. Confirm repairs.

15. Closing arrangements, Closing meeting and Closing/Deed Recording:

i. A day or two prior to closing meeting, the closing attorney will provide a sample HUD1 Settlement Statement noting closing expenses for both parties. This must be reviewed and approved by the lender.

ii. Settlement statement reviewed by agent and client for accuracy

iii. HUD1 will indicate how much money either party must bring to closing. Earnest Money Deposit is credited to the Buyer’s total expenses. Only one certified check for the total amount due is needed, made payable to closing attorney/law firm.

iv. After closing paperwork is signed, the closing attorney will perform a final title search for liens, record the deed, typically on the same day as the closing meeting. NC law and the Standard NC REALTOR® Contract say that recording of the deed is the technical closing of the transaction. Many Sellers will give keys to Buyers at the attorney’s office, but a Seller may well withhold keys until deed recording is completed. That possibility should be included in Buyers’ plans. That is why a Friday closing is often avoided, since if recording is not accomplished, Buyers may not have possession until Monday.

16. Someone has a new home! Buyer will receive the deed and title insurance policy within a couple of weeks.

Notes:

1. THERE IS NO SUCH THING AS A STUPID QUESTION. There are many details involved in buying and selling and closing real property. Relocatees from out of state may be used to title company closings, “Opening and Closing Escrow,” or other terms that are not applicable to the process in North Carolina. And first time home buyers may feel a great amount of stress and confusion. If you have a question, ASK IT.

2. Buyer always has the right to select service vendors, including home inspector, lender, termite inspector, radon inspector, closing attorney, surveyor, etc. Bank will select an appraiser. Cash buyer may choose to select an independent appraiser. I gladly offer recommendations of service providers with whom I have had very good experiences, but the Client always has the right to make their own choices.

3. Buyer should make a choice of lenders as early as possible. The contract timeline has definite dates for performance of certain tasks. Missing the dates may cause the Buyer to lose the Earnest Money Deposit if the loan cannot be made. Changing lenders in the middle of the transaction may cause problems with the timeline if the lender does not have adequate time to perform.

4. Items in quotes/italics in the Common Steps to Buying a Home in Cary, NC, refer to Standard North Carolina Association of REALTORS® Forms.

 the First Time Home Buyer Tax Credit offers a significant inducement to home purchase.

The National Association Of Homebuilders is obviously pleased with this stimulus and offers a great deal of information about it on their site:

• The tax credit is for first-time home buyers only and does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

This is significant.  There is still 100% funding available in certain circumstances for qualified buyers.  I am seeing people get house keys with only a few hundred dollars out of pocket to close, and they can gleefully anticipate an $8,000 check with their tax return next year.

And we still have affordable $80,000 single family homes in Wake County, NC.  They are not the rule, but they certainly exist.  Getting $8,000 back on an $80,000 home would be maximum “bang for the buck” for that first timer.

The $80,000 home pricepoint is elusive in Cary, Apex, and Morrisville, but in Raleigh there are condominiums, townhomes, some detached homes, and in outlying areas there is more inventory.  Wendell, Knightdale, and Zebulon come to mind in Eastern Wake County.   Most any home in that price range will need some repair and updating, but the affordable price point exists.

Buying a fixer-upper home for your first home?  The tax credit will roll in next spring to help offset the money you had to use to repair and redecorate.

Buyers would be well-advised to consult their tax specialist if they have any question about their personal tax situation and qualification for the credit, but it seems to me that the first time buyer credit is designed for wide distribution to function as an economic stimulus.

We may do things differently in North Carolina real estate practice than you did where you relocated from.

You will sign an agency agreement with your Realtor. And a “Working with Real Estate Agents” disclosure.

You will do a written “Offer to Purchase and Contract,” and with that you will include a check for the earnest money deposit.
You should expect to provide a preapproval letter for the financing you propose to apply for.
There will be a couple additional forms.
Unless it is new construction or a foreclosure, you will sign a North Carolina Residential Property Disclosure Statement.
You may also have a Homeowners’ Association Disclosure form to sign.

There may be additional addenda.
Confirmation of Additional Compensation if the commission to your agent varies from what you agreed to in the Agency agreement.
FHA/VA Financing Addendum, if applicable.
Additional Provisions Addendum, if applicable.
And a long list of other possible addenda exists.

We generally put it in writing, negotiate details verbally, and either print the final agreement, or strike, revise, and initial a couple of terms to record the final agreement. If it is more than a couple of strikes and initials, a new contract with the final agreement terms is a good way to go.

You can try a verbal offer, but the best answer from the Listing agent is, “Why, thank you so much! My folks look forward to receiving your written offer.”
Verbal offers are conversation, and are not binding in any legal sense.
A written offer signed by the other side becomes a binding contract.

It can be really tough to express how difficult the foreclosure home market can be for folks without a lot of homeownership background.