Revised FHA Appraisal Guidelines in Effect for Appraisals Done After April 1, 2009

The federal guidelines that outline 10 things that appraisers must do or provide for all FHA appraisals done after April 1, 2009 are as follows:

1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71).
2. At least 2 comparable sales within 90 days of appraisal date.
3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables.
4. Bracketed listings using both dwelling size and sales price when possible.
5. Adjust active listings to reflect the List To Sales Price Ratio.
6. Adjust pending sales to reflect contract sales price when possible.
7. Include original list price and any revised list prices.
8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales.
9. Absorption Rate Analysis.
10. Known or reported sales concessions on active and pending sales.

Don't feel bad if you do not understand the above criteria. Your lender and your Realtor should if they know what they are doing, and can help explain it...

FHA is becoming more strict on the actual value of the home that one may buy and fund through them. In today's market, FHA loans are competitive to conventional loans and do not require the minimum of 10% that a conventional loan requires.

Bryce Canyon - Winter Beauty

Took a couple days off and headed down to Bryce Canyon, just my wife and I. It is the first time we have witnessed the winter beauty of Bryce. Hope you like the pictures. Just one of the beauties of nature found in Utah!

Utah Home Run Housing Grant of $6,000!

If you have been waiting to buy a brand new home, wait no more! Utah has a grant program available for any qualified buyer interested in purchasing a newly constructed home.
Basics of the Program:
$6000 Grant – No Repayment Required! Use towards down payment, closing costs or rate buy-down
New Construction Only – Newly Built, Never-Occupied Properties
Owner-Occupied Properties – For primary residences only
Any Qualified Buyer – This program applies to all qualified buyers - Not just first time buyers
First Come, First Served – State Fund limited to approximately 1600 total grants
Loan Approval Required – To request the grant, loan must be fully approved by the underwriter. Axiom can streamline this approval process with our in-house banking team.
Income Limits – Limits for this program are defined to mean $75,000 for a single person or $150,000 for a married couple
Property Location – All Counties in State of Utah are Eligible
$8,000 First Time Homebuyer Credit – May Be Used in Conjunction with this Program (a Total Benefit of $14,000!)

This is a unique opportunity for buyers to get into a brand new home – but don’t wait. The funding is limited and available on a first come, first served basis. For more information on this exciting Utah grant program, contact Kraig or a qualified loan officer.

$8,000 First-time Home Buyer Tax Credit

The American Recovery and Reinvestment Act of 2008 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence or after January 1, 2009 and before December 1, 2009.

The following questions and answers provide basic information about the tax credit. If you have more specific questions, consult a qualified tax advisor or legal professional.

1. WHO IS ELIGIBLE TO CLAIM THE TAX CREDIT?
First-time home buyers purchasing any type of home – new or resale – are eligible for the tax credit. The purchase must be between January 1, 2009 and before December 1, 2009. The purchase date is considered the date when closing occurs and property title transfers.
2. WHAT IS THE DEFINITION OF A FIRST-TIME HOME BUYER?
A buyer who has not owned a principal residence during the 3 year period prior to purchase. With married couples, both party’s history is considered. For example, if you have not owned a home in the past 3 years, but your spouse has owned a principal residence, neither you nor your spouse qualifies for the tax credit. A parent may jointly purchase a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
3. HOW IS THE AMOUNT TAX CREDIT DETERMINED?
The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.
4. ARE THERE ANY INCOME LIMITS FOR CLAIMING THE TAX CREDIT?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married), and is reduced proportionally for taxpayers with MAGIs between these amounts.
5. WHAT IS “MODIFIED ADJUSTED GROSS INCOME”?
The MAGI is defined by the IRS. First, determine your “adjusted gross income”, then add to the AGI certain amounts such as foreign income, foreign housing deductions, student loan deductions, IRA contributions and higher education cost deductions.
6. WHAT TYPE OF HOME QUALIFIES?
Single-family detached homes, townhomes, condos, manufactured homes, and houseboats. A contractor built home also qualifies.
7. WHAT DOES IT MEAN WHEN THEY SAY THAT THE TAX CREDIT IS “REFUNDABLE”?
The home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. For example, if a home buyer expected a federal income tax liability of $5,000 and had tax withholdings throughout the year of $4,000, then without the tax credit, the buyer would owe an additional $1,000 come tax time. If the buyer qualified for the $8,000 tax credit he would receive a check for $7,000 when filing.
8. I BOUGHT IN 2008. DO I QUALIFY FOR THIS CREDIT?
No. But you may qualify for the $7,500 2008 credit.
9. DO I HAVE TO WAIT FOR MY 2009 TAX RETURN?
Not necessarily. If you qualify, you may increase your tax withholding (W4) in order to increase your take-home pay. This money can then be applied to the down payment.
10. IF QUALIFIED FOR CREDIT, CAN I BUY IN 2009 AND APPLY THE TAX CREDIT TO MY 2008 RETURN?
Yes. If you have already submitted your tax return, you may file an amended 2008 return claiming the tax credit. Consult your tax professional…

info provided by NAHB (National Association of Home Builders)

Can't Wait for Summer Fishing!

Sitting here with a cold, working, and dreaming about the next time I can be out on my little fishing kayak on Henrys Lake, going for natives like these small ones!

Buying a Home? Read This First!

As previously stated, an average 32% of all homes on the market (Utah County and Draper areas) are being sold with "third party approval", meaning bank involvement or bank owned. I evaluated all homes for sale in increments of $200K - $300K, $300K - $400K, ... through $1M and above. This was also done for the cities of Alpine, American Fork, Cedar Hills, Draper, Highland, Lehi, Pleasant Grove, and Saratoga Springs.
Sample of typical findings:
Highland - Total homes on market between $200K and $5 M is 180 with 64 (36%) of them being Short Sales. These short sales are selling between $76 and $85 per sq. ft. on average.
Example: Homes for sale between a $400K and $500K sales price: There are 37 for sale with 15 of them being Short Sales... (26%).
Draper - Total homes on market between $200K and $15M is 485 with 163 (34%) of them being Short Sales. These short sales are selling between $84 and $96 per sq. ft. on average.
Example: Homes for sale between a $400K and $500K sales price: There are 93 for sale with 35 of them being Short Sales...(38%).


Buying? Call me first and I can supply you the expected price based upon the city.

Shocking News About Short Sales - DO YOU HAVE EQUITY?

I have always prided myself in being one of the best when it comes to knowing my market, the competition, and being able to predict the what the market (sales) will do over the next 6 to 12 months at any time. Times have changed!

2008-
The year we needed to get rid of the "spec" home inventory in order to have home prices stabilize.

2009 -
The year we need to get rid of foreclosures and short sales in order to have home prices stabilize! The short sale market is killing new construction & existing home prices. The cause of it is the terrible loans that were issued between the summer of 2005 and the summer of 2007. Those ARMs are coming due, forcing people to refinance or sell when they can do neither due to the new laws in place. Additionally, layoffs are not helping.

32% !
I just finished evaluating the number of homes presently on the market verses the number of those homes on the market that are either bank owned, short sales, or pre-foreclosures. I found that the average percentage of homes presently on the market that are short sales 0r bank owned is 32%. Basically, 1 in 3 homes that a buyer has to choose from is a distressed property.

$70 TO $80 per Sq. Ft. = Sales Price!
That's the average sales price of the short sales. If a home is 4,000 sq. ft., one can expect the sales price to be between $280,000 and $320,000. Normally, anything under $100 per sq. ft. is a good price!

Home Values - Some Thoughts on Dollars Per Square Foot

Consider evaluating the "dollars per square foot" as far as the cost of buying a home. To do this, simply divide the sales price by the number of square feet of the home.

You will find that I have done it for some locations, but have also looked at it differently than you may. I look at what the cost is based upon the total square feet of the home, and the total FINISHED (livable space) square feet of the home. If the basement is not finished, but is counted in the total square footage, you will need to figure that it will cost anywhere between $15 and $27 a sq. ft. to finish the basement area.

Example: A home in Cedar Hills has a total of 3,260 sq. ft. but only has 2,700 of it finished. The home is on the market for $345,000. Is it worth it? If you calculate the $/sq. ft of this home you get $106 / total sq. ft, and $128 / finished sq. footage. Based upon the numbers below, I would have to say that the home is priced too high. Of course, factors like the yard, the home condition etc. are not really broken out for this evaluation. I would be offering around $326,000 for it without seeing it...

Homes Sold in the Last 90 Days:

DRAPER, UT.

$400,000 and $500,000 price range:

• Price for total square footage of home: $104.30 / sq. ft


• Price for the total finished square footage of home: $117.20 / sq. ft.

ALPINE, UT.

$300,000 to $400,000 range:

• $94 / total sq. ft


• $188 / finished sq. ft.

$400,000 to $500,000 range:

• none sold

$500,000 to $900,000 range:

• $119 / total sq. ft.


• $134 / finished sq. ft.

HIGHLAND, UT.

$300,000 to $400,000 range:

• $96 / total sq. ft.


• $149 / finished sq. ft.

$400,000 to $500,000 range:

• $94 / total sq. ft.


• $127 / finished sq. ft.

$500,000 to $900,000 range:

• $121 / total sq. ft.


• $166 / finished sq. ft.

CEDAR HILLS, UT

$300,000 to $400,000 range:

• $88 / total sq. ft.


• $119 / finished sq. ft.

$400,000 to $500,000 range:

• $92 / total sq. ft.


• 100 / finished sq. ft.

$500,000 to $900,000 range:

• no sales

PLEASANT GROVE, UT

$300,000 to $400,000 range:

• $99 / total sq. ft.


• $131 / finished sq. ft.

$400,000 to $500,000 range:

• $92 / total sq. ft.


• $132 / finished sq. ft.

$500,000 to $900,000 range:

• $90 / total sq. ft.


• $134 / finished sq. ft.

I am watching the numbers for several areas and will be posting updates in the near future. IF YOU HAVE SOME AREA YOU WOULD LIKE EVALUATED, LET ME KNOW.