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The New Extended Home Buyers Tax Credit.

by Rob Zwemmer

The New Extended Home buyers Tax Credit.

We are already at years end, and what a year 2009 was.  The beginning of the year we got off to a slow start because of lack of inventory and uncertainty under homebuyers. When the summer came around not only the temperatures starting to heat up but also the Home sales here in the desert.

More foreclosures, low interest rates, first time home buyers and a strong Canadian dollar where the causes for the high number of sales we have accomplished in the second half of this year.

In the last 6 months we have seen more buyers coming off the fence and taking advantage unbelievable opportunities here in the Palm Springs Area.

What will we see for 2010?

Interest rates will stay the same, the first time home buyer credit has been extended to mid next year, and a new wave of foreclosures will hit the market in the second and third week of January. We continue to get positive news on home sales. Real Trends reports that markets roared in October with the best year over year showings in all 4 years. The report shows that all regions were up in unit sales. Price declines are measurably less than they were than in the first 9 months of the year with every region showing improvement.

Much of this good news is the result of near record low interest rates and the federal and state first time homebuyer tax credit ...they are doing a great  job of assisting the housing economy.

The extension of the credit through next spring should have a positive impact on housing sales through the 4th quarterof 2009 and the first quarter of 2010. And...the tax credit extension to move up buyers should provide additional stimulus to keep the housing market on the road to improving results.

What this means to buyers is that it is a sweet time to buy and for sellers, this is the critical point to make sure your properties show their best. Ladies Home Journal magazine just published a great article advising sellers to Donate instead of dumping their home goods to local charities.  Streamlining the look of the property will help buyers, will help keep the economy green --and assist others in the process.

Let's talk about the new Extended Home buyers Tax Credit.  It's NOT just for first time buyers

This program will touch a lot of people - it is very exciting!

Congress has extended the tax credit program to include current homeowners and repeat buyers, so expect to see some terrific opportunities in the months ahead. As you know, tax credits are a dollar-for-dollar reduction in your tax bill, so it's like getting free money from the US Government

Here are the  program details.

Between now and April 2010, first time buyers are eligible for a tax credit of 10 percent of a home's purchase price, up to a maximum of $8,000. And as I mentioned earlier, current homeowners are also eligible for a tax credit when they sell and purchase another home. The homeowner tax credit tops out at $6,500. I know a lot of people will take advantage of this program.

What's the catch?

Well, there are a few conditions that buyers need to know about, including a couple of income restrictions:

The full tax credit is available to buyers earning up to $125,000 a year, or $225,000 for married couples filing jointly.  If you make more than that, you may still qualify for some relief.

A partial tax credit is available to buyers earning between $125,000 and $145,000, or for married couples earning between $225,000 and $245,000. These increased limits allow more middle-income buyers to participate.

There are also a couple of limitations on the homes being bought and sold.  First, the tax credit is only awarded on homes purchased for $800,000 or less.  And second, homeowners who plan to take the $6,500 tax credit need to have lived in their current home for 5 of the past 8 years.  This is a limited program that runs through the end of April 2010, which is only a few months out.

Fortunately there is a grace period -- Under the rules, as long as a written binding purchase contract is in effect on April 30, 2010, the buyer has until July 1, 2010 to close.  So buyers and sellers need to get moving if they're going to take advantage. 

Folks need to strike while the iron is hot! sellers - you have the best opportunity in years to attract motivated buyers! Price your home according to its CURRENT market value, not above it.  And make sure your property shows extremely well, especially during the holidays and winter months. 

To everyone who reads this:
May your holidays be filled with Family, Health, Love, Joy, and Football .

For those Men and Woman who are overseas and are not able to be with their families during this season.
Thank You for allowing me to do the things that I love so much.   Come home soon and be safe.


Rob Zwemmer


A Merry Christmas!

by Rob Zwemmer


by Rob Zwemmer


"Too many of us are hung up on what we don't have, can't have, or won't ever have. We spend too much energy being down, when we could use that same energy - if not less of it - doing, or at least trying to do, some of the things we really want to do."
- Terry McMillan (Cited in The Best of BITS & PIECES)


Here we are in the midst of the holiday rush - buying gifts, attending parties, decorating, sending cards, and preparing for the feast of the season. We're doing all this for whom?

We tell ourselves it's for the ones we love. We want to make them happy, fill them with joy, and make their world bright. We want to make everything perfect for them at this special time of year.

In a way, that's like preparing the holiday feast for those who matter most to us, then eating it for them and commenting on how tasty it was. Truth is - we can't "make them" do anything, we can only spread the table before them.

Whether they choose to consume the feast, or be happy doing it, is their choice - not ours. We can give the presents, offer our own good holiday spirit, or bake the cookies, but we cannot "make" anything happen.

Epictetus once said, "Happiness and freedom begin with a clear understanding of one principle: Some things are within our control, and some things are not. If you think that you have free rein over things that are naturally beyond your control, or if you attempt to adopt the affairs of others as your own, your pursuits will be thwarted and you will become a frustrated, anxious, and fault-finding person."

Why not take a little of the pressure off yourself this holiday season? Feel free to give whatever gifts, energy, creativity, or love you have to offer, but let go of the desire to control the outcome. The gifts that will make the most difference are those that arise from the heart with no expectation of reward. My wish for you is the joy and freedom that results from giving. Happy holidays and best wishes to you and yours!

If You Don't Buy a House Now, You're Stupid or Broke

by Rob Zwemmer

Have you read this article yet? It was featured in Business Week. 

My first thought, wow! what a blunt and harsh statement! But the writer,
Mark Roth, uses this headturning title to get your attention to make excellent points for those who are on the fence.

Namely that interest rates are at an all time low, in fact, the lowest in 40 years. He noted that in the late 70s, rates hit a high of 18%! Can you even imagine buying a house at 18%? 

In the 80s, when rates dropped from 12% to 9%, my parents practically danced their way to the 1st refinance of their home. Generation X'ers probably would never dream of purchasing a home above 7% given all we have ever known
are super low rates hovering between 5-6%.

Mr. Roth points out the history of previous interest rates as well as the impact of rates on one's purchasing power. I happen to agree with his prediction that as the economy becomes more stable, interest rates WILL rise to hedge inflation. 

My prediction has been that by this time next year, rates will have risen 1-2% at a minimum.

Mark Roth summed up the article, "What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime."


If You Don't Buy a House Now, You're Stupid or Broke

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

Well, you may not be stupid or broke. Maybe you already have a house and you don't want to move. Or maybe you're a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let's look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren't happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We've since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let's assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let's put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is "more stable" and it's safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you're borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.


by Rob Zwemmer


"Take your life in your own hands and what happens? A terrible thing: no one to blame."
~ Erica Jong

"The dog ate my homework." Teachers hear that one every week. "Jimmy made me do it!" Parents hear that one often, too. Fast-forward a few years to the college student with bad grades, and you hear, "The professor doesn't like me." Then, before we know it, we're all grown up. Now we hear, "My manager didn't give me enough time to complete the project," and, "She doesn't understand me," or, "The customer wasn't honest with me, so I couldn't close the sale."

Where do these fabrications of blame originate? They probably begin in our childhood imagination - and that's also where they should stop. Blaming comes easy since we tend to do it when the person blamed isn't around. Who's going to dispute our blame claim?

Take a moment to re-read the first part of today's quote: "Take your life in your own hands . . ." What a breath of fresh air emerges from that phrase. By accepting responsibility for our life and all its actions, we no longer need to alienate those around us by blaming. We can live a no-excuses life.

We either accept the low classroom grade without complaint - after all, we earned it - or we change our approach to homework the next time. We simply allot enough time to complete our manager's special project on deadline, or be willing to be employed at a lower level on the food chain. We invest ourselves more deeply in our personal relationships, or accept a less-than-fulfilling bond with those we love.

As quoted before, "All that a man achieves and all that he fails to achieve is the direct result of his own thoughts." If you're tired of perpetually being on the defensive, ban blame from your life - forever. It's a wonderful way to live stress-free!


by Rob Zwemmer
"There's nothing as constant as change."
~ Unknown


Feel on edge? Not sure what to expect next? Nerves frayed? Feeling overwhelmed by today's complex world situation? How is it that some people are calm, fearless, and content, while others are frightful, worried, overwhelmed, and uncertain about the future?

In the 1950's there were only three models of Chevrolet, about four dry cereals, two or three types of soap, etc. Mom went grocery shopping weekly. There were no shopping malls, computers, cell phones, portable CD players (or CD's), 401(k)s, Internet, or co-ed dorms. Life was simple and calm - and revolved around the family. Technology didn't dominate daily life.

Today, our choices have expanded exponentially. There are hundreds of vehicle models, 50 different cereals on the shelf, software for every occasion, hundreds of cable channels, and millions of pages on the World Wide Web. Think that might clog your thinking just a little? Want to get back to simplicity, peace, and security?

Try a few of the following suggestions. Begin limiting your choices. Spend less than you earn. Limit trips to the store. Spend the evening at home - with your family - with the television OFF. Go directly home after work. Identify your principles - and live them. Count your blessings daily by entering them in a journal. Read. Treat yourself to a hot bath.

Think of your life as an extension cord with too many appliances plugged-in. Each vies for the limited energy you have available until a short-circuit or fire occurs. Start unplugging all those peripherals now, and you'll notice your life-light begin to shine.

Displaying blog entries 1-6 of 6