Chicagoland real estate purchases, real estate sales, short sales, foreclosures, first-time buyer representation, Illinois condominium association representation, estate planning for everyone, powers of attorney, quit claim deeds and more...

It appears that the first time homebuyers credit is close to renewal, but the question is, what will the terms be?

Under a new Senate proposal, the $8,000 credit for first time buyers will be extended to cover purchases into the spring of 2010, but buyers must sign contracts by April 30 and close within 60 days. The plan would also extend the program by incenting current home owners to buy a new home. They would receive up to $6,500 for purchase of a new home if they have lived in their current home for five consecutive years out of the last eight. It would also raise the income level for qualification from $75,000 for singles, to $125,000 and from $150,000 for couples to $225,000.

Keep in mind this credit applies only to principal residences, not to second or vacation homes.

For more information, see the Wall Street Journal article by clicking here.

Many homeowners are going to get quite a shock when they open up the upcoming tax bill for their properties in the next couple of weeks.

Median increases in many city neighborhoods will also hit double digits, with some lower income areas seeing the highest percentage spike. The median rise in the West Garfield Park neighborhood will top 46 percent, according to figures provided to the Tribune by Cook County Assessor James Houlihan.

In all, four out of five homeowners in the city and northern suburbs will get higher bills than last year, In the south suburbs, 64 percent of homeowners will see bigger bills, yet the median tax bills in several south Cook communities will actually decline year over year.

In Chicago, the median hike in residential bills will be about 3 percent, although the median increase in many neighborhoods will shoot significantly higher than that, a Houlihan spokesman explained.

The developer of Michigan Avenue Tower II announced yesterday that it will auction off 40 of the remaining 97 units in the 257-unit building located at 1400 S. Michigan Avenue on November 15.

This announcement makes the building the second high-rise South Loop condo building to go to auction this year. Earlier this month, Sheldon, Good & Co. announced plans to auction 20 units on the same day for Motor Row Lofts, a 52-unit loft redevelopment at 2303 S. Michigan.

Earlier this year, an auction of 40 units at the Vetro, Roszak/ADC's building attracted 450 registered attendees and resulted in the sale of 44 units at reduced prices on average of 27 percent. After the auction, Vetro dropped the price of the remaining 51 units and less than 10 now remain unsold. 

Other buildings are following suit and dropping their prices, too.

Minimum bids on the tower's units will start at $99,000 for one studio that was recently listed at $135,000 to $375,000 for a three-bedroom unit that was last listed for $682,000. The building is also seeking to become FHA-approved as well.

These auctions are definitely a double-edged sword for existing homeowners. On one hand, it causes unsold units to be sold, but on the other hand, they are often at heavily discounted prices. The building's marketing agent, Keith Giles, of Weichert Realtors-Frankel & Giles, says "It's going to take a year or two or three for the market to stabilize and this is just part of the process..."

Information taken from Chicago Tribune article "More Condos on the Block in the South Loop" dated October 21, 2009.

According to the Wall Street Journal, the IRS is currently investigating more than 100,000 suspicious claims for the first-time homebuyer credit. This is not good news for those who hope that the credit will be expanded past the current November 30th expiration.

More than a million claims for the credit have been received so far, and housing industry experts have estimated that it has generated more than 350,000 home sales that wouldn't have otherwise occurred. But there is revealing evidence that shows that a large number of these claims are unjustified, or even fraudulent.

The IRS has stated that it is investigating 167 "criminal schemes" involving the credit, and that the IRS will "vigorously pursue those who filed fraudulent claims" for the credit.

The credit has some fraud issues largely because it is a credit that is not claimed at the time of sale, rather people have to file or amend their tax returns in order to obtain the credit.

Still, industry groups are pushing to keep the credit in place. The National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association have all called for a 12-month extension of the credit. They have also asked that it be extended to all home buyers, not just first-time home buyers.

One proposal by Sen. Johnny Isakson (R.-Ga.) and others to extend the credit would make it available to all home buyer through June 2010 and would carry a price tag of about $16.7 billion dollars. That proposal would also raise the income ceiling to eligible home buyers who are single with an income up to $150,000 and for couples up to $300,000. Currently the credit is only available to singles up to $75,000 and couples up to $150,000.

For the whole article, click here.

The debate continues over whether the first time homebuyers' credit should be extended, expanded or both, according to the Wall Street Journal.

Lawmakers are voicing various concerns over what the credit is eventually going to cost taxpayers.

Leading proponents of the credit would like to extend it at least to next summer, and make it available to all home buyers. They also want to raise the income limits to $150,000 for an individual or $300,000 for a couple. That would cost about $16.7 billion. Currently, the credit phases out for individuals earning more than $75,000 and married couples earning more than $150,000. To keep the credit alive, some lawmakers are considering ways to offset its cost, for instance, by taking back unspent funds from the $787 billion stimulus bill.

Many lawmakers want to see some sort of proof that the credit is also stimulating the job market as well.

Ted Gayer, a scholar at the liberal Brookings Institution, argued in a recent paper that the credit costs the government about $43,000 for each additional home sale it produces. That is because most of the two million or so home buyers expected to claim the credit would have bought a house anyway. Only about 350,000 were additional buyers. Expanding the credit to make all home buyers potentially eligible would swell the government's cost per additional home sale to more than $250,000, said Mr. Gayer, co-director of economic studies at Brookings.

For the whole story, click here.

Mayor Daley has declared that he will not raise property taxes to help with the budget deficit.

"You can't [raise property taxes] ... That would hurt people tremendously," Daley said.

"You can only take so much. People are being laid off on a daily basis. People are getting cut back. They don't have the money anymore. Government has to look at itself and find out what they can live with and what are their priorities. Simple as that."

Other sources predicted that Daley would steer clear of any major tax increases in 2010 -- by cutting the budget and siphoning reserve funds created with proceeds from the 75-year, $1.15 billion parking meter lease and the 99-year, $1.83 billion deal that turned the Chicago Skyway over to a private operator.

For more on this story, click here.

Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."

Courtesy of BusinessWeek 10/09/09

I very rarely blog about non-real estate related issues but I thought this information is something everyone should have.

The State of Illinois began offering a new service connected to your driver's license. You can click here to add two emergency contacts to your license data. Then, if you are incapacitated in some way, your license can be scanned and the emergency contacts retrieved so your loved ones can be contacted. It only takes two minutes to complete! 

The site will then allow you to link over to LifeGoesOn.com to register to be an organ donor in case something would ever happen...help save more lives!