The Kestner Team

As part of the “Housing and Economic Recovery Act of 2008” that was recently signed into law, Congress has created a new, temporary federal income tax credit to provide an incentive for first-time homebuyers.  This tax credit is an interest-free loan that enables consumers to receive a tax credit on a dollar-for-dollar basis on their personal income tax return in the calendar year following the year of closing on their home. They begin paying the tax credit back the year after that and make equal installments during the next 15 years.

Below is a quick reference chart that summarizes this new tax credit.  You can also Click Here for a Frequently Asked Questions Document from the National Association of Realtors regarding this new tax credit.

You can click here for more information about this new tax credit program.

HOUSING AND ECONOMIC RECOVERY ACT OF 2008       First-time Homebuyer Tax Credit

What is a “Short Sale”?

from: CBS News

CBS News’ The Early Show's financial guru, Ray Martin, recently stated: “Foreclosure occurs when borrowers have not made two or more payments and lenders respond by filing a legal notice and commencing a legal proceeding to take possession of the home.

The rate of mortgages in foreclosure would have fallen if not for big jumps in foreclosures in local markets of California, Florida, Nevada and Arizona, where investors who bought on speculation that values would rise are walking away from property that is now worth less than they owe. Also, in regions of Ohio, Michigan and Indiana, areas marked by large job losses in manufacturing are seeing big increases in foreclosures.

According to sources in the mortgage industry, people who agree to a short sale with the lender do far less damage to their credit rating than those who go through foreclosure.

While in both cases, short sale and foreclosure, the delinquent mortgage will negatively affect their credit rating, at least short sellers avoid having a "debt discharged due to foreclosure" on their credit reports. Mortgage and credit experts say that, after bankruptcy, having a foreclosure on your credit report is the worst result and will reduce your credit score by over 250 points. You could also have to wait up to three years to qualify for a mortgage at a reasonable rate.

Short sales show up on a credit report as a "pre-foreclosure in redemption" status and can result in a credit score reduction of 100 points or less. After the sale, the mortgage may show up as "discharged." People who successfully complete a short sale may also qualify for a mortgage at a reasonable interest rate in as little as 18 months. So, if buying a home is a future goal, then a short sale is the better option for many.

Homeowners cannot simply decide that they want to unload a home with a short sale; the lender must agree to it. The key to getting a lender to go along is to demonstrate two things: that you have no other financial resources to pay the mortgage, and that the sale price the buyer is willing to pay is the fair price the market will bear. If a lender believes it can get more for the house by taking possession of it and selling it themselves, then they will not go along with a short sale.

To begin the process of a short sale, you first need to call the lender and speak directly with the person in the loan workout or short sale department.

If all goes as planned, the lender will receive all of the proceeds, typically not enough to pay off the loan. The remaining balance of the loan is discharged. But a homeowner agreeing to a short sale should also get legal advice to protect his or herself from future claims of the lender. In some states, only purchase mortgages are fully discharged. For all other types of debt (equity loans, refinancing, etc), the homeowner can be held personally liable for repayment in the future. For this reason, a lawyer's advice will include getting the lender to agree to fully discharge all mortgage debt involved in the short sale.”

People who want to go this route should contact a local real estate agent who has worked previously with short sales. Please be advised however, that short sales are difficult and time consuming and more and more lenders are refusing to “pre-negotiate” a sales price. We are finding that most of the lenders tell the real estate agents to bring them an offer and they will consider it. Also, this process works best if you only have ONE LOAN on your home. If you have a 2^nd mortgage or a line of equity on your home, you have to negotiate TWO short sales and we’ve found that the 2^nd mortgage lender is not as negotiable as the 1^st loan lender.

If you are having difficulty paying your mortgage, the quicker you place your home on the market for sale, the better off you will be. Contact Nina Kestner at 615-289-1340 or nkestner@comcast.net for help.

How To Lower Your Electric Bill – Part One

from BeatTheRecession.com

Besides the gas in your car, the next highest energy expense is the electricity in your home. And for some people this is the highest energy cost. Over the next few days we will discuss numerous tips that should help you significantly lower your energy bill. And best of all, most of these are simple and don’t hamper your lifestyle very much at all.

1. Use Time Wisely
10 a.m. in the morning to 2 p.m. in the afternoon is the peak time of the day when the energy usage is highest, due to the combination of the midday sun and business energy use. And guess what - that's when utilities charge the most for electricity. So try to move chores like cooking and running the dryer to later at night or early in the morning, when rates are at their lowest.

2. Lower Your Shades
Even something simple as lowering a shade for a window to block direct sunlight conserves electricity

3. Clean Filters
Change or clean your air conditioner's filters at least once a month. Aluminum mesh filters may be washed. Fiberglass filters should be replaced.

4. Unplug Electronics When Not In Use
Often they use 10% of electricity just by being plugged in. (It is NOT a good idea to try this with your refrigerator or freezer)

5. Use Cold Water For The Laundry
This combined with the change in time will drop your costs significantly.

6. Stop The Dryer As Soon As Clothes Are Dry
Or use the moisture sensor control to automatically shut off the dryer. Overdrying wastes energy and sets in wrinkles. Dry loads one right after another. You'll use less energy because the dryer is already heated.

7. Use Timers To Turn Lights On and Off
When you're not around, it's better than leaving a light on constantly, and also works to fool burglars.

8. Change The Fridge Settings
Keep the temperature between 36 degrees and 40 degrees in the refrigerator and 0 degrees and 5 degrees in the freezer. Use a refrigerator/freezer thermometer to check the settings.

9. Adjust The Temperature Before Leaving The House or Going To Bed
Or better yet, install a programmable thermostat. It will eventually more than pay for itself

10. Install Energy Saving Windows
Your old single pane windows do a poor job of insulating and make you’re A/C and heaters work extra hard.

How To Lower Your Electric Bill – Part Three

From BeatTheRecession.com

This is the third part of an ongoing series on how to lower your electric bill. Please see yesterday’s newsletter for part two.

1. Get an energy-efficient electric water heater. To check, just read the label or call your local power company.

2. Set the thermostat. Set the water heater thermostat at 140 degrees if you have an electric dishwasher or 120 degrees if you do not. Always turn off the circuit breaker before you adjust the thermostat on an electric water heater.

3. Insulate the pipes going into and out of the water heater tank. Add an insulated blanket around your water heater if it's an older model.

4. Get a low-flow showerhead. It can reduce water use by 50-70 percent. A good shower massager can also help give you the feeling of a stronger flow.

5. If you are away – turn it off. Turn the water heater off when you're gone longer than a weekend.

6. Run the dishwasher only when it's full.

7. Use compact fluorescent bulbs. Although they cost a little more than regular bulbs, they last up to 10 times longer and will save up to 75 percent in lighting energy. See our recent Beat The Recession article on Compact Fluorescents.

8. One Not Two. For more light, use one large bulb rather than several small ones. A 100-watt bulb produces more light with less energy than two 60-watt bulbs.

9. Drop the wattage. Use low-watt bulbs where lighting is not critical.

10. Location, Location, Location. Place floor lamps and hanging lamps in corners. The reflection off the walls will give you more light.

11. Dim it. Dimmer switches are actually smarter

How To Lower Your Electric Bill – Part Two

from BeatTheRecession.com

This is the second part of an ongoing series of how to lower your electric bill. Please see yesterday’s for Part One.

1. Put window air conditioners on the shady side of the house (usually the north side). It saves you money by not working as hard.

2. Clear vents of obstructions, shut doors to unused rooms, and close floor or wall registers used for heating.

3. Check that air conditioners and furnaces are the correct size. Too small, it has to work too hard. Too large and they lose their efficiency, therefore using even more electricity.

4. Thermostat savings: Set the thermostat to the highest comfortable temperature. Moving the thermostat up one degree could mean about a three-percent reduction in your electric bill.

5. Turn it off: If you're gone for an extended period, leave your air conditioner off.

6. Have regular checkups performed on systems. This keeps things running smoothly and could catch a problem before it's too late. Like the middle of that unexpected snow storm, or the hottest ever day of the summer.

7. Leave storm windows and doors in place when the air conditioner is on.

8. Plant shade trees. This is especially important on the side of the house that gets the most sun.

9. Keep outside airflow unobstructed. Keep weeds and shrubs trimmed. Keep them away from outside heating/cooling units for best airflow.

10. Turn off all lights, TV's, stereos and radios if no one will be in the room.

Nashville, TN Awards and Recognitions for 2008!!

• #1 Best Place to Live by Expansion Management Magazine – 2 years running!
• #1 Smart Place to Live by Kiplinger’s Magazine
• Top 100 Places to Live
• Top 25 Art Destinations
• Top 5 Most Friendliest Cities
• #1 Most Competitive State for Economic Development
• Sixth Best Airport
• Top 100 Best Places to Start a New Business
• Ranked #4 for Best Entrepreneurial Startups
• Top 100 Best Hospitals
• #15 by Forbes for Best Places for Business and Careers
• 3^rd Best City for Cultural Amenities
• 4^th Best City for Apartment Investing
• Forbes 14^th Best City for Jobs.

Five Questions to Ask
Before Remodeling

NEW YORK -- Spending on remodeling is expected to reach $316 billion this year alone and the number is still climbing, according to the Home Improvement Research Institute. So make sure you know exactly how big a renovation you can afford and whether it justifies the time you intend to spend in your revamped home.

The Nest, a home-improvement Web site, says before making any big changes to your home you should ask yourself these big questions:

1. How long do I plan to stay in my house after the renovations? The longer you plan to live there, the more creative you can be. But if you're planning on selling the house in the next five years, keep potential buyers in mind with your choices. In the latter case, for instance, go with neutral colors in the kitchen and bathroom, and consider maple cabinets. Some people hate oak, others hate cherry, but the majority can live with maple.
   
   
2. Am I doing just cosmetic fixes or am I ready for an all-out overhaul? It's OK to make small changes one at a time, but think long-term about the next step. For example, if you're buying a new sink, buy one with enough holes on the deck for the faucet, sprayer and soap dispenser you might want to add on later. (Cutting more holes into stainless steel or porcelain after the sink is installed is an onerous job you don't want to get stuck with.) And if you know you're going to buy new cabinets later, don't replace the countertop with expensive granite now. The chances of reusing it are very slim -- either it breaks when you try to remove it, or it doesn't match the footprint of the new cabinets.
   
   
3. Am I prepared for the home upheaval? Be realistic about how long these changes might take. Renovations can go on for months, so you need to be prepared to make do without that bathroom, kitchen or bedroom. When checking references before you hire your contractor, be sure to ask if the company finished the work on time. You'd be surprised how quickly a week can turn into a month. And if you're bunking up with your in-laws during renovation, that month can seem like a year.
   
   
4. Are the renovations keeping with the style of my home? Any big changes you make to a home inside should reflect what future buyers will expect from the outside. If you live in a Victorian house, don't make it too contemporary. People who see a historical exterior will expect a historical interior, so stay true to the details. The same goes for a contemporary or modern home, where future buyers may not expect old-fashioned details like antique crown molding.
   
   
5. Are my DIY choices reasonable? You may consider yourself handy, but many do-it-yourself jobs demand your time more than anything else. If you have a full-time job, are you capable of taking on a second one? Some makeovers that are not technically difficult can take longer than you think. For that reason, if you start any job yourself, try to sample it before committing to the whole thing. For example, while refinishing cabinets with a new stain isn't rocket science, sanding down each one can take forever.

A final tip: if you do plan to follow through with a large-scale renovation, do the smallest room in the house from start to finish -- the insulating, rewiring, painting, refinishing, tiling -- so you gain a sense of accomplishment.

Simple Steps to Avoid Identity Theft

From BeattheRecession.com

Yesterday I received a call from someone representing a leasing company who claimed he was referred by D&B and that he had a very large business line of credit for us. He started rattling off personal and detailed questions, including asking me for my social security number – and before answering them, I said, "With all the fraud out there, can I please have your information first?" Before I could say "Hello" again, the line went dead, as his scam was uncovered.

Many readers have written to us in a panic, concerned that they may be the victims of identity theft. At least one of these readers clearly was a victim of such theft - the other two may have had their identity stolen, but it hasn’t been used yet.

We know people who’ve been victims in the past. Unused cards were stolen a couple years ago as the data was apparently on a backup tape that was stolen from some organization and it was actually maxed out before the cardholders became aware of it. It took quite a bit of effort to get that all straightened out, including calls to all the credit bureaus. If they had been even a little bit more subtle, the cardholders probably would have never even known about it and their credit would have been destroyed.

If You Have Fraud Alert
There’s a lot of good advice out there on how to react to possible identity theft - call your bank, all of your credit card companies, and the three credit bureaus, for starters. This advice, though, is really only useful if you’re pretty sure your identity already has been stolen.

§ Equifax: 1-877-576-5734; www.equifax.com
§ Experian: 1-888-397-3742; www.experian.com/fraud
§ TransUnion: 1-800-680-7289; www.transunion.com

Reducing Identity Fraud
Here are some quick pointers to Reduce Identity Theft

1. Do not give out bank account information, credit card information, your Social Security number, your mother’s maiden name, or your drivers’ license info unless you contact the bank or financial institution first – on a phone number you found, not one that was given to you.

2. Never give out personal information to people calling you – even if you have a relationship with the organization. A REAL bank or paypal employee would never ask you for this information by phone or by email.

3. Never enter any information into an online form unless you know quite well who you’re connecting with. Don’t follow links in emails and enter information because it looks like PayPal or Amazon. Instead, go to those sites directly first by typing in the URL. Often scams will have the name is the URL, such as “orders.paypay.122343.com”. This is NOT the same as paypal.com.

4. Also, what you “see” on an email or website can be different than the actual link being “clicked”. So even if you see “Paypal.com”, in an email, the actual link clicked may not be paypal.com. You MUST TYPE in the LINK yourself.

5. Don’t trust the contact info they give you. Look up the organization and find the correct contact information online, then contact them.

6. Cancel unused credit cards except for your oldest one. There’s little reason to keep unused credit cards around unless it’s your oldest card (as length of credit matters in calculating your credit score), so don’t take that risk.

7. Shred or burn any bill statements you no longer want to keep. Often, bill statements contain enough information for at least the potential of identity theft, so keep them filed until you no longer need them, then burn them. Remember, though, that shredded bill statements make fantastic kindling for fires if you’re camping - almost anyone can get a fire started with that stuff.

8. Keep an eye on your credit reports. Get your free credit reports each year and make sure you know what everything is on that report. If there’s some stuff that you’re unsure about, track it down immediately.

9. Control your wallet – and make COPIES of what is there. Know where it is at all times and make sure it’s tough for pickpockets to easily grab it. ALSO – Every 6 months, make a photocopy of everything in your wallet. If it was stolen, would you even know everything that was missing? This has helped me immeasurably on several occasions – after my wallet was stolen in Spain, and a copy of my plane ticket (Pre E-Tickets) allowed me to get on a flight rather than wait 5 days for the next one.

 Top 35 Selling Secrets!

35. De-Clutter!  

    - Everywhere!

34. Clean Up to Clean Up

    - Especially Bathrooms and Kitchens

    - Remove bugs from light fixtures

    - Ask yourself, “Would you want it?”

33. Fix it or Forget it

    - Deferred maintenance if a big problem

    - Fix things before putting on market

    - Buyers make a mental checklist of what all will need to be done. The usually will cost you less to fix that what buyers think it will cost.

32. Go neutral!

    - Use primer first, especially when going from dark to lights.

31. Design to smell

    - Do not have bad smells in you home (i.e. pets, cooking, filth, trash shoes, etc.). These can be deal breakers

    - Open all windows before an open house to air it out. Bake cookies or bread for a nice smell.

30. Spring into action

    - Research shows that the best time to sell is in the Spring.

    - Worst time is usually December, but anyone looking at that time is a serious buyer!

29. Clear it up and clean it out!

    - Yard/curb appeal) get planter beds full of as much color as you can afford)!

    - Some people will not even go inside if the yard and house do not have good curb appeal!

28. Embrace your architecture

    - Make it look nice outside

27. Opportunity knocks

    - Your front door should be inviting! Clean it up, paint, put on new hardware, sweep, etc.

26. Deck it out!

    - The outside is like an extra room.

    - Sand deck and stain or paint.

    - Put out nice furniture.

25. Have them at “hello”

    - You have 10 second to make a good impression.

    - Stand at your threshold and be objective like a buyer would be.

    - Do you make a good impression/

24. Fire up the fireplace.

    - Do not block the fireplace. Show off the assets. Paint just the fireplace wall a different color for accent. A fireplace is the #4 item of wants from a buyer!

23. Furnish for selling!

    - Especially in the Living Room! Pull all furniture off the wall. It creates an illusion of more space when you can see the dimensions of a room. Do not put big furniture in small rooms, and do not put small furniture in big rooms. There are places to rent furniture! There are people who can “stage” you home.

22. Money is in the details.

    - Consider putting in crown molding!

21. Design to dine

    - Dress up your table and put in a nice light fixture!

20. Know your competition.

    - Go to Open Houses in your neighborhood. See what they look like and what other buyers are saying about it. Then go home and compare yours to theirs.

19. Pare it down!

    - Bedrooms should be relaxation and comfort, not a home office or storage room. When in doubt, take it out!

18. Make it all about the bed.

    - Especially in the master bedroom.

17. Create instant luxury

    - Buy nice bedding and window treatments.

16. Clear out the closet

    - Clear out excess items and straighten up the shelves.

15. Price to sell!!!

    - Not to Sit!! You run the risk of scaring off buyers. Buyers think something is wrong with it if it has been on the market too long!

14. Use high end materials

    - Especially in bathrooms and kitchens! Do it yourself (most of the cost is in the labor).

13. Primp your vanity

    - The vanity is the only furniture in the bathroom. Put in new hardware and paint cabinets if needed. Change the mirror and light fixture.

12. Don’t pour money down the drain.

    - Change the shower door. Have the tub refinished (which is a great improvement and cheaper that replacing). Make the bathroom look fresh and untouched. No one really wants to shower where someone else has!

11. Whisk them away.

    - Accessories in the bathroom are very important. Buy new towels, spa lotions, etc.

10. Cook up your kitchen

    - This is the #1 room in the house. Do not clutter the countertops. Clean off the refrigerator.

9.  Reheat your cabinets.

    - Paint (with high gloss or enamel) or stain. Put on new hardware.

8.  Use counter intelligence

    - Update countertops if necessary.

7.  Apply yourself

    - Put in new appliances. Use Stainless steel or a stainless steel laminate over your old ones. If you don’t replace, at least clean the up! Make sure your refrigerator does not have bad smells.

6.  Open up and say “offers”

    - Don’t close in your kitchen. Open up walls to make the rooms look bigger. Be sure it is not a load baring wall or a wall with electrical elements in it.

5.  Go with the flow.

    - Give a good flow. Reposition furniture.

4.  Go from trash to treasure.

    - Make your house a gem!

3.  Match the book to its cover.

    - Make sure the inside looks as good as the curb appeal!

2.  Complete the picture.

    - Make it move-in ready.

1.  Go over the top.

    - Pick your projects. Spend a little money to make it better. Don’t do “nothing”. Do “something” to get it ready to sell!!

Sales Tips: 10 Reasons to Finance With FHA

Many homebuyers are realizing the advantages of FHA loans, but many more are still learning and looking to their mortgage sales professionals for guidance. When your customers are considering whether FHA may be the right loan for them, be sure to mention these 10 reasons to finance with FHA:

1. Increased Loan Limits – FHA loan limits have increased from $200,160 - $362,790 to $271,050 - $729,750 (in high cost areas), making FHA a financing option for more borrowers. In the Louisville MSA the maximum loan amount is $302,500 single family.
2. Easier to Qualify – FHA provides the mortgage insurance for FHA loans. Therefore FHA is able to be less restrictive with loan parameters and guidelines than may be available for conventional loans.
3. Mortgage Insurance – FHA charges mortgage insurance up-front (UFMIP) borrowers are able to finance this into the cost of their loan.
4. Low Down payment – FHA requires as little as 3% down payment, and the entire amount can come from a family member, employer or charitable organization.
5. Cash-out Refinances – On FHA loans, Cash-out refinances are available up to 95% LTV where conventional products are limited to 90%.
6. Less than Perfect Credit – Borrowers with credit problems, such as bankruptcy, may have an easier time qualifying for an FHA loan than for a conventional loan.
7. Income – There is no median income requirement or geographic restrictions on FHA loans.
8. Risk Based Mortgage Insurance Premiums – Beginning in July 2008, FHA will begin differentiating borrowers with higher FICOs by lowering their up-front MIP premiums, effectively reducing their monthly payment.
9. FHA Secure – In 2007, FHA released FHASecure, a program designed to help families who have become delinquent on a mortgage due to ARM resets keep their home. In July 2008, this program will expand to include any borrower having difficulty making their mortgage payment. By the end of 2008, FHA will have helped as many as 500,000 families stay in their home!
10. HUD Home Purchase Incentives – In many states, HUD in conjunction with FHA offers an incentive to buyers who purchase a HUD home, such as a $100 down payment in lieu of the standard 3% requirement. Contact one of our Mortgage Specialists for a list of special offers.