Louisville Real Estate News : February 2009

Continued from The First Showing

The Tuesday after the insane woman viewed our Shepherdsville home, another agent called to setup a Wednesday showing.  The good news was the kids hadn't been able to do much damage to the house during the preceding days.  The bad news was the combination of a 4:30p showing time, my previous plans and the fact that both kids had colds meant my wife basically had to drive them around for 15 30 45 minutes while this couple toured our home.  Oh well, we all have to make sacrifices :)

As I turned into The Pointe around 6:30, my phone rang.  The buyer's agent wanted to know if her clients could come back and see the house again.  They were about 5 minutes away and wanted to do so before returning to their current home.  "Of course," I said and then muttered a quick prayer that the kids hadn't scattered toys everywhere or weren't in the bathtub yet. 

My prayers were answered and we were able to load them into the car, turn on all of the lights and get out of the door in about 4 minutes.  For us, this is the equivalent of a 12-second pit stop at the Daytona 500. 

It just so happens Shepherdsville was being hit by a wind storm around this time.  With trees, telephone poles, etc already weakened from the ice storm, we decided not to venture too far from home.  And since we didn't want to take sick kids to friends' homes or traditional safe havens like McDonalds, we opted to pull into a driveway of a vacant home.  While waiting the 15 30 45 60 minutes for the couple to complete their second tour, I reached the conclusion that car DVD players rank in the Top 5 greatest technological achievements of all-time.

Upon arriving home, we got the twins into and out of the bath and ready for bed (more speed records).  I contemplated calling the agent for feedback, but hunger prevailed and I decided to eat dinner instead.   Then the phone rang.  Recognizing the agent's number, I pushed aside my sandwich, grabbed a pad and hit the green button.  After a brief exchange, I heard one of the best phrases in real estate, "I have an offer for you." 

Still a lot to do before we celebrate, but at least we can put the bottle on ice.

Next... The Offer

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.  

Background

As a result of the 2009 Economic Stimulus Package, Louisville first time home buyers have an opportunity to purchase a home and get FREE money.  In order to stimulate the housing market, the House and Senate improved the $7500 refundable tax credit by increasing the dollar amount to $8,000 and eliminating the repayment requirement.

Definitions - US Government Dictionary

First Time Home buyer

Anyone who has not owned a primary residence home in the last 3 years.  If you had 47 Louisville homes earlier in you life, but sold them all prior to 2006 and rented since then, you are a First Time Home buyer and are eligible for the credit.  If you have 63 vacation homes, but no primary residence in the last 3 years, you are a First Time Home buyer. 

Not a First Time Home buyer

If your spouse owned a home in the last 3 years, you do not qualify regardless of whether you even knew them at the time.  As an aside, if you are engaged be careful trying to convince your partner to delay the wedding in order to buy a home and get the credit.  While this is legal, the medical bills could easily exceed the tax credit if not approached correctly.

If your Modified-Adjusted Gross Income (MAGI) exceeds $95,000 as an individual or $170,000, you are not a First Time Home buyer even if you have never owned a home.

Home

Your primary residence.  This can be a house, condo, town home, mobile home, or houseboat. 

Refundable Tax Credit

The money is applied to your tax return even if you owe less than the amount of the credit.  For example, if you owe $1000 in taxes and are eligible for the $8000 tax credit, the IRS will send you a check for $7000. 

FAQS

Free Money!!? How do I get mine?

1. Meet the criteria defined above.
2. Buy a home in Louisville or the surrounding areas.
3. Use this home as your primary residence.
4. File your taxes.  (Use Form 5405)
5. Wait. 

Do I really get $8,000? 

• You get 10% of the purchase price of the home or $8000 whichever is less. 
• If your MAGI is between $75,000 and $94,999 as an individual or $150,000 and $169,999 as a couple the credit is pro-rated.  I'd explain, but this post is going to be too long already.  Call me or your accountant.

And I don't have to repay the Tax Credit?

Not unless you sell you home within 3 years.  If you are concerned about the possibility of moving, etc within that time, I'd avoid cashing the check at Churchill Downs.  (For that matter, I'd avoid the S&P 500 as well).

I want to buy a Louisville home, but don't have enough money for a downpayment.  What can I do?

The $8000 tax credit can be earned even if you use KHC (Kentucky Housing Corporation) or RHF (Rural Housing Fund) money to assist with the downpayment.  Note that income restrictions for KHC or RHF money are lower than those for the credit.  If you are an individual making $60,000 and don't have 3.5% to put down, you are going to have to beg, borrow, or steal it from somewhere else.  While you are figuring out how to do this, you should consider developing a budget.

I bought a Louisville home earlier this year and filed for the $7500 tax credit.  Can I get $8000 tax credit instead? 

The short answer is YES.  The longer version is that the procedure hasn't really been worked out yet.  The most likely scenario is that you should file an amended return.  Talk to your accountant.

I bought a Louisville home in 2008 and filed for the $7500 tax credit.  Can I get the $8000 tax credit?

No.  The $8000 tax credit only applies to purchases on or after Jan 1, 2009.

That's not fair.

Really?  The government is giving you a 15-year, zero-interest loan and you are complaining??  As my dad used to inform me on a regular basis, "Life's not fair.  Deal with it."  By the way, those who bought a home before April 9th, 2008 don't get anything so don't complain too loudly.

What else do I need to know?

The $8000 first time home buyer credit expires on November 30th, 2009.  If you have a contract on a house, but have not closed by Tuesday December 1st, you are out of luck.  You should allow 4-5 weeks between contract and closing when buying a home in Louisville.  My guess is that many people will procrastinate and try to squeeze a closing in at the last minute.  Louisville title attorney's will be swamped and some deals will not make it to the table in time.  Act now while rates are low, prices are fair, inventory is high, and you are sure to get the credit. 

How do I proceed?

Call, txt (502-921-3989) or email me and I will be glad to help.

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes.    

Continued from Listing My Home

This isn't my first rodeo.  I've sold homes before.  I've even sold investment properties that I owned.  For some reason, every day that passed and I didn't get a call, was nerve-racking.  The remnants of the snow and ice storm pretty well shot the first weekend.  People were too busy cleaning up and restocking their current homes to bother looking for a new one.  By mid-week, my buyer clients and leads started calling.  They wanted to schedule showings or get more information on homes.  The work was distracting, but I still kept waiting for that first call on my Shepherdsville home.

After an eternity(7 days according to the calendar), the call finally came.  Good news!  A woman wanted to see the home Sunday afternoon.  The less good news was that the house was suffering from lax cleaning efforts.  Additionally, my wife was supposed to make chili for a Sunday luncheon at VIPS.  Obviously, cooking chili before buyers come is a no-no as overwhelming smells can be a real turn-off.  So on Saturday, she cooked, I cleaned, and the kids made a mess.  We got up on Sunday made a final push to pick up the remaining toys and got out the door just before the buyer arrived.

I knew from the buyer's agent that the buyer was seeing multiple homes that day.  Therefore, I not so patiently waited until Monday morning to call for feedback.  The call was brief.  What I think she said was, "The house looked great, but my client wants to make an offer on a house in Mt Washington first."  What I heard was, " The house looked great, but my client is certifiably insane."

After initial disappointment, I realized this was for the best.  It's never a good idea to enter into contract negotiations with lunatics :) 

Now, when the heck is my phone going to ring again!? 

Next - Picking up the pace - The Second Showing 

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.  

Continued from Setting the Price

All of the preliminary work is complete and it is time to let buyers know that my Shepherdsville home is for sale.  The next step is to implement the marketing plan.  You simply cannot sell a house if the prospective buyer does not know it exists.  Therefore, I concentrate on informing as many people as possible that the house is for sale.  

By casting a wide net, I increase the odds that I find THE buyer who is willing to pay the most money in the shortest amount of time.  Like average listing agents, I put a sign in the yard and place the home on the MLS.  But that's where the comparison stops.  In addition to producing high-quality flyers and postcards and emailing other agents, I spend the time and money to properly market homes online.  I know for a fact that at least 30% of potential buyers who view my visual tours come from my flyers, postcards and/or websites not fed from the MLS.  This is a huge benefit to my clients (in this case me).

The best laid schemes o' mice an' men/Gang aft agley." -- Robert Burns 

No amount of integration or planning could overcome the ice storm that crippled Louisville and left tens of thousands without power for days on end.  While ours was only out for a few hours, I decided to postpone listing the house for a few days.  Figuring that no one, including myself, was spending much time looking for homes, I didn't see any reason to list until the roads were at least cleared.  Finally, I loaded everything Friday night and Saturday morning.  

On a personal note, I don't think it hit me until I was done that we really planned to move.  Until that moment, I had something to fix, prepare, plan, implement, etc.  Everything on the list was now crossed off.  The only thing left to do was to get excited.....and nervous. 

Next- WooHoo! - The First Showing 

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.  

Continued from Promotional Materials

Completing a full CMA and determining a reasonable listing price and expected selling price is normally one of the first things I would complete for prospective clients.  As I pay particular attention to all real estate activity in The Pointe, I have a fairly good idea of my home's selling potential.  Since, I was comfortable with the price range, I put this exercise off until I was ready to list the home. 

Once all of the preparation was complete and the marketing materials were ready, it was time to get serious about the numbers.  Today's market demands extra vigilence when setting price.  Even being off by a few percent can mean the difference between a successful closing and an expired listing. 

I use a 3-stage system for calculating listing price and expected selling price.  First, I complete an automated CMA using MLS data for the last 6 months.  I can filter the input data to include or exclude homes based on size, proximity, construction and a host of other features.  In populated areas with similar homes, the computer will spit out a number that is +/- a couple thousand dollars.  In less dense areas, the variance is greater.  Regardless, I only consider this a starting point. 

The second phase is to create a spreadsheet showing the subject house (in this case, mine) versus all other similar listings in the area over the last 6-12 months.  I make price comparisons based on size, # bedrooms, and a host of features such as the presence of garden tubs, fireplaces, walk-in closets, etc.  I make adjustments based on my familiarity with the properties after touring, when possible, or reviewing the mls photos.   

The third step is to visit the house and make final adjustments based on the condition of the home and intangibles such as the way the house flows and the impressions a buyer will have. 

Note: For a variety of reasons, I am not including my analysis here.  However, I am confident that a listing price of $190,000 is appropriate for my Shepherdsville home and I expect it will drive traffic.

Next - Let the Game's Begin aka Listing my Shepherdsville Home

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.  

Continued from Preparing the Home

Although the house is ready for buyers, I wanted to have all of the promotional materials completed BEFORE the house hit the market.  In order to accomplish this goal, I needed to lay the foundation for my integrated marketing campaign.  Among other things, this includes 

1. Take photographs and resize them for various outlets
2. Create a Virtual Tour
3. Create and order Flyers and Postcards
4. Research Neighborhood, Schools, Taxes, Etc

Photographs - Of course, a wide angle lens is a requirement.   

Create a Virtual Tour - Upload photos and develop descriptions for each. 

Flyers and Neighborhood Postcards- I use a common design theme for flyers, post cards, open house notices, etc.  Of course, these are printed on high quality, glossy card stock and contain the link information to the Visual Tour.  

Additional research - Since this is my home, my normal level of research is greatly reduced.  I already have a Neighborhood post for The Pointe and a post containing information on Schools in Shepherdsville.  So, once I looked up Bullitt County Property Taxes, I was all set.

Next -  Setting the Price

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Shepherdsville Homes.    

Continued from Selling my Shepherdsville Home ~ Part 1

Once we decided to sell our Shepherdsville home, we immediately made a list of everything required to prepare it for sale.  To compile this list, we went room by room and tried to see the home as a buyer would.  The biggest areas of focus were the 3 C's of Staging...

1. Clean
2. Clutter-free
3. Color

From dusting the ceiling fans to wiping down baseboards, our first priority was to make sure that buyers wouldn't have any reason to think that this was not a well-kept home.  The carpets had been cleaned over Christmas, so we did not redo this.  Everything else was mopped, wiped, dusted and/or polished.

To make sure potential buyers could focus on the home and not our belongings, we decluttered the whole house.  This included packing all non-essential items including summer clothes, seldom used kitchen accessories, extra linens, toys, pictures, etc.  We also donated many items to Goodwill and threw away all that stuff that was saved 'just-in-case.'  In total, we filled 8 Rubbermaid crates and 10-15 boxes.  When we were done, no closet was more than 1/2 full, the kitchen counter was clear, and everything visible was there intentionally.

The biggest challenge was our basement.  We built this as a playroom for our kids.  When doing so, we chose bold colors for them and a carpet that was 1) cheap and 2) durable.  Not everyone has young children though and we didn't want to turn anyone off.  We removed the slide, painted the room and installed new carpet.  While we still have toys for the kids, I think you'll agree that our efforts made a substantial difference.

The final step was to complete repairs.  Our house is only 3-years old so there was not a lot to do.  However, 5-year olds can certainly leave their mark.  I patched most dings in the wall, touched-up the paint where needed, replaced any burnt-out lights, replaced smoke detector batteries, etc.

Total Time: ~2 weeks 

Only after all of this was done, was I ready to work on the promotional materials. 

Next --- Getting Ready to Promote our Shepherdsville Home

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Erik Hitzelberger is a licensed REALTOR with RE/MAX Alliance in Louisville. If you need a Shepherdsville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Prospect, Middletown, Jeffersontown (J-Town), Fern Creek, Okolona, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Bullitt County Homes 

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Bullitt County Real Estate Market Report- This report analyzes property sales trends for Bullitt County homes over the last few months and versus the same time period last year.  The report includes number of homes sold, average listing price, average sales price, days on market (DOM), and current inventory.

Bullitt County encompasses the primary cities of Shepherdsville, Mt Washington, and Lebanon Junction.  Home sales from the smaller cities of Brooks, Fox Chase, Hebron Estates, Hillview, Hunter's Hollow, Pioneer Village and Zoneton are also included, but these are generally listed as Shepherdsville homes in the MLS.

Comments and Analysis

At first glance, this looks devastating.  List price and Sales price are down 16% and the number of homes sold is down by over 41%.  While you won't find many people jumping for joy, taking a deeper look reveals a couple of interesting points

1) Avg DOM is 3 months.  This has been consistent over the past several years.  Bullitt County homes that are prepared to sell, priced correctly and promoted well do sell.  In other words, if you are serious about selling your Bullitt County home, you have a reasonable expectation of accomplishing that goal with the proper agent. 

2) SP/LP ratio is almost 96%.  Buyers are educated.  They understand home values and are willing to pay at or near full price for a properly priced home that is move-in ready.  The sellers who got contracts on their Bullitt County Homes in December knew this.

3) Price is not really off 16%.  As I reported in my Shepherdsville Market Report, one home sold for $1.5 million in January of 2008 and skews the data.  On average, prices are flat vs. 2008. 

Buyers

You still have a great opportunity to create your own success story and get a great deal on a Bullitt County Home.  The combination of historically low interest rates and flat prices means your payments are lower than they would have been last year.  At this point, first-time homebuyers are eligible for a $7500 tax credit.  However, the Senate has included a $15000 tax creditfor all homebuyers in their version of the economic stimulus package.  The best 3 things that you can do for yourself are to

1. get serious,
2. get pre-approved, and
3. find a good Bullitt County Real Estate agent.

Sellers

If you are serious about selling your home, now is the time to get it on the market.  Buyers were out in force before the ice storm and will be back now that the weather has started to turn.  If you want to sell, you need to

1. be realistic with your price,
2. prepare your house for sale, and
3. find an agent who can promote your Bullit County home properly.   

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Erik Hitzelberger is a licensed REALTOR with RE/MAX Alliance in Louisville. If you need a Bullitt County Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Prospect, Middletown, Jeffersontown (J-Town), Fern Creek, Okolona, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Bullitt County Homes 

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Final Update -- The 2009 Economic Recovery Act passed without the $15000 tax credit.  However, the new law includes an $8000 tax credit for first-time homebuyers that does not have to be repaid.

2/11 Update - 10:30p EST - The Lieberman-Isakson $15000 tax credit has been removed from the 'final' bill during negotiations between the House and Senate.  There is discussion that the $7500 tax credit will not have to be repaid.  I am looking for confirmation of this.  Regardless, first-time home buyers need to act before July 1st to take advantage of the credit.

2/11 UPDATE- 8:00am:  The Senate passed their version of the Ecomonic Stimulus Package yesterday and the $15000 tax credit for homebuyers was included.  Now, the House and Senate need to get together and reconcile the differences in their respective bills. 

Orginal Post....

Last night the Senate voted to include a $15,000 tax credit for homebuyers into the 2009 Economic Stimulus package.  This amendment was proposed by Senators Lieberman and Isakson and is significantly different from the current $7500 tax credit available to first-time homebuyers.  (See chart for details).  If the amendment survives the House vote, it will really drive the housing market. 

I will keep you informed with respect to the bill's progress, but you need to seriously consider your plans for the future.  This may well be the best opportunity you ever have to buy a home, trade-up, and or create wealth.  Don't miss out. 

Key Points:

1) At this point, the Lieberman/Isakson amendment applies to ANYONE purchasing a home for a primary residence. 

2) The $15,000 does not have to be repaid.

What does this mean for the Louisville Real Estate Market?

1) If you are considering selling, get prepared now.  Find a knowledgeable agent who knows how to promote your Louisville home and begin cleaning and decluttering.  If this passes (very likely), buyers will jump from the fence and start looking.  You want to be ready before anyone else.

2) If you are considering buying, don't wait.  If the amendment survives, the purchase period is retroactive to Jan 1st.  Therefore you will still qualify.  If you wait, the amendment fails, and the current legislation expires; you could miss out on everything.  Additionally, upon passage, more buyers will enter the market.  More buyers = More Competition = Higher Prices. 

Regardless, call, txt (502-921-3989) or email me now and I can advise you on your specific circumstances. 

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes.   

I have always had an entrepreneurial spirit.  Over the years, I have had many ideas that I could and would make good business concepts.  For a variety of reasons, I have only acted on a few of them.  Today's concept is different though. This has low barriers to entry and is foolproof.  In fact, it actually depends on fools.

With non-appreciating home values, tremendous selection and once in a life-time interest rates, home buyers have hit gambling's equivalent of the Trifecta.  Throw in the $7,500 tax credit and first-time homebuyers are sitting on the best opportunity of their lives to create wealth in their families.  Unfortunately for them, buyers either don't know what they are missing or are foolishly afraid of success.

Within a relatively short-period of time, these conditions will change.  Rate increases will be the most likely culprit.  Stealing 11% of buying power with every 1 point increase.  Buyers will watch helplessly as they realize that 'the deal' they was in their grasp, but has now passed. 

This is where my plan comes into play.  Once buyers and sellers realize the error of their ways, they will want to kick themselves in the rear for not acting.  As this is virtually impossible to accomplish with any measure of satisfaction, the ex-potential buyer will be further depressed by an inability to accomplish this simple task.  For a nominal fee, I will rectify this situation.

Here's my Press Release...

Grand Opening Celebration of Louisville Ass-Kickers

Where : Shepherdsville - Near the stockyards

When: April 1, 2009

Who: All Louisville, Shepherdsville and Mt Washington persons who have not taken advantage of the current real estate market.  Specifically, if you can answer "yes" to any of the following questions, this service is for you!

• Did you miss out on the purchase of a great home because you were waiting on rates to drop and someone else bought it?
• Did you miss the lowest rates in history because you were not pre-approved?
• Are you going to wait until June to start looking and miss the $7500 Tax Credit?
• Are you missing buyers because your house is not on the market?
• Are you missing a sale and costing yourself money because your home is overpriced or under-prepared?
• Did your listing expire because you didn't choose an agent who could market your Louisville Home Online?

What: For the low price of $100 / kick, deluded souls can line up for a proper kicking by a real ass.  Our donkeys have been specially bred and maintained to deliver a blow that is sure to prevent you from sitting idle the next time opportunity knocks at your door.  (For that matter, it will be some time before you sit at all).

SPECIAL: The first 100 customers have the right to pay twice the normal rate.  You've been throwing money away anyway, why stop now? 

Call NOW to reserve your spot in line.

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For those of you who want to avoid the long lines, check out these articles on how to accomplish your real estate goals.

Attention Buyers: Create Your Own Success Story

The $7500 Tax Credit

How to Market Your Louisville Area Home Online

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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley.  Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes.