Buy a House Fast

No question about it – Americans love sales, discounts, and rebates.  Will rebates for energy-efficient-appliances encouraging the replacement of old appliances be sizeable enough to stimulate sales?  Based on results from states whose programs already started, the answer is an overwhelming “yes.”  Take Minnesota and Iowa, for example; eager consumers reserved their rebates and exhausted their funds in 5 days.  Phone lines were jammed and the money was soon committed.

Cash for Appliances, the appliance replacement program, funded by the Stimulus bill, is set to begin in April in the tri-state area, and in March or April around the country.  Each state designed its own program, based on the amount of stimulus money allocated and the particular energy needs of its economy, and received Department of Energy approval.

The Pros

New Energy Star appliances save money on energy costs.  New central air conditioning units made after 1998 save 30% off a typical $1,000 yearly bill.  Washers made after 2000 save $135 per year.  Dishwashers made after 1994 save $40.  Refrigerators made since 1993 could have a $100 energy bill.  When all savings are combined the consumer with a house full of Energy Star-compliant products could save $500 or more annually on energy bills.  Figures for all appliances are compiled at www.energystar.gov.  There are more pros than we can count. However, are these energy savings enough to make people buy new products?

The Cons

Energy star appliances that qualify are more expensive than their counterparts.  Virtually all newer appliances use less energy than in the past, but the Energy Star models are predicted to save even more per year.  Appliance maker, Whirlpool, notes on its website that the suggested prices for its line of Energy Star refrigerators is $649 (15 cubic foot) vs. $2,999 (22 cubic foot) vs. $529 (14 cubic foot) to $1,009 (22 cubic foot).  The features in the various models differ but cash strapped consumers may be more concerned with immediate out-of-pocket costs than long term energy savings.

In most states, the program covers washers but not dryers.  (Most dryers use about the same amount of energy.)  Consumers who want matching appliances will pay more for both parts of the pair but will only be rebated on half their purchase.  Will this tempt consumers to select a cheaper pair?

The state-designed programs will only apply on purchases made once the program is in effect.  To keep the program within budget, consumers in most states must notify the state what appliance(s) they intend to buy and then take their “rebate confirmation number” to the dealer within a specified time in order to claim the mail in rebate.

For consumers who need to replace an appliance before the state program kicks in, appliance manufacturers are offering their own rebates and special pricing deals.  Some lucky consumers can claim the state rebate, cash in the manufacturer’s deals, and even claim a federal credit where applicable.  In DC and Maryland, area retailer Pepco offered rebates as early as last fall, and other stores are likely to follow suit.

Critics of the rebate programs make similar observations as those negative about the Cash for Clunkers program or even of the housing credits.  Some people would have bought anyway…  After the rush of buying to claim the rebate, sales will fall off…  The energy savings are not significantly greater than the cost of the program…  Consumers pay for the program through local utility company surcharges…

Critics will always have something to say. We just have to take it with a pinch of salt. However, by all indications, the Cash for Appliances programs shows promise of being popular, just like the Cash for Clunkers program before it.  Even if some people miss the rebate, the hope is that they will take advantage of other deals once they’ve whet their appetite to buy.

Looking for a home to put those new appliances in?  Express Realty Services can help you find an affordable home in the DC area, including Virginia, or Maryland.  Express Realty Services has a great selection of homes to fit your budget.  We can even show you our latest remodeled and renovated homes from our sister company, Express Homebuyers!  Call today or visit the Express Realty Services website.

Sellers, with all the talk about the Home Buyer Tax Credit, are you feeling left out?  You’ve heard for months that it’s a buyer’s market out there, which has meant you’ve been encouraged to take a hit on the price to make your home fit within current market pricing and then make further concessions to a buyer to seal the deal.  This is frustrating.

People always want to sell high and buy low.

When the home that you have sacrificed for is what’s up for sale, you want the listing and selling prices to reflect your equity, cover your mortgage, and cover the improvements you have made.  Your real estate agent has carefully reviewed neighborhood comparable values (comps) with you and taken your improvements into account, but your suggested listing price may not be what you hoped for.

The Home Buyer Tax Credit offers you a chance to reassess your position. Now, repeat buyers who have lived in their home for at least five of the last eight years qualify for a $6,500 tax credit.  If you have been thinking of making a change, the credit allows you to do that.  Why?

First of all, if you have a home priced under $250,000 in most parts of the country, your home is on the radar of many first-time buyers. True first-time buyers, those who have never owned a home, tend to be younger and not as affluent so an affordable home might be just want you want to sell.  In DC and suburban Maryland, homes at these price points are selling much faster than last year.  If you want to sell, you might not only find a buyer, you might get multiple bids on your home.

Second, if you have been wanting to move, the $6,500 might give you the help you’ll need. This will offset the closing costs, partly compensate you for any loss in value, or give you some working capital for projects in the new house.

Third, when you are house shopping, you will also have the “buyer’s market advantage” on your side and be able to get more house for your money. If you are looking for a bigger, better house, the seller may have lowered the price to meet the market.  With the low interest rates currently offered, you might be able to find your dream at such a deal you’ll feel less pain at how much you had to lower your price.

Fourth, the credit is called a move-up credit, but you don’t have to buy a more expensive home to qualify for the $6,500. If you are looking to downsize due to retirement or a lifestyle choice to simplify, you can find a new place that costs less and still get the tax credit.

Fifth, if you’ve been wanting to turn your home into a rental, this could be your chance. Current interpretations of the new law do not prohibit you from keeping your current home as investment property or buying another for yourself as the primary residence.

Sixth, this credit could give you a chance to revisit a prior decision. Say you decided to move to Florida to retire, but now, a few years later, you realize you miss the seasons, miss the lively bustle of DC, or want to be closer to your kids.  If you have rented for more than three years, you can use the First Time Home Buyer Credit to buy a new home or condo up North.  If you bought and have lived in your home at least five of the last eight years, you can sell and buy elsewhere with the $6,500 bonus.  You can even turn your current home into a vacation home, buy a primary residence elsewhere, and claim the credit. (For some of these trickier scenarios, make sure to consult your tax adviser.)

The purpose of the new credit to is to stimulate the housing market at all levels, although homes that sell for over $800,000 won’t qualify. Since the credit is expected to cost the government $10.8 billion in lost taxes (plus $10 billion for the first phase), it is highly unlikely that it will be renewed. As the time lines roughly correspond to when interest rates are likely to remain low, these next five months are the perfect example of a “once-in-a-lifetime opportunity” for you as a  seller to move your home.

Express Realty Services specializes in selling homes fast. We are a licensed real estate brokerage company serving Maryland, Virginia, and Washington DC with a great track record in moving properties.  After all, we are the fourth largest Keller-Williams operation in the world, so we are well equipped to help position you to move on.

Contact us now for more information or check out our website for tips on buying or selling a home in Virginia, Maryland, or Washington DC. Ask us about our Guaranteed2Sell program when you call.