Unless you've been under a rock, you have heard about the furor over 'Joe the Plumber.' (Actually I understand that his full name is actually Samuel Joseph Wurzelbacher.) But at a time when 'Joe Six Pack' and the 'Bridge to Nowhere' have captured the national spotlight, it's no surprise that our attention has been riveted by the the question'Joe the Plumber' asked Presidential hopeful Senator Barak Obama during a routine campaign stop in Columbus, Ohio.
"How Will Your Tax Plan Affect My Plan to Become A Small Business Owner?" (my paraphrased version)
Joe concern centered around his perception that his personal tax rate might be adversely impacted by the senators proposed tax plan. Thus, a worldwide debate sparked about what would be best for Joe!
Well, I've been thinking about Joe's welfare too. Because in a tangible way, Joe symbolizes everyman. Everyone of us who is wondering what to do next in the face of an increasingly complicated world. Everyone who has tried to cut through the noise and confusion and struggled to figure out what in the world makes the most sense today.
GOOD NEWS: It has occurred to me that unlike the bizarre direction of much of the current political debate, real estate professionals have some real solutions at their disposal which can help Joe and countless millions like him actually reach their financial goals. The fact is that Joe wants what all of us want.
1. A Good Value for His Investment
2. Relief from Excessive Taxation
3. Something that he can call his own!
THE FACTS: Owning ones own home continues to be a solid investment. Despite, the crisis in the subprime lending industry and the subsequent economic chaos which ensued, the fact remains that the vast majority of Americans, (over 96%) continue to pay the mortgage on their home in a responsible manner. Here in Grand Rapids, MI real estate professionals have continued to sell homes despite the enormous challenges that our state has faced through this economic crisis.
MORE GOOD NEWS: The Value Proposition for Buying a Home remains a sensible way to get the best bang for your buck...especially TODAY, when we have pretty near historic lows for interest rates and a remarkable inventory of homes on the market for sale.
This week, Scott DeWolf, a manager and Senior Loan Officer with Exchange Financial completed the second part of a 2 Week Series on The Financial Markets and Loan Options for the team at Audu Real Estate. He shared these facts with our agents.
On the purchase of a $120,000 home, in Grand Rapids, MI today, the average buyer would enjoy the following:
1. An interest rate of approximately 6.37%
2. A principle, interest, insurance and tax payment (PITI) of $932/month
3. An upfront investment of 3% on an FHA mortgage and 1% on a MSHDA mortgage
4. A nice sum of $116 going towards the principle of their mortgage monthly for a total of $1392/yr
5. Access to a $7,500 TAX CREDIT through the IRS if he buys his first home before July of 2009
6. A gain of over $7,000 that he wouldn't have flushed down the toilet by paying rent! *
*This information does not include the tax credit that homeowners get for owning a property. The gain in the example above only reflects the difference between paying yourself $116/month towards your equity rather than giving $8,400 to a landlord to pay down their equity!
Compare this to paying between $700-800 for a 1-2 Bedroom Rental Unit!
This is only $132/month more to OWN your own home!
WAIT A MINUTE: ADD the tax deduction for home ownership & you're paying LESS than rent!
So, What can 'Joe the Plumber' get for $120,000 TODAY in the Grand Rapids, MI market? Well, it turns out to be a whole lot of Value and a generous supply of homes. In fact, today a search on the local MLS revealed that there are over 4,303 homes, some of which can be viewed here.
The current housing market offers remarkable opportunities for 'Joe the Plumber' and other straight talking Americans to review the facts and determine whether they'd be best served by purchasing a home after the Tax Rebate option expires in July 2009 and when interest rates have increased OR if the better plan of action is to take advantage of some unique options which are available to qualified home buyers today!
At Audu Real Estate, we help people to make smart decisions. Buying a home may be the largest financial investment you will ever make. Don't allow the politicians, media mavens and the barons of Wall Street to scare you or cloud your options. Talk to a qualified real estate professional who can help you determine what choices will be of the greatest benefit to you Today!
Copyright 2008 Audu Real Estate All Rights Reserved
picture is courtesy of Mike Lichton Flickr.com
Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.
Nicely done!!! Go Joe!
Elaine...LOL...Who would have thought that 'Joe' would make us think this much?
Lola, excellent, excellent point that 96% of the mortages are being paid on time. Unfortunately it is the 4% that are not that get all the attention. From all the news on foreclosures and short sales, you would think that these figures were the other way around.
Hi George, Thanks for your comment. Isn't it remarkable that everyone continues to focus on the problems in the market while ignoring some of the HUGE opportunities that exist right now. My team agreed that the meeting with Scott was one of the most informative training sessions we've ever had. Real Estate agents and mortgage professionals need to aware of these options for home buyers and communicate them effectively...especially now.
Lola, I loved the post! Joe certainly sparked a debate of his own but your points are well taken. I have seen friends pay rent for years and years---they have never owned a home and have always paid someone else's bills. It's a shame but now is a wonderful time to buy and anyone that can should take advantage of that fact!
Great thoughts, Lola. It's nice to see the examples clearly laid out giving us great ideas for our work with buyers in today's market.
Amen Carole! If a buyer has good credit and cash reserves, renting to pay someone elses bills just doesn't make sense.
Thanks Sondra. Our team was very attentitive as Scott laid out this very easy to follow example. When you see it like this, a lot of things make sense. It's sad to see so many people (agents and home buyers) missing opportunities because they don't have a clear grasp of the facts.
Lola ~ There really hasn't been a better time to purchase a home in a long time! I love the way you illustrated your points with proof.
kk
Great point Lola. As far as being renters though I really think there are some that will always be renters because they don't want the responsibility of owning.
Great picture LOL. It is a great time to buy and it is wise for buyers to take advantage of the current real estate market while it lasts.
The line for your new home forms on the left. No pushing and shoving there is plenty for everyone.
Lola,
Thanks for the post. Perhaps you can freelance as a consultant to the candidates. America needs to hear this from those who understand it best.
Hey Lola, good post. I plan on posting something similar! See you soon. Have a safe trip.
This has been the best breakdown I have ever seen on the advantages of owning a home. Lola, you rock!
I love the stats you provided! It is so true, and "Joe the Plumber" and anyone else out there that can get a loan should be taking advantage of the great deals in real estate now!!!
Kristal, like they say..."Sometimes, you've just got to break it down!" :)
Teresa, that's true. Some people are better served by being renters for a variety of reasons. I'm concerned about those homebuyers and even some real estate agents who don't really understand how to make the VALUE comparision. It's important to have the facts so you can make an educated choice about what makes the most sense.
Patricia, I agree. When people like Warren Buffet recognize buying opportunities and invest, I think it may be worthwhile to take a look at the market and make sure one is not overlooking a bargain hiding in plain site! (pun intended)
Terry, very funny LOL...But really, Consumers waiting for a 'wake up' call will miss this early bird opportunity. It's hard to argue with the numbers. :)
William, Thanks for stopping by. I'm actually more concerned that the buyers get the message.
Thanks Takara! This is a great message to spread around. :)
Hey Kris, Thanks!
Caren...Absolutely. We need to be sharing these type of stats with 'Joe the Plumber' and everyone else who can benefit from the incentives available for home ownership today!
I actually didn't know that you have posted this one here on Active Rain. I first read and commented on this blog on your Realtown blog. I am glad to hear that in spite of this real estate market,you are doing well in Michigan. Have a great weekend. Great post.
Thank you Lanre. We remain grateful to God. I heard a recent quote that real estate agents today are doing 10 years of work in 5! We are working hard and continuing to enhance our level of service to our clients. Thanks for stopping by the realtown blog too.
This is a great post to pull in those buyer leads that we can now capture! Isn't it exciting that there is lead generation as well here in the Rain. Again, can't wait till you come to Ann Arbor! It will be a great presentation I'm sure.
Karen, Thanks for stopping by. I just got back from speaking to a great group at the Clare/Gladwin Board. I'm loving the new changes on Active Rain with the Listing Router too. This is a time to invest in innovative thinking & it's forums like Active Rain which are the leading edge. Very exciting!