Tax Credit Closing Deadline Extended

The $8,000 First-time Home Buyer and $6,500 Repeat Home Buyer Tax Credits closing deadline has been extended to September 30, 2010. The deadline had previously been set at June 30th, 2010. This will give buyers a few more months to get those deals closed.

The extension applies only to transactions that had executed contracts in place as of April 30th, 2010, and have not yet closed. There will not be a gap between the original deadline of June 30th and the date President Obama signs the bill into law.

Additionally, Congress has extended the National Flood Insurance Program (NFIP) through September 30th, 2010. The bill is retroactive and will cover the lapse period from June 1, 2010, to the date the law is enacted.

For additional information on both the tax credit deadline and the National Flood Insurance Program, visit here:  http://www.realtor.org/Government_Affairs

Survey Shows End of Home Buyer Tax Credit Unlikely to Deter Buyers!

Looks like those who are looking to sell this summer have some good news! According to findings released by Prudential Real Estate and Relocation Services, Inc., 65% of surveyed consumers who are currently in the process of shopping for homes, believe that the end of the tax credit will have little or no effect on their interest in purchasing a home.

Furthermore, more than 90% of consumers believe the home buyer tax credits have helped both first-time home buyers and the U.S. housing market overall. As for people's local areas, 46% of consumers are expecting prices to increase over the next year, compared to only 12% who believe they will decline. As for consumer's outlook over the next five years, 79% expect real estate prices to increase and 20% expect a "substantial increase" in home prices.

With regard to home ownership as an investment, an interesting finding of the survey is the majority of consumer's (75%) believe home ownership is a better investment than individual stocks and bonds. 72% believe home ownership is a better investment than mutual funds, and 74% affirm that it's better than a traditional savings account.

Yet another fascinating revelation, is that despite the real estate downturn nationally and the softened economic state the U.S. is in, the perception of home ownership as a quality investment remains strong with renters. Of those who currently rent, 75% believe that in the long-term, owning their home is a more satisfactory choice over renting.

The survey by Prudential Real Estate and Relocation Services, Inc. was conducted during April 15-20th, 2010 and included 1,000 Americans between the ages of 25-64 with a household income of at least $35,000.

 

This is a bit of good news for both buyer's and seller's in the wake of a tender economic state. I've always believed that the generation of jobs should be the number one economic concern of the government and with that comes everything else. If people have money, they'll buy property. This is probably easier said than done and I am certainly no economic strategist. I'm just a pro-style agent. I try not to spread my expertise too thin. People get jealous and no one likes a know-it-all. Suddenly, I'm reliving those moments of being picked last for kickball in 6th grade. My mom said it's because it was the picker's strategy, act like you don't want the best player so you can build the rest of your team. She is so smart!

http://rismedia.com/2010-04-28/end-of-home-buyer-tax-credit-unlikely-to-deter-most-real-estate-buyers/

New Home Sales Jump Almost 27% Nationally in March!

New home sales nationally have jumped 26.9% in March over February 2010 after a four month slow-down over the winter season. This can be considered evidence that the first-time home buyer and repeat home buyer tax credit have sparked the real estate market. The credit's are set to expire on Friday, April 30th.

Sales numbers are expected to show an even greater increase in April due to a rush of buyer's hoping to take advantage of the credits before time expires. The Standard & Poor's index of 12 of the largest builders showed an increase in stock prices of 11%. The report also showed that previously-owned home sales rose 6.8% in March.

Hopefully, America can get the job market back on track to create more solid growth through 2010 and beyond. Overall, the housing market should stay active through the summer season, as traditionally it is the peak season for sales. The summer is ideal for moving weather conditions, as well as an easier transition for children entering new schools. There is a nice inventory out there and we have some of the lowest interest rates in history, so if you've been thinking about purchasing, there is no better time than now!

American Recovery & Reinvestment Act Credits and Incentives!

These are just a few of the credits detailed in the American Recovery and Reinvestment Act that you may not have known about! Claim yours if you're eligible!

Residential Energy Property Credit: This new law increases the energy tax credit for homeowner's who make energy efficient improvements to their existing homes. Improvements MUST be placed into service between 2009-2010 and the credit is for 30% of the cost of the improvement or $1,500 maximum.

Plug-In Electric Drive Vehicle Credit: This is for plug-in electric vehicles purchased after Dec. 31st 2009. To qualify, it must be newly purchased, have at least four wheels, have a gross vehicle weight of less than 14,000 pounds, and "draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity." The minimum amount of the credit is $2,500 and the maximum is $7,500. How much you get is dependent on the battery capacity.

Conversion Kits: This provides a tax credit for converting your motor vehicle to a plug-in drive vehicle. The credit is for 10% of the cost of the conversion and it must be placed in service after Feb. 17th, 2009 and before Dec. 31st, 2011. The max amount of the credit $4,000.

COBRA: This is an employer provided health insurance continuation subsidy for workers who involuntarily lost their jobs between Sept. 1st, 2008 and May 31st 2010. Eligible individuals must receive Trade Adjustment Assistance benefits or be between the ages of 55 and 65 and receive pension payments from the Pension Benefit Guaranty Corporation. The individual must also be enrolled in a qualified health plan.

There are several other credits, but these are just a few to wet your money saving appetites. Who doesn't like saving money? I don't know about you, but I HATE losing money. It's why I never gamble, play the lottery, or place bets. It stems from when I was about 8 years old and I went to see a movie with my grandparents at the movie theatre. We viewed the film, left the theatre, and got home only for me to realize I was missing my wallet. MY LIFE SAVINGS!

My sister always talks about stuff we did when we were little and I have no recollection of most of it. She has a great memory of the fun things we did and the big events we were a part of. My mind is just about blank when I try to recall the past. However, I do remember losing $64 in a grey and black smokey colored imitation leather wallet at a Cinemark movie theatre when I was 8 years, 3 months, and 17 days old in Spartanburg, South Carolina. Call me crazy, but that scarred me for life and I haven't lost a wallet since.

If anyone found that wallet almost 20 years ago, call the number in the side bar because I want my money back. Factoring inflation, which I calculated, $64 in 1991 is approximately $99.55 today. I expect that amount minus a reward of $3 for bringing it home to daddy. ANYWAYS, back to putting money in YOUR wallets. To make it REAL EASY for you, which is what I'm hired for, here is a "Tax Savings Tool" that can tell you if you qualify for an of the credits in the American Recovery and Reinvestment Act:

http://www.whitehouse.gov/recovery/tax-saving-tool

Information given is considered reliable, but not guaranteed and is subject to change. If you plan to take advantage of the credits offered please go to www.irs.gov to research further into eligibility requirements.

Tax Credit Coming To A Close...

In twelve days the deadline for the $8,000 first-time home buyer and $6,500 repeat home buyer tax credits will arrive. You must find a home and get a contract executed by midnight on April 30th to receive the credit, but have until June 30th to close on the home.

Anyone who hasn't owned a home in the past three years is considered a "first-time home buyer." Repeat home buyers do not have to sell their old home before purchasing, but you may not have a choice if you cannot qualify for two mortgages. To receive the credit, the new home does NOT have to be more expensive and you must have lived there for five consecutive years any time during the past eight years. Both credits require yearly income limits for eligibility of $125,000/year for singles and $225,000/year for marrieds filing jointly.

If you have any questions or want to see if you qualify for a loan, don't hesitate to call me today (512) 703-7416. There is still time to get a home. Once you find one that meets your needs, it will take about two days to negotiate and arrive at mutually agreed price and terms and get the contract "executed." That leaves you about 10 days from today to get something in. So "hur' up fo the hogs come'n get it!" Something grandma used to say on her farm growing up. I suppose it's application in this situation isn't exactly a bullseye, but the point is to hurry before some big hog comes out of the woods and eats up all the good properties!

In My Day, Tax Credits Were A Nickel!

When this first-time home buyer tax credit deal was first introduced in 2008 it was a $7,500 credit that had to be repaid starting in 2010, $500/year over 15 years and if you move early, you pay all that remained. It was for first-time home buyer's who bought between April 9th 2008 to July 1st 2009. I signed up for this credit and I don't regret that I did, but I think it is ludicrous that when they changed it to a higher amount of $8,000 AND non-repayable, that they didn't retroactively include the $7,500 credit to make it non-repayable as well. I am even more surprised that they didn't change it during the expansion. The old credit's original expiration deadline even OVERLAPPED with the new credit's start date (January 1st, 2009), albeit when the new credit was introduced the expiration for the $7,500 credit became December 31st 2008. This is crazy! They need to either make all of them repayable or none of the repayable. 

I know life's not fair, I realized this when my parents gave me a '92 Chevy Astro extended cab, black cargo van for my first car. It had a bare metal interior ceiling, sounded like an airplane taking off when you accelerated, the back bench folded flat into a bed, not even a tape deck, and the sliding door didn't open from the inside. This is what I had to drive around in high school. Big black vans that have no exit strategy from the inside are not exactly popular with the ladies in that particular period of life. You know how many girls I got? Zero. I would roll up next to a pretty girl and ask her if she'd ever been 0-60 in 33 seconds flat. I would tell her that we could go so fast her hair would whip in the breeze, but I'd have to have the AC on high at the same time or it wouldn't work.... something about aerodynamics. I'm no scientist. The only way I could have gotten girls in that van is if I painted "Free Puppies!" on the side of it. I would rather stand in my underwear and have a group of college cheerleaders point and laugh at me than to relive those moments again.

My point to all this is that Martin Luther King Jr. said, to summarize basically in a nut shell, that things need to be unequivocally balanced and fair. Giving Person 1 a lower amount that he has to return and Person 2 a higher amount that he doesn't have to return for the performance of the same action is undoubtedly unfair. No one has paid back any of the $7,500 yet, so it's a simple fix! But alas, it's the government and they aren't always fair. And hey, I'm lucky I got anything at all. This whole predicament takes me back to when I got my second car.... an eggplant purple '97 Chrysler Town & Country minivan. Upgrade! The ladies pursued like piranhas to fresh meat as I'm sure you can imagine.  

First-time & Repeat Home Buyer Tax Credits Expiring Soon!

In a little over 3 weeks the cut off for executing a contract for the tax credits will arrive. April 30th, 2010 at midnight marks the deadline that buyer's must finish initial price and terms negotiations and execute a contract. They then will have until June 30th 2010 to close on the property. There are two tax credits currently available:

- First-Time Home Buyer Tax Credit: Value of credit is $8,000 and does NOT have to be paid back. That is under the condition that the buyer must live in the home for 3 years or the full $8,000 must be repaid. To qualify as a "first-time home buyer" you must have not owned a home in the past 3 years. So, the term "first-time" is not literal.

- Repeat Home Buyer Tax Credit: Value of credit $6,500 and does NOT have to be paid back. That is also under the condition that the buyer must live in the home for 3 years or the full $6,500 must be repaid. You must have lived in your current home for 5 consecutive years anytime during the past 8 years. A common question is, "Does the new home have to be priced higher the your old one?" The answer is no. You also do NOT have to sell your old home before April 30th or June 30th, so don't panic. However, if you cannot qualify for two mortgages, you may not have a choice but to wait for your current home to sell.

In both cases to be eligible, the yearly income must not exceed $125,000/year for singles and $225,000 for married filing jointly. I have been asked many times if I think this will be extended for a second time. I do NOT believe this will be extended again. Last November, we found out about 3 weeks before the deadline that it would be extended and there was a great deal of chatter going on about the extension weeks prior to that. This time I haven't heard anything that would signal another extension. If you are planning to take advantage of this tremendous incentive contact me with any questions you may have. I'm always here to help.