There was a huge rush in Sept/October 2008 for 1st time home buyers to get the $8,000 2008 tax credit.  I predict it will be the same this time around, which means March and April should see an increase in sales.  This time around however, move-up buyers may get a tax credit as well. 

With rates at super low levels and prices at the bottom, I would recommend trying to buy from Nov-Feb to avoid the rush.  We experienced multiple offers in the Fall of 2008 on premium properties.  The same can happen, but possibly even with greater ...<< MORE >>

Thanks to Mike Fagan with PHH mortgage for all this great info:

Homebuyer Tax Credit Update!

On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time.

To learn what the new tax credit means to you and your clients, take a look at the concise overview below.

In addition, we’ve put together a script featuring wording you can cut and paste as needed to beat out your competition by connecting with clients who may be able to benefit from the new plan details!

TAX CREDIT OVERVIEW

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.
  
What is a Tax Credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTH Eligible to Receive?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fortFTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

• They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
• They do not use the home as your principal residence.
• They sell their home before the end of the year.
• They are a nonresident alien.
• They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

 

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

 

 

Michael Fagan

PHH Home Loans

10050 Baltimore National Pike

Ellicott City, MD21042

(410) 218-2030 o

(856) 917-2020 fax

        

The Associated Press released an article today stating the national averages show the Real Estate market has hit bottom and is slowly climbing from the bottom.  According to the article, the market has rebounded from a low in January to the most recent statistics of June.

January vs June:

Home Sales up 28%
Price up 10%
Sales up 3%
New Home Construction up 113%

They do warn that an increasing unemployment rate and quickly approaching deadline on the $8,000 first time home buyer credit could significantly slow the rebound.  All in all, these are good signs.

Article:  http://www.cnbc.com/id/32249022

        

Do I sound like a broken record or what?  The market appears to be bottoming out. 

http://news.yahoo.com/s/ap/20090428/ap_on_bi_ge/us_economy

        

Just want to give a quick note to our readers....my opinion on the current market is that we probably are at bottom.  Active inventory is starting to decrease and pending sales are increasing.  I think this is in large part due to low interest rates and low home prices.  Unfortunately, I don't think we'll see sizable appreciation at least for several years.  While this lack of appreciation isn't a selling point for buyers, the low interest rate potential for 30 years makes it an outstanding time to buy! 
...<< MORE >>

I came across this article and wanted to
let you know of some of the possible advantages to buying a home at
this time.  Prices are significantly low, interest rates are low and
sales have to started to pick up.  There is no way to know for sure, but
perhaps we could be at a bottom here or close to it. 

http://www.marketwatch.com/news/story

If you have any
questions, let me know.
...<< MORE >>

Recently we've seen a tremendous drop in rates.  Today, we are seeing 30 year fixed rates in the low 5.0-5.5% range.  If you have an existing loan, it is a great time to consider refinancing.  However, with the recent price drop in home values it would be smart to make sure you have enough equity in your home before paying any appraisal or loan fees.  If you need a free market analysis of your home, contact us anytime.

If you have been thinking about buying, these rates should been enough to encourage you to jump in.  Couple that with homes price back at 2004/2005 price levels, it certainly has become a much more attractive time to buy.

        

I came across this from a colleague and found it interesting.  Just as in Real Estate, generally the smart investors do the opposite of the market.  They buy when the market is low and sell when it is high.  With the stock market showing you its typical volatility we need to revisit our Real Estate investments.  Although Real Estate has been tough the last few years, it is still tangible and a necessity.  A piece of stock is not necessary.  You have to live somewhere. 

In addition, Real Estate is very slow moving.  This historical week shows you how crazy ...<< MORE >>

And the praise keeps coming.  Add all the great publicity and with BRAC jobs coming thru 2012, this maybe a great time to consider increasing your real estate portfolio in Central Maryland!

http://money.cnn.com/magazines/moneymag/bplive/2008/snapshots/PL2419125.html
...<< MORE >>

It has been a tumultuous week for Wall
Street but it seems that calmer heads have prevailed for the last
couple of days - let's all hope that trend continues. There has been a
lot of negative speculation regarding the financial health of any
company associated with the mortgage industry including most banks and
industry giants Fannie Mae and Freddie Mac. The failure of IndyMac
seems to have been the catalyst for the latest round of fears. The fear
that Fannie and Freddie are going to fail is, in my opinion, greatly
exaggerated. Unfortunately, once the rumors start, they can start to
become a self-fulfilling prophecy when ...<< MORE >>