You are currently browsing the tag archive for the ‘8000 tax credit’ tag.

All the talk among Realtor’s, Mortgage Brokers, Investor’s and first time home buyers is about whether or not the first time home buyer $8,000 tax credit will be extened past May 1, 2010.  Everyone working in Real Estate has enjoyed the surge of sales this tax credit has provided during the past several months. 

It appears certain that the $8,000 First Time Home Buyers tax credit will not be extended past May 1, 2010.  Everyone is wondering what the impact will be while enjoying the final surge of people buying during this last week of April.  Mortgage Brokers and Realtor’s are secretly asking one another what will happen next to the real estate market. 

I am an investor and from my perspective we are still working right in the heart of the Perfect Storm caused by the glut of distressed properties on the market.  Never before has there been such a transfer of real estate wealth caused by the greed of Wall Street.  Today’s home buyers can purchase property as if shopping at Macy’s inventory reduction sale.  Just like finding your favorite clothes marked down 30%, homes can readily be purchased at sharp discounts in most markets across America.   I expect to continue to see some strong movement in the real estate market for the coming months due to the incredible deals that are readily available to home buyers.

The second reason I believe the market will stay strong for several months is the second condition of this perfect storm.  Very low interest rates.  With decent credit home buyers are still financing homes with interest rates in the low 5% range.  In fact we have a closing on a home that was purchased from us scheduled to close may 7th and the borrower qualified for a rate of 4-1/8%.  The very low interest rates will not last forever and the fact is they worth far more than the $8,000 tax credit, assuming the average American spends the $8,000 and does not re-invest it for a profit over the next 15 years.

The third reason I believe the market will stay strong for a while is the wide availability of grants.  In Virginia where I live, and in many states across our nation there are many grants still available to first time home buyers.  We recently sold another home in Virginia where the borrower qualified for a $10,000 grant.  Again, that grant exceeds to return of the $8,000 tax credit.

The good news is that I believe homes will continue to sell for the next several months.  The key to your sales is the same as always:

1.  Property condition:  There are a lot of homes still on the market; to make yours stand out from the others be sure it is 100% clean, clutter free and well maintained inside and outside.  Be sure the outdoor space is appealing with a well cut lawn, mulched flower beds and trimmed bushes.

2.  Marketing:  The majority of home buyers begin their search on-line.  Be sure that your home is marketed heavily on the internet.  You should be sure to have your home listed onto the MLS either list it yourself with a great flat fee MLS listing service such as http://www.justlistem.com or find a strong realtor.  Your home should be listed on craigslist, zillow and trulia along with the MLS.  In addition to internet marketing and the MLS, be sure you have a property flyer along side a great for sale sign that is easily read when people are driving by your home.

3.  Price:  In this market you need to consider your listing price carefully.  Take time to review the comparables of recent homes sold in your neighborhood, speak to a strong Realtor or simply have it appraised.  You will want to price your home competetively and be sure to offer the new Buyer assistance with their closing costs to make it easy for them to purchase your home.

Sit back, relax and enjoy this perfect storm.  There should continue to be strong sales for the next several months due to low interest rates, readily available grant funds and the continued great opportunities to buy.

What do you think the impact of no longer having the $8,000 first time home buyers tax rebate will be?  Leave me your opinions in the comments.  I would love to know your thoughts.

In November 2009 President Obama has signed the extension of the first time home buyers $8,000 tax rebate. President Obama also has signed an expansion of the original plan. The expansion provides a $6,500 tax rebate for qualified buyers who already own their own home. Both will be in effect until April 30, 2010. The provisions are providing a tremendous opportunity for homeowners as a huge incentive for buying a home. The new extension and expansion has created a sense of urgency for those buying homes. According to Mark Sauers, Assistant Vice President with Sun Trust Mortgage

“The only thing i would say is that if history teaches us any lessons we should move forward sooner rather than later. April 30 will be here before we know it. I really do not expect any further extensions beyond this”

The following guide will simplify the qualification process for homeowners looking to take advantage of the home buyer tax credit.

    $6,500 Tax Credit for trade-up buyers who already own their own home:

1. Income qualifications: Single taxpayer incomes must not exceed $125,000 and married couples income can not exceed $225,000

2. Purchase date qualifications: Purchase must be after November 6, 2009 and on or before April 30, 2010.

3. Ownership qualification: Buyers must have lived in their previous home for five consecutive out of the past eight years. The purchase price of the new home can not exceed $800,000 and the new home must be a personal residence (non investment or non-owner occupied).

The total tax rebate is equal to 10% of the purchase price, up to a total of $6,500 and does not need to be repaid back to the Government.

    $8,000 First time home buyer tax credit:

1. Income qualification: Single tax payer income can not exceed $125,000 and couples filing jointly can not exceed $225,000

2. Purchase date qualification: All sales that occur between January 1, 2009 and April 30, 2010

3. Buyer qualification: Anyone who has not owned their own home during the previous three years prior to current purchase

The tax rebate is available for 10% of the purchase price of the home with a maximum of $8,000 and can not be used on a home that is over $800,000. Really now, how many first time home buyers can afford an $800,000 home?

first time home buyers rebate expanded and extendedPresident Obama has signed the bill to extend and expand the home buyer tax rebate.  First time home buyers have been enjoying the $8,000 tax credit since it was signed in early 2009.  The first time home buyers tax rebate was set to expire on November 30, 2009 but now it has been extended to all houses put under contract before April 30, 2010.

Along with the extension President Obama signed an expansion of the original tax credit.  The expansion allows many homeowners, who purchase a new primary residence home, to enjoy a $6,500 refund.  Homeowners are eligible for the $6,500 if they have lived in their home for five consecutive years out of the past eight years.   The earnings income limit for receiving the tax credit are $125,000 for individual and $225,000 for a couple.  The new purchase does not need to cost more than the original purchase and here is an example of how the 5 out 8 consecutive year residency should apply:

Renting scenario:  If you previously owned your home for the five consecutive of previous 8 years, then sold it and chose to rent a different home you would become eligible to purchase a home and receive the rebate. Please contact your cpa or tax specialist to be certain of your situation.

Divorce scenario:  If you and your spouse lived together for five consecutive out of the past eight years, got divorced and went your own paths but did not repurchase a new home you would then potentially be eligible for the $6,500 tax credit.  Please be sure to contact your cpa or tax specialist to be certain of your situation.

It is estimated that approximately 2 million home buyers will take advantage of the tax rebate this year and that this tax credit could pump more than $20 Billion into our general economy.  The hopes of our Government leaders is that it will ultimately lead to a sharp rise in home sales and ultimately help lead to a stabilization in the overall market and economy.

Extending the tax rebate will help to continue to give a great incentive to first time home buyers nationwide.  The expansion is expected to lead to greater sales in the “Trade-up” category where home owners move up to a more expensive home to take advantage of this offer.

Jim Ingersoll

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 11 other followers

Twitter Feed

Blog Stats - Thanks for checking out our blog.

  • 15,866 hits

Top Clicks

  • None

Investing Now is a market relevant site for Real Estate today