Presented by: Todd Long New site Http://homeadvantagepartners.com
On November 6th the President signed a bill passed by the US Senate and House of Representatives extending the current First Time Home Buyers Tax Credit AND creating a tax credit for 2nd time and subsequent primary residence purchasers. The First Time Home Buyer credit has not changed except to be extended through the end of April 2010. Any home buyer qualified under this program and is under contract to buy a home by the end of April; closing by the end of June will be able to receive an $8,000 credit from the government.
The First Time Home Buyer Tax Credit in particular has really help stabilize our area home prices which fall into the typical First Time Home Buyer segment. For example, before the tax credit had been set at an $8,000 credit vs. the previous $7,500 government loan we had been seeing nearly a years worth of inventory in our market in the $100,000-$250,000 price range. That means that if the same number of buyers kept purchasing homes it would have take a year to sale every home in that market segment. That is assume no more homes came on the market, of course. At the end of October 2009 we see that segment at about 7 months of inventory which is very close to having a balanced market.
The NEW tax credit is for 2nd time and subsequent purchases available to individuals and couples who are buying a primary residence to replace the one they currently own. If you have lived in your current primary residence for 5 of the last 8 years and you meet the income limits you would be qualified to receive a $6,500 credit for a couple or $3,500 for an individual. The signing date of November 6th 2009 is significant because any qualified purchase after that date can file for the credit.
One interesting note is that the bill doesn’t seem to say you can’t rent your current home and then buy the new primary residence thereby waiting for a little better time to sale that home. There would be some tax consideration for doing or not doing this but it may be something to consider if you think you may want to be an investment property owner for a little while.
Also of interest, this is truly a CREDIT not a tax deduction. For example if you are due $1,000 back on your taxes at the end of the year and you qualified for the $6,500 credit, you would then receive a check for $7,500.
There are Income limits and home purchase limits with both of these credits. Both are fairly generous. You can not make over $125,000 Single, and $225,000 as a Married couple. The home purchase can not be over $800,000.
For additional information on this credit we have created a side by side comparison for you. Please do not hesitate to contact me if you have additional questions.
Coldwell Banker United Realtors
todd.long @ cbunited.com
I attended a technology conference this past weekend in the NODA area of Charlotte. I attended the same conference last year. This year was great as usual, and Free! If you have never attend a bar camp before here is a description from Charlotte Real Estate bar camp I helped organize earlier this year.
Below is a video from one of the presentations I found interesting at Bar Camp Charlotte this past weekend.
Coldwell Banker United, Realtors
Coldwell Banker Mooresville
I have created this video for you. Check it out.
You may have noticed I didn’t say extend the First Time Homebuyer tax credit. I really feel this needs to be expanded to anyone who wants to buy a primary residence. We have seen good, steady gains in selling the inventory in the first time home buyer sector through the $8000 credit this year. It hasn’t been a run on funds like the cash for clunkers which is probably good. The benefit has been there but people still have to have good credit and want to make a move to take advantage.
I have heard that extending this credit for 1 year and expanding it to all homebuyers who want to buy a primary residence would cost us about 1% of the 700 billion that has been set aside to help get out of this recession. This would be an appropriate move to solidify the housing market in a time of tough economics. I’ve been telling my agent for months if not a year now that it all goes back to jobs but when a house is sold that creates jobs as well. Bank personnel, plumbers, contractors, electricians, home inspectors, Realtors, movers, and on and on have a job because a house is sold.
If you are a Realtor please help NAR push for an extension of the tax credit by going to http://bit.ly/extendcredit. You will login with your NAR number and send a note to your local government representative.
I had a lot of questions in my office after my last FaceBook/Twitter post. Today I taught a fun Twitter class and below are a few notes I thought of relating to the subject on my way to the office today.
Enjoy the video.
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I use http://tweetgrid.com and Tweet Deck to monitor Twitter. One is totally web based and the other is a software download that is more expandable.
It probably won’t be very long before Realtors are no longer the keeper and sole distribution point of the information regarding real estate data. Remember the old MLS Books! Now those were the days when agents had full control of ALL the data. As a matter of fact before that the Agent who had the listing was the only person that knew about the house being for sale because there was no book to publish to the other agents. Now fast forward to a few years from now: Client will have full access to all listings, pendings, and SOLD property data. The question is what will they do with that information with out knowledge of the market, real estate cycles, marketing, staging, negotiating and so on? Watch this video for my thoughts.
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