Archive for First-Time Homebuyer
Don’t Miss Out | Existing Homeowners may qualify too!
Don’t Miss Out!
Some existing homeowners who purchase a replacement personal residence may qualify for a tax credit as well. Here’s a link to a guide that can help you determine if you qualify or not. Timing is crucial and of course, check with your tax advisor for complete details. This eligibility test works for either existing homeowners or first time homebuyers.
Tax credit timing: You must be in a contract by 4/30/2010 and close by 6/30/2010 to qualify. We are not anticipating this credit to be extended. The industry leaders that worked so hard to accomplish getting this credit passed, have publicly stated that they will not be asking for more.
If you’re interested in buying, time is running out; you need to get into the market sooner rather than later. I specialize in residential real estate in Corvallis, Albany, Philomath, Lebanon and surrounding areas of the mid-Willamette Valley in Oregon. I’d be happy to help you work your way through the process.
Check to see if you qualify for a home buyer tax credit (first time or current homeowner)
Note: Test provided by Alishia Jones, Mortgage Loan Officer, Bank of America, Corvallis, Oregon.
Expanded and Extended Tax Credit Information–From the Expert
Questions and Answers from the Expert about the Expanded and Extended Tax Credit
Sellers and Buyers in and around the Corvallis and Albany, Oregon real estate markets can benefit from a clear understanding of the opportunities the Expanded/Extended Home Buyer Tax Credit provides.
An excellent source for answers to questions you may have about the expanded and extended tax credit for First Time Home Buyers and Long Time Home Owners that are thinking of making a change can be found at the Q & A page for the I.R.S. The ultimate resource for information about taxes, tax credits and all other information that relates to the Expanded and Extended Tax Credit for buying a home.
It is possible to have parent (or other family members) assist in the purchase and still be eligible for credits.
If you are currently a homeowner and meet the other requirements, you do not have to sell your existing home (you could rent it out), but you do have to occupy the newly acquired home and meet all the other requirements.
You do not have to “buy up” or, in other words pay more for the new house.
Read the Questions and Answers about the tax credit for Home Buyers. This is truly a limited time opportunity.
I.R.S. Information about the Expanded and Extended Tax Credit
As always, seek the advice of a qualified tax advisor if you have questions about tax laws and how they pertain to personal circumstances.
Coming Soon | 3 Bedrooms | 2.5 Baths | $257,000
I have a new listing coming on the market very shortly and just wanted to let everyone know about it before it gets here!
Spacious and clean Philomath home with amazing views of Mary’s Peak and the rest of the Coast Range. Landscaped yard with underground automatic sprinklers and trickling stream water feature. Large open living area with westward facing balcony to take advantage of those wonderful views! 3 bedrooms, 2.5 baths, approximately 1843 sq. ft. on .38 acres. Take advantage of the extended first time home buyer/expanded buyer tax credit.
Located just of west of Corvallis and easy commute to Corvallis employment, including Oregon State University)
Home Buyer Tax Credit De-Mystified
The extended/expanded tax credit is getting a lot of press and a great deal of mis-information is being spread around. Here’s a Questions and Answer Session provided by the National Association of REALTORS® that may help provide some clarity.
NAR Frequently Asked Questions Homebuyer Tax Credit Changes
National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
The following are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit.
Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.
Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.
Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phaseout range).
Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.
Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.
Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30.
If you are thinking of buying or selling a home in Corvallis, Oregon or the surrounding cities of Albany, Philomath or Lebanon or anywhere in the Mid-Willamette Valley. I’m here to help.
As I’ve said before and will no-doubt say again, if you want expert advice about the 2009 Tax Credit, or the Expanded/Extended Tax Credit, consult with a qualified, tax expert. Typcially a real estate agent and/or mortgage lender do not have that expertise.
House of Representatives Approves Tax Credit | Bill Signed by President
Update: Bill signed into law by President Obama this morning. 11/06/2009
Now, it’s on to President Obama for signature in the next few days.
Here’s a chart of the differences between the existing tax credit and the revised (primarily there’s provisions not just for First Time Homebuyers but also for those that have owned a home and are purchasing a replacement property.) There are many fine points to the changed tax rules. It is in your best interest to get advice from qualified tax professionals and understanding your options in relation to these “new” tax guidelines.
The Home-buyer Credit is an amendment (S. A. 2712) to the Unemployment Compensation Extension Act (H.R. 3548)
(click on chart for a larger view or use your zoom tool on your browser)
This should prove to be very helpful for buyers and sellers in the Corvallis, Oregon and surrounding markets of Albany, Oregon; Philomath, Oregon; Lebanaon, Oregon and Linn and Benton County by creting movement throughout the market, not just in the “first time homebuyer” segment.
Senate Passes Homebuyer Tax Credit…
Today the US Senate passed the Homebuyer Tax Credit witha 98 to 0 vote. The credit is included in the Unemployment Bill. In order for it to be effective The house must still pass this legislation and then President Obama must sign it into law. It is generally expected to be to The President by the end of the week.
In essence, the bill extends the $8,000 first-time homebuyer credit through April 30, 2010 and provides a $6,500 credit to new purchasers who have lived in their current residence for five or more years.
In Corvallis, Albany and Philomath, this should help create movement in the housing market by assisting the mid-range of the market to move-up into the currently slow upper range; assisting owners of lower cost “entry level” homes to move into the mid-range; thus, freeing up entry level housing for first time homebuyers.
Exciting news for the real estate industry in Oregon; and good news for buyers and sellers in Corvallis, Albany and the surrounding communities in the Willamette Valley of Oregon.
The extension was expected in late October, but has been slow in coming…
“People are going to wonder, how is it, that something that is just common sense and fairness should take so long to make its way through the United States Congress,”‘ Oregon Sen. Ron Wyden said after the vote.
Key Provisions of the Bill Follow (Provided by Teresa “Terry” Estergard, Wells Fargo Bank):
HOMEBUYER TAX CREDIT SUMMARY
S.A. 2712 would:
- Extend through April 30, 2010 the tax credit for first-time homebuyers (up to $8,000 or up to 10 percent of the purchase price of the residence), allowing 60 days to close, provided that the homes are under a binding contract by that date;
- Provide homebuyer tax credit of up to $6,500 to owners who have been in the same principal residence for five consecutive years during the previous eight years;
- Increase the income limitations to $125,000 for individuals and $225,000 for joint filers;
- Phase out the credit for individuals with incomes above $125,000 for individuals and $225,000 for joint filers at the same rate as current law (over the next $20,000);
- Limit the credit to purchases of principal residences equal to or less than $800,000;
- Eliminate the 36-month recapture requirement for military personnel, including members of the Foreign Service and intelligence community, forced to sell as a result of an official extended duty of service; and
Extend the tax credit for one year for military personnel serving outside the United States for at least 90 days in 2009 or 2010. - S.A. 2712 would also include anti-fraud language. The measure would not extend the credit to taxpayers under the age of 18 on the date of purchase unless that person is married to a taxpayer above the age of 18. The amendment would also require a properly executed copy of the settlement statement to be attached to the tax return. Moreover, the substitute would expand the restriction on a residence acquired from a family member to include a residence acquired from a spouse’s family member.
- S.A. 2712 would also extend math and clerical error authority to the Internal Revenue Service.
Breaking News | First Time Homebuyers and others
There was a lot of chatter on the news (and real estate blog sites and on-line news posts) yesterday and this morning about extending and possibly expanding the (first time home buyer) tax credit. Most news reports did not make it clear that the agreement reached by Senate leadership has not found its way into an existing bill or a stand alone bill. That may be resolved today. Once a bill passes the Senate, it still must go to the House for concurrence; and then has to be signed into law by the President. In other words, any action has a long way to go before it becomes law. The action in the Senate yesterday was good news and significant; however, this is not yet a done deal. If you support extending and/or expanding the tax credit, now is the time to contact your senators and congressmen to let them know how you feel.
A side note: Jobs are important; statistically every home transaction brings into the local community approximately $63,000. That movement of money can help improve the local economy.
Agree or disagree, this is an important issue for Real Estate Agents and those concerned with the Corvallis, Albany and Mid-Willamette Valley market.
If some form of this bill passes, I would expect to see some movement of Buyers and Sellers in the Corvallis, Oregon and Albany, Oregon markets. More first-time home buyers will have time to enter the market, and the move-up buyer will be in a better position to purchase in the Luxury Home Market; creating demand at all levels.
To get in touch with (or find out who they are) your elected officials you may want to visit Senate.gov or your Congressman at House.gov
Related articles:
Corvallis and Albany Coldwell Banker Valley Brokers Open Houses | October 4, 2009
Coldwell Banker Valley Brokers will be holding the following properties open from 1:00pm until 4:00pm on Sunday, October 4th. Please join us.
2482 NW Woodcrest Ave NW, Albany, Oregon $250,000
Well kept home in North Albany, 4 bedrooms, 2.5 baths, 2002+/- sq. ft. on nearly one-half acre in North Albany. View property with RV space. MLS 611961
2765 NW Orchard Heights NW, Albany, Oregon $325,000
Newer home (built in 1998 and well cared for), in North Albany, 4 bedrooms 2,5 baths, 2730+/- sq. ft. .21 acre lot, open floor plan, RV parking. MLS 605359
2006 NW Morning Glory, Corvallis $232,000
Easy living 3 bedrooms, 2.5 baths attached home, near city park. First time home buyer opportunity (there’s still time to take advantage of the first time homebuyer tax credit) or a great investment property. MLS 616575
7241 NW Madrone Way, Corvallis, Oregon $379,000
4+ bedrooms, 2.5 baths, 2616+/- sq. ft., theater room, family room, large shop, attached two car garage, open lot with garden space & RV parking. MLS 614222
1745 NW Locust St, Corvallis $254,000
3 bedrooms, 1.5 baths, single level1398+/- sq.ft., shop/studio, .24 acres, centrally located. MLS 610576
33585 SE Shoreline Drive, Corvallis $439,900
5 bedrooms, 3 baths, 3456+/- sq. ft., bonus room, luxurious master suite with double fireplace, community pool and fitness center MLS 612720
Attention: First-Time Home Buyer $8,000 Tax Credit Expires 12/01/2009
If you can close escrow on a home prior to December 1, 2009, you may be entitled to an $8,000 tax credit. This amendment to the economic stimulus bill will be available to you if you purchase your first home between 1/1/2009 and 12/1/2009. Home buyers will be entitled to claim a total tax credit of $8,000 or 10% of the purchase price, whichever is less. To avoid possible abuse of this credit, it is only allowed for your primary residence and will only have to be re-paid if said house is sold within three years of purchase. Keep in mind that you must close before December 1, 2009 to be eligible for credit. Most closings take about sixty days, so with that in mind you should go under contract by October 2nd, 2009 — not really all that much time to find your first home. One interesting thing to note: even if you’ve owned a home before, but have not owned in the last 3 years, you may qualify. If you can meet these deadlines, all you have to do to claim your credit is fill out I.R.S. Form 5405.
For more information about this credit go to the IRS website.
For a summary of the “First Time Home Buyer Tax Credit” review this pamphlet provided by the National Association of Realtors®
If You Are Buying Now, Know These Ins-And-Outs To Get The Most For Your Money
If you are in the enviable position right now of looking to buy a home, enjoy the current market: the buyer’s market! Many folks that have to sell their homes right now are happy to start a dialogue with a potential buyer, so arm yourself with any and all information to get the best deal possible!
- Right now you have more time to look, so you will be better armed with the knowledge of which houses have been sitting on the market for a while. These homeowners might be more likely to negotiate.
- Consider looking at new construction. Builders sometimes offer incentives and sometimes have very attractive financing programs.
- In certain areas that have been hit a bit harder by the market downturn, you certainly do have the upper hand whilst negotiating – and can always ask for an upgrade or a major repair before finalizing the deal. More important, know the market! Get information on what’s happening now. I can say with some certainty, the Corvallis Market has been less impacted than one might believe.
- Some buyers are asking for a written warranty on appliances and certain structural repairs. Down the road this could be a big money-saver for you. Coldwell Banker and American Home Shield provide a product that not only protects the buyer for the first year of homeownership, it covers the seller too! Asking for a warranty early in the transaction can help with inspection related items.
- Motivated sellers are more likely to work with your timeline. Don’t be afraid to ask if the closing can be pushed out. But, remember, pushing out the closing can also create issues for a buyer. Think about interest rate lock expiration dates and the fact that the longer closing is going to cost the seller (especially if the house is vacant or in default)
- Even some lenders are willing to negotiate. The lending business is competitive. Compare lenders, not just interest rates, but fees as well. Find out if the lender with the best rates and fees also has a track record of delivering… Reputation is very important. And, today, the appraisal environment can be problematic. Find out how long that part of the process is taking.
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