The Oregon Association of Realtors Reports the Following as of Today (07-01-2010):

Congress Extends Closing Deadline for Homebuyer Tax Credit 
After a close encounter with the deadline, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline last night. The extension applies only to transactions that have approved contracts in place as of April 30, 2010 and have not yet closed. The legislation should create a seamless extension and the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30, 2010 and the date the President signs the bill into law.

It’s important to note that this does not extend in any way the time frame for buyer’s to make a contract or get into one. It helps the approximately 180,000 individuals that have already entered into binding agreements as of April 30th and have not been able to finalize their transactions–this is espeically true for those that are involved in Short Sale transactions or are bogged down in the lending process.

National Flood Insurance Extended

Last night, the Senate also passed the National Flood Insurance Program Extension Act of 2010, which extends flood insurance until September 30, 2010, and will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date the extension is enacted.

Hopefully, before September 30th, they’ll come up with a more permanent solution. The lack of flood insurance creates instablility in the market and is potentially damaging to many homeowners.

SOLD!

HOME FOR SALE — 550 NW Witham Drive, Corvallis, Oregon

Solid single level in great location just blocks from Oregon State University and with easy access to downtown Corvallis. Great floor plan with separate family room that opens out to backyard. Kitchen and dining area combo has large windows, neutral counter-tops and  new vinyl flooring. Overall the feel is light and bright. Wood burning fireplace in living room. Generous use of wood floors in bedrooms and living room. Large .23 acre lot with established landscaping, sprinkler system, and wide paved side yard. 3 bedrooms, 1.5 baths, approximately 1,327 sq. ft.

Solid single level home located just blocks from the Oregon State University campus is perfect for Beaver fans, and is a great buy for investors, first time home buyers, or those down sizing. The count down is on for home buyers who are eligible for federal tax credits. Take advantage of other local amenities like the Benton County Fairgrounds, local parks, hiking and biking trails, and Irish Bend Covered Bridge and enjoy easy access to shopping and downtown Corvallis.

Open floor plan feels spacious and bright. Kitchen and dining area have large windows, neutral countertops, and new vinyl flooring. Living room is warm and cozy with wood fireplace with stone hearth and large windows to bring in the natural light. The family room is a great multipurpose area for play, tv, crafts, office space or you decide; complete with new carpet, large windows, and access to patio and backyard.

Master bedroom is light and bright with hardwood floors and large window. Attached half bathroom connects to the main bathroom allowing the master bedroom access to the shower and bathtub.

Enjoy outdoor spaces with paved side yard and large backyard with patio. Large nearly quarter acre lot is big enough for gardening, play structures, or other backyard dreams. Complete with sprinkler irrigation system to keep established landscaping green and lush year round.

Other amenities include:
•    Attached 2 car garage with laundry facilities
•    Air conditioning and gas forced air
•    2 additional bedrooms
•    Generous use of hardwood flooring
•    Approximately 1,327 sq. ft.
•    .23 acre lot

*This property was staged at no additional expense to the seller.

Related links to the extended home buyer tax credit:

Home Buyer Tax Credit De-Mystified

Expanded and Extended Tax Credit Information

Search for more homes for sale in Corvallis here.

Money Matters

• Federal Housing Administration (FHA) is rolling out new guidelines soon (April) for their loan programs, increasing the up-front Mortgage Insurance Premium (MIP) to 2.25% (currently at 1.75%).  For every $10,000 in loan amount, this translates to a cost of $50.00 extra in closing costs.  For example, if you were to borrow $200,000 the additional cost would be $1,000.
• FHA is also reducing the amount that a seller can contribute toward closing costs from up to 6% of the purchase price to 3%.
• The first time homebuyer credit is expiring soon as well.  April 30th is the deadline for a written contract to be in place; June 30th is the last date for that contract to close.
• Attention existing homeowners; you too may be entitled to a tax credit.  There are many out there that are unaware that if you purchase a replacement primary residence (in contract by April 30th, Closed by June 30th) you may qualify for a $6,500 tax credit.

(Certain conditions apply for transactions to be eligible for tax credits—check this web site: http://www.homebuyertaxcredit.com/  and get advice from your professional tax advisor)

Five things I’m looking forward to in 2010 and Change in the Corvallis Real Estate Market

As 2009 comes to a close, it will be nice to put a cap on it and move onto a better 2010.  I, for one, am looking forward to some positives in the economy and the Corvallis real estate market.  Recent economic activity would lead one to believe that the country is coming out of an extremely difficult economic period — some say the longest recession in decades.

What I think we’ll see in the coming new year:

1. Slightly higher, but still very appealing interest rate environment, at least for the first half of the year.  Not the really extra-ordinary rates hovering at five or slightly under, but more like the low sixes, which historically (and if you can remember the early 1980s really very much better than seventeen percent or higher.)

2. Buyers, both first time and move (up,over,down) buyers taking advantage of tax incentives (written contract must be in place by 4/30/2010; closing by 6/30/2010)

3. Locally good levels of inventory without the impact of extreme high levels of foreclosed properties. Basically, a more balanced market.  Making it a better market for everyone.  As the markets that tend to feed Corvallis and the mid-Willamette Valley continue their recovery they will provide a little “stimulus” to our economy.

4. Better employment rates as the economy crawls out of the recession hole.  Employment is the one factor that will really change the course of the current economy.

5. Along with higher interest rates, may come a more relaxed, perhaps I should say, sound, approach to underwriting.  Not the take a pulse, give a loan attitude that helped create the mess, but realistic and reasonable, as banks re-enter the mortgage business and become less fearful of risk.

All in all, no matter what the economy does, how the real estate industry deals with ups and down, we are all just and we will continue to adjust and do what we need to do to live our lives the best way we can.

Wishing you all a happy, healthy and prosperous 2010.

Related posts:

Questions and Answers about the Expanded/Extended HomebuyerTax Credit

Homebuyer Tax Credit De-Mystified

Richard Smith CEO of Realogy on CNBC about the Tax Credit

How Would You Spend Your Tax Credit?

COLDWELL BANKER REAL ESTATE STUDY FINDS CONSUMERS’ ANTICIPATED ‘SMART SPENDING’ OF HOMEBUYER TAX CREDIT WILL AID ECONOMIC RECOVERY

83 Percent of Current Homeowners Surveyed Say They Would Spend Tax Credit on Repaying Existing Debts, Home Improvements, Savings/Investments and Household Expenses

Coldwell Banker Real Estate LLC today announced the findings from a new survey that looked at how the recently expanded federal homebuyer tax credit, which opened up the credit to existing homeowners, might impact the economy.  Of the more than 1,000 homeowners surveyed, 83 percent responded that if they were to purchase a home and qualify for the tax credit, they would engage in “smart spending” or put the money toward paying off existing debts, home improvements, savings/investments, or everyday household expenses.  Only 6 percent of respondents indicated that they would spend the money on what are commonly referred to as luxury items such as a vacation or a shopping spree.

According to the survey, the top way homeowners would spend their $6,500 tax credit in a “smart” way would be to pay off debts (34 percent), followed closely by making home improvements (29 percent) and putting it into savings and investments (28 percent).

In addition, Coldwell Banker Real Estate found that 20 percent of homeowners indicated they were more likely to consider purchasing a home than they were six months ago, after learning about the $6,500 federal tax credit. The tax credit, which previously only was for first-time homebuyers, is now available to existing homeowners who sign a binding contract before April 30, 2010 and close on the purchase of a home before June 30, 2010. To learn more about the details of the expanded homebuyer tax credit, go to www.coldwellbanker.com

If you’re considering purchasing a home in Corvallis, Albany, Lebanon or Philomath (and surrounding areas of the mid-Willamette Valley); I’d like to help you meet your goals.  I work with buyers and sellers at all price levels. Please get in touch and we can get started today.

Other resources for information about the tax credit:

National Association of Realtors frequently asked questions about the tax credit

I.R.S. information abut the tax credit

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.

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)

Richard Smith checks in with CNBC regarding the current condition of the real estate market, projections about the economy and mortgage interest rates, the condition of FHA (Federal Housing Administration). A very insightful and calm discussion about the anticipated response to the tax credit extension/expansion.

Richard Smith is CEO of Realogy (parent to Coldwell Banker Corporation and others) and the world’s largest brokerage operator.

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.

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.