Home Purchase Tax Credit

The Internal Revenue Service has answered a couple of questions regarding documentation required to secure the first-time and move-up home buying tax credits. It is not common in all areas of the country to have seller and buyer signatures on the  HUD-1 form. 

The IRS clarifications says: “In areas where signatures are not required on the settlement document, the IRS will accept a settlement statement if it is completed and valid according to local law. The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.” 

Move-up buyers must provide documentation that shows they lived in their previous property five of the eight past years. This proof can be home owner insurance records, mortgage interest statements or property tax records.

The tax credit program is set to expire the end of April. Properties need to be under contract by April 30 and close no more than 60 days later. The first-time buyer credit is $8000.00 and move-up buyers recieve a $6,500.00 credit. There is “noise” today in Congress by some that want to extend these programs beyond their current expiration date.

Real Estate Headlines

My thoughts about today’s headlines in the real estate world.   Secure a Lender Quickly for Tax Credit Those house hunters looking to take advantage of the home buyer tax credit need to line up financing from lenders who work in a timely manner. My thought. This is probably a good idea. BUT, it is always a good idea, tax credit or no tax credit. Information learned from good financial counseling is invaluable in negotiating for property! Shadow Inventory Unlikely to Hurt Market Experts believe that strong investor demand for foreclosures will keep prices from falling more. My thought. By “shadow,” this writer means foreclosed! The idea that investors are licking their chops to purchase foreclosed real estate is stretching what we see in our market place! Buyer types are not usually the first consideration of a Seller when placing property on the market. Any way you cut it, all proerty, forclosed or otherwise, that is for sale at the same time as yours, is competition. A Seller should be mindful of any and all! Analyst Predicts Improvement in Home Building Dan Oppenheim, a home building analyst with Credit Suisse, believes 2010 will be a good year for building, though there are still strong threats to the housing recovery. My thought. This is one man’s opinion and there are as many oopinions available as there are people who will give one! For my building industry friends, I want this guy to be right. This might be one comback it would be safer to be “part of” rather than “lead.”   Any thoughts?

Five Reasons to Sell Now

 Selling a property in this tough market can seem like a challenge. Here are five factors that actually make this a good time to post a For-Sale sign.

Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape. Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.

Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash. Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business. Interest rates would very well begin inching up as the end of next month approaches and brings with it the central bank scaling back its purchases of mortgage-backed securities

Source: McClatchy Tribune, Kate Forgach (02/07/2010); Terry Jacobs

What Are Your Plans?

The Wednesday morning edition of the Kerrville Daily Times, www.dailytimes.com, has a small block given to asking readers to let the paper know what they think they might do in a market like today’s? Buy, sell, rent? Of course, the reader’s who respond are left to their own perceptions as to what market conditions exist and I think it would be impossible to draw any scientific conclusions. None the less, the results, when and if they are published will be very revealing for those of us “in” the business. I would expect a better approach to getting out the word about real estate market conditions in our own area (real estate is local, after all) to be the number one lesson drawn from the results. Following closely will probably be the exposing of a large group of frustrated would be buyers who are not feeling the love of the local market prices as noted in national news media outlets. Values have dropped! But not at a west coast pace; and, while the tax credit is extended both time wise and in inclusiveness, the difficult maneuvering through a more complicated financing process still confronts would be homeowners and investors alike.

Seems to me this adds more impetus to seeking out the services of a true real estate professional. Sellers and buyers are both entitles to and should seek the benefits of representation when it comes to their dealing in today’s market place.

Would anyone care to post a response to the questions posed in today’s Daily Times and add comments? I would love to have direct input from you and offer help if you like.

FHA Relaxes Anti-Flipping Rule

Beginning Feb. 1, the Federal Housing Administration will provide mortgage insurance for some purchases in which the seller bought the property and held it for fewer than 90 days.
The agency is changing what is known as the “anti-flipping rule” to speed up sales of renovated homes in communities with too many bank-owned and foreclosed homes, says FHA Commissioner David H. Stevens.
Waiving the 90-day rule will encourage private investors to buy vacant properties, fix them up, and quickly sell them to buyers who will be eligible to buy them using FHA financing.

Source: Washington Post (01/30/2010)