Calling All First Time Home Buyers! Now is the Time to Buy!

Calling All First-Time Home Buyers! Now is the Time to Buy!

Everyone in the country is wondering how Obama's tax stimulus bill afftects them. One of the ways to stimulate the economy is to get first time homebuyers "off the fence." Every time a new home is purchased, numerous vendors end up with business. The new homeowner needs furniture. They often want to decorate and make the home "theirs"- hence new paint, new curtains, new flooring, plants for outside- you name it.

The first time homebuyer credit will help with that!

The number of first time buyers has increased each year since 2006, rising from 36% to 41% last year according to the National Association of Realtors. As home prices have fallen significantly since "the peak" and interest rates are near all time lows, for many, there has never been a better time to purchase a home.

However, with the current economy, many prospective buyers may be reluctant to pull the trigger. Home prices though, on a national level, are down 20% to 30% depending on the resource offering the information. Locally, greater opportunities may exist.

Personally, I have a buyer currently in escrow on a home for $310,000. Three and four years ago we were looking at homes which were priced at $450-475,000. Not a one of them was a place you would want to put your dog in! He gave up. The home he is currently buying is a BEAUTY! 4 bedroom, 2,400 square feet, lovely ammenities, nice neighborhood, beautiful finished backyard...... This home would have sold well into the $600's then. He is thrilled! He never imagined that his first purchase would look like this!

The collapse of the housing market has made it possible for Pavel to own a gorgeous home! Now, on top of this- he will have an $8,000 tax credit when he files his 2009 taxes!

For qualifying first-time home buyers, the American Recovery and Reinvestment Act of 2009 amends the $7,500 tax credit. The credit has now been changed in two significant ways. The first is that the potential amount of the credit has been increased to $8,000.

The second change, which is very beneficial, is that where previously the credit had to be repaid to the IRS over a period of up to 15 years, it now does not as long as the homeowners live in the property for at least 3 years. A tax credit is a direct reduction to an income tax liability. It also allows for any amount that exceeds that liability to be paid directly to you. Example, someone has a tax liability of $4,000. They would then receive a refund of $4,000 if the credit they were eligible for was $8,000.

To read more about how the tax credit could impact you or someone you know, the National Association of Home Builders has constructed a website that goes into all the details of the credit which can be seen at www.federalhousingtaxcredit.com.

Meanwhile- if you- or someone you know has been talking about buying, and hasn't- have them give me a call. We can see what they qualify for and help them to achieve the American Dream of home ownership!

Could A Homebuyers Tax Credit Be In Our Future?

I am often getting asked if and when it is a good time to "jump in" and buy Real Estate. Read the following article- if you don't think the great prices on property are enough to entice you, perhaps a "buyer's tax credit" would be the topping on the cake!

Calls Growing Louder For A Homebuyers Tax Credit..........

because prices are more realistic and waiting until Congress does anything may waste a golden opportunity for savings. This theory of "buy now vs. later" involves the savings on interest should you wait to purchase when rates go up, as well as missing out on the perfect home you may find.

The National Association of REALTORS® testified recently that a temporary tax credit would be the best incentive to move hesitant home buyers into the market. NAR based its support on the success of a 1975 temporary tax credit designed to "clear an over-supply of newly constructed homes during an economic downturn."

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, a NAR Official. Testifying for NAR, Helsel noted “three critical features for an optimal home buyer tax credit.” The credit should apply to all residential real estate, not solely foreclosed properties; it should be temporary and only apply for a short period of time; and it should provide higher income limits than those the House has imposed, particularly for single individuals. “If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but it could also expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

Another result of more homes being sold would be the economic stimulus. The average household will spend more money right after move-in than in any other time-frame in homeownership. From remodeling the new home to buying new appliances, homeowners still drive the economy.

Another organization with a vested interest is the National Association of Home Builders (NAHB). In 1975, when there was almost a three-year supply of vacant houses on hand, lawmakers approved a $6,000 credit spread over three annual installments of $2,000 per year.

According to the NAHB, that carrot brought enough buyers into the market that builders and their subcontractors were able to get back to work. Inventories fell and production doubled, taking the pressure off of housing prices.
This time around, the builders are angling for a $10,000 credit, maintaining that on a price-adjusted basis, that amount is equal to the 1975 credit. There will be continuing coverage of this issue in the next e-alert . Most insiders agree that any new laws will probably include sales that occurred previous to enactment.

So if you are in need of new housing, even just as an investment, jump on the opportunity because if the tax credit is enacted you would probably not loose out. Please consult your sponsor for more suggestions on your individual situation.

(Reprinted from Inman)