My CPA has put it all down in one easy to understand briefing. I have attached it as an "informed" professional testimonial for what the new law entails. I am sure many have re-capped it in their own words, but I wanted to get it straignt from a pro who does this for a living. Hope it helps all of you.
FIRST-TIME HOMEBUYER CREDIT UPDATE! November 16, 2009
Dear Robert,
We are contacting you today to alert you to a significant change in the First-time Homebuyer Tax Credit that was written into the recently passed Worker, Homeownership, and Business Assistance Act of 2009. Especially as the close of the current tax year approaches, you may want to take certain steps to maximize your tax savings under the new law. We are here to assist you and answer your questions. First-time homebuyer credit: The first-time homebuyer credit is one of the most popular tax incentives in recent years. However, it is not a permanent tax break. It is temporary. Its originally scheduled expiration date of November 30, 2009 prompted Congress to extend and expand it. The new law extends the maximum $8,000 credit for principal residences purchased on or before April 30, 2010. If a taxpayer enters into a binding contract (i.e. enters escrow) before May 1, 2010 to close on the purchase of a principal residence before July 1, 2010, the credit will apply. Members of the U.S. armed forces, foreign service and intelligence community may have additional time to claim the credit if they are serving on qualified official extended duty outside of the U.S. Until now, the credit was limited to first-time homebuyers. The full credit (the $8,000 credit) is still limited to first-time homebuyers. However, some long-time residents of the same principal residence may be eligible for a reduced credit of $6,500. Generally, you must have owned and used the same residence as your principal residence for any five consecutive-year period during the eight year period ending on the date of the purchase of a subsequent principal residence. This provision is intended to help younger homeowners who are trading up and seniors who may be looking to downsize. Another change in the new law is notable in enabling many more taxpayers to take advantage of the credit. Congress raised the income phase-outs for the credit. Previously, the credit phased out for single individuals with modified adjusted gross income (MAGI) between $75,000 and $95,000 and for married couples filing joint returns with MAGI between $150,000 and $175,000. Under the new law, phase out starts for single individuals with MAGI at $125,000 and for married couples filing joint returns with MAGI at $225,000. The homebuyer credit can be very valuable. The credit is also very complex. In addition to the provisions we have described, there are special rules for repayment, new documentation requirements, a purchase price cap, and more. Please contact our office for more details about the credit. Sincerely yours,
Michael Silverberg, CFP, EA Coleman Cook, CFP, EA, MBA
The link is just off to the left!What's Twitter? Ok we think the way it's usually used is kinda wierd. We're not sure why anybody would want status updates of what others are always doing. Anyway, we have found a cool use for it and are going to use it to give our information-hungry clients the latest real estate information, hot properties for sale, and things they really really should know.
La Mirada real estate, not unlike others, can be aided by buyer using a unique offering strategy. Recent buyers have started offering very large deposits with their offers to purchase homes in La Mirada. Homes for sale in La Mirada are being lured by a relly big deposit (like $20-30,000) in place of the normal 1 or 2% deposit. It is really just a lure to be selected by the Seller, seeing large numbers. The risk to Buyer is fixed at 3% or the earnest money deposit , whichever is less -- in these cases it is still just the 3%, no matter how high the deposits is. La Mirada real estate is just where we have used this strategy most recently - it works in many other areas.
Beautiful Cambridge Court Townhouse Priced To Sell! Vaulted Ceilings add dramatic look in Spacious Bedrooms, including Master Suite. Home has been lovingly maintained and is ready to move right in! This is NOT a Fixer.
Living Room is spacious and centered around handsome Fireplace. Two Full Bathrooms Upstairs and a Convenient Half Bathroom in Living Area. Light and Bright Kitchen will make meals a pleasure. Community has nice Pool, Security Gate, and Grassy Areas. Outside patio has room for a barbeque as well as a table and chairs.
This is a short sale so buyers will need to exercise some patience with the process, however, we do have a good contact with the lender and expect this to be a quick short sale. This Townhome has all of the most important things condo buyers are looking for: Private Laundry, No Upstairs/Downstairs Neighbors, and Private Direct Access Garage Parking....Better hurry, this deal won t last long.
Anaheim real estateis just getting crazy again - run of the mill 4 bedroom home gets 4 offers in three days and then wants "last and best offers" to choose from. Is this really happening again? Sure is, for the very popular 350-450 thousand dollar range of homes for sale in Anaheim. What happened to the buyers market? Well, the supply has dried up so now all the buyers are fighting over the reachable priced homes in Anaheim. My buyers chose not to participate, but 3 of the 4 others did offer a scecond and last bid. Price went up by 30,000 dollars. This will only stop when we have more inventory to sell - soon to happen I believe.
At last there is some light at the end of the tunnel for the mid-range homes for sale in Fullerton, as well as many other cities around the country. Fullerton real estate has been plagued with the lack of buyers above the entry level (bargain basement) category. But now the new tax credit for move up buyers may change all of that. The new law encourages the move up by allowing a tax credit of up to $6500 for purchases of move up homes as long as the price does not exceed $800,000. The income limits have also been raised to $125,000 for single and $225,000 for joint participants. Also in order to qualify the buyer must have lived in their current house for 5 of the last 8 years. If this incentive works, then the move up market can improve and it will also bring some more entry level homes into the market. Sounds like a Win-Win to me.
La Mirada real estate is gaining popularity, especially now that "value" has become a diving force for buyers. La Mirada offer a wide range of homes and condos that can appeal to every levelof buyer. Proximity to the college has developed into an outstanding perk for many of the staff as well as students and citizens. Property price have been driven down to where La Mirada is seen to offer more square feet of home for the dollar. This, coupled with clean and safe neighborhoods, makes La Mirada homes for sale a destination city - one that people want to live in.
I know that this will seem apparent, but it is often overlooked. If trying to buy a home for sale in Fullerton, or any other city for that matter, the buyer has to watch the price very carefully. Now I am not talking about value, but rather about the negotiation and getting them to accept your offer, instead of one from someone else. It may seem crazy, but do not bid an even or round number. Just bump the bid up by $1,000. For example if you want to bid $375,000 for a home, stop and think - will someone else likely pick that same number? Set yourself apart from the crowd by bidding $376,000 instead. I have seen just one thousand dollars make a distinguishing difference to the Seller, in effect they just say "give it to the high bidder". Especially in these days where many people want the same nice home, a minor price difference can get your offer selected (and what is the downside - nothing). Give it a try - no harm, no foul.
We have seen this happen in Fullerton real estate two times in the last two months, it works.
If the current tax credit for first time buyers is extended and modified as is now proposed, then move up buyers will get a $6500 tax credit also. Fullerton real estate could get a real boost from this new twist - the current proposal not only allows for move up buyer to participate, but also increases the current limit on income. Being considered now is a plan to let income go up to $250,000 (for joint filling) or $125,000 (for single filing). Also required is the criteria that the buyer has to have lived in their current home for 5 of the last 8 years. Homes for sale in Fullerton would then get a boost, which has not been seen in the current wake of the existing tax credit. The current tax credit targeted the first time home buyer, and therfore excluded the mid range homes typically desired by the move up buyers. If this all passes then the real estate market will get a shot in the arm.
Comprehensive real estate information for sellers, buyers, and investors. Local experts for Fullerton, Anaheim, Brea, La Habra, La Mirada, Placentia, Yorba Linda, Orange, and other North Orange County areas. Another team blog is at www.foustonline.blogspot.com .
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