I've been sitting on the front seat of this roller coaster. If this was a war, I would be on the front line. I'm a realtor. I witnessed the foreclosures flood the market place, driving home values to record lows. I saw the peak in 2009 with the help of the Federal Homebuyers Tax Credit.  I now see the winter settling in.

Homebuyers cooled down once the news was released that an extension was placed on the Tax Credit deadline to April 30, 2010. Buyers now have their minds on Thanksgiving Turkey and Christmas.  I predict the market to be as hot as a firecracker in late February. The closing deadline on first time homebuyers and new 5 year previous owners will create a panic to purchase that perfect home.

My advice is simple. Don't wait. Keep looking now. Competition has dropped. Get an aggressive agent that will engage your transaction in a moment's notice. Sell your stock. Buy real estate. My company, Fredericksburg Homes, is a full service real estate agency based in Fredericksburg, VA. I specialize in residential, commercial, investment properties and nationwide relocation.

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The current homebuyer tax credit expires on December 01, 2009. Those wanting to participate in this program need a settlement statement or HUD 1 and need to close their real estate transaction prior to December 01, 2009. This means if you want to get your credit, now is the time to get moving. A normal real estate transaction takes anywhere from 40 to 60 days, some even longer. Title issues may arise and delay the transaction. Short sales can take many months to close. I can get you moving in the right direction now. It does not matter where you are; call or email me today. I have a worldwide referral network at Century 21 Adventure to get you in touch with the perfect agent to fit your exact needs. Don't take a chance waiting for a tax credit extension that may never come. Act now! See all homes in Fredericksburg or in all Virginia on my website.

Tom Smith, Realtor

540-735-2266

tsmithc21@gmail.com

This is an overview of the homebuyer tax credit;

•In 2008 Congress created a $7,500 First-Time Homebuyer Tax Credit.

•It went into effect April 8, 2008 and was set to expire July 1, 2009.

•The big problem: It had to be repaid over 15 years. People viewed it as a debt and not a benefit.

In 2008 NAR began advocating to:

•Remove the repayment feature of the credit

•Extend the credit to the end of 2009

•Make the credit available to every home buyer

Working with Realtors® across the country:

ü succeeded in removing the repayment requirement for 2009.

üThe credit has been extended to on or before November 30, 2009 and can be claimed by those who closed on homes on or after January 1, 2009. It is still repayable for 2008 purchases.

üThe credit has been expanded to $8,000.

§But, it is still only for first time homebuyer

• The new Credit is an $8,000 REFUNDABLE Tax Credit (or up to 10% of the purchase price).

- So if the property is $75,000, the credit is only $7,500. (Assume a property over $80,000 for the rest of the discussion).

• Refundable means that if your total tax liability in the given year is less than $8,000, the IRS will send a refund for the balance.

• Many taxpayers do not have tax liability that exceeds $8,000.

- For example, according to the 2008 IRS Tax Tables:

• A single filer would need $46,600 in taxable income to have $8,000 in tax liability.

• A couple would need $58,600 in taxable income to have $8,000 in tax liability.

• Those with less tax liability will in most cases get a refund meaning they get the full value of the credit

Who cannot take the credit?

If any of the following:

-Your income exceeds the phase-out range. This means joint filers with Modified Adjusted Gross Income (MAGI) of $170,000 and above and other taxpayers with MAGI of $95,000 and above.

-You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.

-You stop using your home as your main home.

-You sell your home before the end of three years.

-You are a nonresident alien.

First-Time Homebuyer Definition

•Defined as someone who did not own another main home at any time during the three years prior to the date of purchase.

-For example, if you bought a home on January 15, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another home at any time from January 15, 2006 through January 15, 2009.

-So if the last time you owned a home was 2005, you are eligible for the credit even though it is really not your "first" home.

-For married joint filers, both must meet the 1sttime homebuyer test to take the credit on a joint return.

More on Income Limits TYPE

INCOME LIMIT

PHASE OUT START

Single Filers

$95,000

$75,000

Married Filers

$170,000

$150,000

The Home

•Must be the "main home" i.e. principal residence. Which is generally considered to be the home where you spend 50% or more of your time? It can be a condo, Single Family detached, co-op, townhouse or something similar.

•The home must be located in the United States.

•Vacation homes and rental properties are not eligible.

•For new construction, the "purchase date" is the date you occupy the home. So the move in date must be before December 1, 2009.

Recapture-3 Year Residency

•If the home is sold prior to three years of ownership, the tax credit must be repaid.

-This is an improvement from the prior credit. That credit needed to be repaid in total over 15 years or the balance had to be repaid on sale.

•This provision is designed to prevent flipping homes in order to get the credit.

Other Provisions

•The new credit is available to residents of the District of Columbia

•Purchasers who utilize state/local revenue bond financing can now use the credit.

•Purchasers who bought before January 1, 2009 are still subject to the terms of the repayable credit.

Let's get going so you can qualify soon to receive your well deserved credit.

 

 

In our real estate business, it seems like there are two real estate markets.

The first real estate market is the "distressed" market - foreclosed homes, REOs  and homes being sold under a lender short sale.

The second real estate market is the listing - market. Home -sellers who are selling.

We have home buyers who are specifically looking for homes in the first real estate market. Basically, they are hoping for a bargain. But, buying such property at a lowerr price comes with risk (depending on where the property is located, such risk can include "as is" home condition, no guarantees, and minimal or no seller disclosures) and may require patience while waiting for decisions to be made by the seller.

We also have home buyers who want to stay away from the first real estate market, and concentrate on a more "normal" sale. These home buyers are more comfortable with the "normal" home buying process - the face-to-face home seller, including seller disclosures.

The market will not get back to normal until our inventory of the second gets low.

We are seeing really tough times in today's market. There are bail outs now for Wall Street, banks, auto companies, and many others waiting in line. Our industry and factories are going out of business. Many good people are being laid off by the thousands daily. I think we should focus on bringing back our industry. We may pay more for "Made in America", but it will be made of quality and our country and fellow citizens will get the revenue. That revenue will go back in the system.  We are now laying off our citizens to give our business to other countries for cheaper rates. We are cheating our future. Our kids future. We'll be paying back the funds that have already been given out for the rest of our lives. In real estate, we can see these other countries come in to purchase our properties for good deals because our pain is their gain. What do you think?

Tom Smith, Realtor

Portobago Bay was named after the Portobago Indian Tribe, whom once used this beautiful land as home. Captain John Smith described passing vast indian settlements on his famous discovery of Virginia. He passed right by this beautiful area situated five miles south of the town of Port Royal on the Rappahannock River. The bay was formed over thousands of years of river flow to form a very wide river basin. Wide river views are panoramic and over one mile in distance of width. This is quite rare for the Rappahannock River, known for it's strong current and deep narrow channels. These views are the widest for at least 100 miles. The water depths in the bay varies anywhere from 3 to 6 feet. This makes the bay special for the shallow depths tend to keep out excessive boat traffic. All is left is the peace and quiet and most remarkable views you can imagine. Portobago Bay was formed in 1985 by developer Carl Silver. Before the development, this land was once a cattle farm owned by the Baylor family. The original home of the historic "Portobago" plantation originated in the 1700's and was owned by the Waring family. The remnants of this house still stand in a grove of trees on northern point of Portobago Bay. This area is rich in history. I fell in love with this place back in 1988 while working for the Caroline County Sheriff's Office. The community always welcomed local law enforcement with open arms. I recollect times of just sitting at the very end of the very long dock and leaving my stress behind. I vowed to make my home here. In the year 2000, I purchased My lot 100 on the Portobago Creek. My wife, Christen, and I built our home here. We raise our five year old twins, Thomas and Rachel, in this community. We all enjoy family walks around Portobago Trail where it's not unusual to pass three or four other families doing the same. Road traffic on these state maintained roads are at a minimum. We bike ride. We fish at the commons area on the river and on Lake Powhatan. The community consist now of around 45 homes with a total of 106 lots. Some residents purchased their neighboring lots to avoid congestion. These residents are all just like family. We have about 5 get together a year, usually at the Reynold's Pavilion at the river commons area. We have numerous picnics for all occasions. There is a crime awareness day in which our children enjoy the company of McGruff, The Crime Dog. There are games for the kids to play and get to know their local law enforcement, curtious of the Caroline Sheriff's Office. We have a neighborhood crime watch program in effect here. I head that committee. I even have such a great relationship with our Sheriff's Office that they welcome our calls anytime, even if we are going out of town and want an officer to make sure our homes are safe until our return. If I were to define true paradise, it would be my Portobago Bay. The Bay is located far enough away from the hustle and bustle to be peaceful, yet close enough to be convenient. Our community consist of doctors, lawyers, CEO's, nurses, teachers, bankers, military personnel, engineers, and retired professionals, etc. We welcome you. Now, the secret is out.

I'm currently working with investors. I work as a Realtor for Century 21 Adventure, Inc. My market is in Fredericksburg, VA. It seems that most of my clients have decided to wait to purchase, thinking home prices will decrease another 20%. My perspective is a bird in hand is better than two in the bush. Prices may come down further. They may not. That's a chance they are willing to take. I'm confronted and asked daily about our current market conditions. I explain to them that now is the best time to get a once in a lifetime deal .Investors can make a fortune with flipping foreclosures. I advise my move up sellers that they may take a hit on the sale, but gain back on purchase. As Realtors, many buyers and sellers look to us and our input in their decision making process. We need to emphasize the positive points on purchase deals. The upside down clients need to consult their lender via hardship contact. The market will get better. Hang in there.