This is true for both the first time buyer credit, and the existing buyer credit... the amounts bantered about are MAX amounts, and not every purchase will get these amounts. Thought I would reblog this...
One of the common misconceptions for home buyers (and some real estate professionals) is that the first time home buyers tax credit is $8000for all buyers.
When reading the fine print of the IRS form 5405 there is an entry line to fill out asking for the smaller of 2 items: $8000 or 10% of the purchase price.
An example: Mr. Smith purchases a home for $65,000. If he meets the criteria to receive the 1st time home buyers tax credit he would enter $6500 on line #1 of form 5405. If Mr. Smith purchased a home for $90,000 then he would enter $8000 on that line.
Reiterating: The tax credit is for 10% of the purchase price of the home up to $8000. It is not a full $8000 for every home buyer.
Let's all help to stop the confusion to home buyers by using the words "Up to" in our articles.
Edit: The chart that NAR put out for their members to use states "$8000" but it doesn't say "Up to $8000". You may want to add the language to your own charts for accuracy.
Contact Kris Wales- A partner for your real estate needs in Macomb County MI
Today I am starting a series of posts to provide links to our listings in Rhode Island and Southeastern MA... For today, I am featuring just Rhode Island real estate. Each week I will post other listings our agents have for sale.
For today:
24 Gallup Street, in South Providence (02805) -- 2 family house with 1st floor unit having 3 bedrooms, and the 2nd-3rd floor townhouse style unit having 4 bedrooms. The owner is also selling the vacant adjacent lot. For the house, $99.900. For the adjacent vacant lot: $36,500. If a single buyer acquires both, the seller is willing to negotiate the price of the parcel and house. See listing info: 24 Gallup Street Providence RI 02905
50 Mohr Street, Johnston RI (02919) -- Lakefront property on Oak Swamp Reservoir, with 2 docks for boating. 3 bed 2 bath, with detached garage and Gazeebo. Fanastic views. Classic library with built in mahagony book shelves. Wood buring stove. Marble fireplace. Reduced to $299,900. Will sell fast. See listing info: 50 Mohr Street, Johnston, RI 02919
20 Hall Avenue, in Warren Rhode Island (02885) -- Waterfront on Belcher's Cove. Multiunit capability, with 2 built out units currently existing. 2 buildings. Used to be a lumber mill. Possible 3rd and 4th units. Reduced to $299,900. Great investment property. See listing info: 20 Hall Avenue Warren RI 02885
Please call Mandie Sullivan, 401-293-0631, for details on these properties. I will be posting additional properties each week. Thanks.
The tax credit for first time homebuyers has been extended, and enlarged to allow hoigher income folks to receive the benefit. In addition, the credit has been extended now to existing homeowners who purhcase a new home. Here are some details:
First-time homebuyers
Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”
• A purchase must be under contract by April 30, 2010.
• A purchase under contract by April 30 must close no later than June 30, 2010.
• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.
Current homeowner tax credit
An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.
• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.
• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.
Additional changes
The tax credit extension includes other new rules, such as:
• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.
• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).
The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.
The FBI has verified, on their web site, that there is a "Jury Duty Scam". This is a phone related scam, so if you know anyone who doesn't use the Internet, especially older people, you should make sure they do not become a victim. The caller claims to be a court officer, and then accuses the victim of missing a jury duty appointment. After the victim is sufficiently worried about failing to report for jury duty, the caller then suggests that they verify if they have the correct person. It is at that point that they ask for ss number, birth date, and sometimes even credit information.
The caller works the conversation into a threat of a fine that can be paid over the phone by a credit card. What is amazing is that this has been going on in some form since early 2005! If you have one of these calls, or know someone who has, one thing to do is *69 after you hang up. This will give you the phone number that the call was made from. Then contact the FBI and report the incident.
You can also use *57 which records the phone call at the phone company as a "call trace". One web site says: "When you activate the Call Trace code (*57) immediately following the harassing call, the caller's phone number is recorded by the phone company." But *57 doesn't give you the phone number. The phone company has to get an authorization form before the harasser's phone number can be turned over to law enforcement and there may be a fee. Some phone companies charge you each time you use Call Trace and others have a monthly charge for an unlimited number of traces.
If the phone number is blocked, tracing the call may help the FBI or other law enforcement agencies gather enough information to go after the schemers even from the perspective of "Do Not Call" fines and penalties, especially if your phone is on the DNC list. In any case, don't get your identity stolen this way. Tell someone who might be a victim to be careful, too.
Heath Coker, Owner of Cape Group Real Estate www.CapeGroup.com / capegroup@capegroup.com 508-548-8888 Licensed in MA Its a beautiful day on Cape Cod! @CapeGroup
One of my agents is hosting an open house on Sunday, October 25th from 1:00PM till 3:00PM at 1618 Fish Road in Tiverton RI. This 2 bedroom house on just under an acre has been newly rennovated. Mandie Sullivan is the hostess for the open house, and we find this house to be a great location at a great price, and we welcome all comers.
The location is right off Route 24, about 20 minutes from downtown Providence and about the same to Newport. Boston is about an hour away.
I wanted to take a moment to welcome Nancy Rosedale aboard to our real estate firm. She comes to us with 18 yrs experience as a mortgage loan originator, now affiliated with Shamrock Mortgage, with many years of experience as a property investor, owning a number of multi unit apartment buildings, and with great experience in real estate sales.
Nancy will be working the Northern Rhode Island region, from Providence North, and the Southeastern Massachusetts region, including Bristol County and the Cape. She will be working with buyers, listings, and of course, investors. She has been doing a large number of BPOs for foreclosed properties as well, and will continue to do so. Welcome Aboard Nancy!
We also want to welcome Glenn Russell to the world of brokers in RI... Glenn has been a Broker with us in Massachusetts for several years now, and just received his Rhode Island Brokers license this week. Congratulations Glenn on a job well done. Glenn is also a practicing attorney in MA, and has been handling a variety of property related cases there, including a land related suit that is precedent setting. We expect to hear about Glenn's work in this regard in the local and perhaps national media over the next few weeks.
Propertyflipping is a practice whereby a recently acquired property is resold, often for a considerable profit.
Most propertyflipping occurs within days or a few weeks of acquisition and usually with only minor cosmetic improvements, if any.
While there is nothing illegal with selling properties within days of acquisition, some of these transactions are fraudulent because the condition of the property is misrepresented and/or the value of it is artificially inflated.
Effective June 9, 2008, FHA temporarily waived the propertyflipping rule 90-day waiting period, for homes that were foreclosed onand being sold by lenders or by property disposition firms on the behalf of lenders.
So if you have a property that was purchased by an individual investor, or investment group, you must must wait 90 days to DO ANYTHING! We can not order an appraisal or case #, we can't open escrow, order title or apply for the mortgage. You can't even draw up the contract, or do inspections or the buyer will be in jeopardy of losing their deposit. There basically can be no record of any sale during that 90 day timeframe.
This has become an issue in recent months because of the lack of knowledge of the guidelines along with the anxiousness of all parties involved. Day 91 is when it can all begin unless the exceptions apply.
We CAN however, apply for the mortgage with a property "to be determined "and get the buyer PRE-APPROVED.
So keep this in mind when you are putting your deal together and expecting your lender to jump through hoops on day 91 and close in two weeks!
The waiver applies to owner occupants only and does not apply to people/entities that purchase foreclosures either singly or in bulk for resale. Subsequent sales of such properties will continue to be subject to the standard regulatory requirements.
The temporary propertyflipping waiver has been extended and FHA will recognize sales agreements on foreclosed properties signed by the seller and buyer on or before May 10, 2010.
Do you want more BORING but pertinent facts you MUST know if you encounter a flip ????
The only exceptions to the FHA property flipping rule are:
1. Properties acquired by an employer or relocation agency in connection with the relocation of an employee. 2. Re-sales by HUD under its Real Estate Owned (REO) program. There are LOTS out there! And most homes can benefit from an FHA 203k streamline loan!
3. Sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies.
4. HUD REO properties that were purchased by nonprofits at a discount with resale restrictions.
5. Sales of properties that are acquired by the seller through inheritance.
6. Sales of properties by state and federally-chartered financial institutions and government sponsored enterprises.
7. Sales of properties by local and state government agencies.
8. Sales of properties within Presidentially Declared Disaster Areas.
9. The restrictions do not apply to a builder selling a newly built home or building a home for a borrower.
10. The sale must be by the owner of record.
11. Appraisers are required to analyze any prior sales of a subject property in the previous three years for one to four family residential properties.
12. A lender must obtain a second appraisal by another appraiser if: the re-sale date of a property is between 91 and 180 days following the acquisition of the property by the seller, and the resale price is 100 percent or more over the price paid by the seller when the property was acquired FHA reserves the right to require additional documentation from a lender to support the resale value of a property if: the resale date is more than 90 days after the date of acquisition by the seller, but before the end of the twelfth month following the date of acquisition, and the resale price is 5 percent or greater than the lowest sale price of the property during the preceding 12 months.
Any subsequent re-sales of the properties must meet the 90 day threshold in order for the mortgage to be eligible as security for FHA insurance.
So remember to do your research! We are the professionals and it is our job to know this information for our consumers. We will save time, money and problems if we know this up front.
Below is a news brief published by Busines Week Magazine today. My question is, if the banks make it harder to obtain a short sale, will this adversely affect the rate of foreclosures? Perhaps an "unintended Consequence" of making short sales tougher to gain permission on will result in an increase in foreclosures, which will then drive home prices down further, resulting in even more strategic defaults, and a viscious cycle of downward spiraling values, sales.
What is your opinion? How would you recommend banks handle this sort of thing so that there is less negative impact?
From Business Week today, as quoted at Realtor.org:
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.
When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.
Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.
"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."
Source: BusinessWeek, Christopher Palmeri (10/09/2009)
We have need of a quote for complete demolition of a 2 family house in East Providence... we are hoping to get this ASAP... anyone have a recommended vendor for this sort of thing?
It appears that the house is rotten in structurally important areas, perhaps even termite infested... the structure was built c. 1920... We are seeking to get a quote for demolition of the building as soon as possible.
If you know of a good demolition crew that you have actually used before, please either pass their info on to me, or have them call us at my direct line 401-293-0131
Time is of the essence on this, so please bear that in mind...
The vendor will also be asked to quote design build services, if they provide such services, at the same time...
We are seeking to recruit motivated buyer and listing agents for Southern RI (Westerly area and West Greenwich) and Kent County RI. We are also seeking agents in Bristol County MA and the Cape. Compensation plan is very competitive, no desk fees, free website, well established lead generation system, no charge for leads.
We need buyers agents, and listing agents TODAY!
Give us a call 401-293-0131 or email us here...
We have loads of qualified buyers, and a great team.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
;)
