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First-time home buyer 2009 tax credit

I hate to open up a can of worms, but are any of you appraisers checking to see if buyers are first time and qualify for the First-time home buyer tax credit on your comparable properties?

Enough Realtors that I have spoken with say that there business has picked up with help from the tax credit, but I have yet to find an agent that has said that any of the houses I am using as comparable properties have qualified.

I dread running across one, because just because it is an '$8,000 credit' doesn't mean the value is $8,000 for each transaction. It all depends on the home buyers tax base, etc.

Anyone?

Posted by Sara Goodwin - Portland, Oregon Appraiser on 04/24/2009 11:33 PM

Comments (12)

taxes, firsttime tax credit, first time home buyers, appraisal issues

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12 Comments on First-time home buyer 2009 tax credit

APR

I don't think the value of the credit should effect the house as the credit's only good for first time buyers.

APR

We are dealing with vacation or second homes, so we do not deal with the tax credit. Would be great, though

Hi Sara - great point. I haven't closed any of the deals using the tax credit but totally support the premise. Ummmmm- now I'll need to read the specs once more. Thanks so much for posting.

Cheers

Interesting premise. I don't know that the "credit" qualifies as a concession. It is not off the purchase price, it is not a deduction on the HUD. Even if someone is motivated to purchase because of it, that doesn't mean they are going to necessarily qualify for it on their next return.

It is not the duty of the buyer to inform the agent of their plans to utilize it, so how will you ever even verify that the credit was utilized?

I'm going off to think about this one for a while.....

Sara: I don't know how any appraiser, or anyone doing a CMA would be able to tell if a home was purchased using the current tax credit available to buyers. It does not appear on the HUD-1... it comes back to the buyer way after closing... so it would not be an issue. It also is not connected to the home they are buying... obviously.

It seems to me the tax credit is between the buyer and the IRS. I don't see how it has any impact on appraisers or home values.

Thanks for your input, everyone.

I think for now I might just add a canned statements to the effect:

"The comparable property is in the value range for first time buyers. This has increased the popularity of such a home in the general marketplace due to the 2009 First-time home buyer credit. "

"The agent has disclosed that their client for this sale was a first time home buyer, but does not know if they will be taking advantage of the '2009 First-time Home buyer credit' "

OR if there is proof:

"The buyers have disclosed to the agent that they are qualified and will be taking advantage of the 2009 First-time home buyer credit. A $4,000 concession adjustment was made to this comparable property as the appraiser does not know the specific tax circumstances of the buyers or the value involved in the transaction after taxes".

Maybe...

MAY

Sara, I'll have to ask our Chief Appraiser how he handles that. I know that our company appraised a couple of homes this year where the buyer was utilizing the credit and that he has a statement that he puts in there regarding it. I do know it's noted on the 1st page of the URAR under concessions...but there is also a comment he's added to the addendum.

MAY

Hi Taunya -

Did you adjust for the credit on the subject properties?

I would love to hear your chief appraiser's answer to the comps, too -

Thanks.

MAY

Sara, Hi...the tax credit has absolutely nothing to do with the property or is of any concern to anyone other than the buyer and his or her tax preparer. If the buyer has not owned a home (primary residence) in 3 years they should qualify for the credit. That's it..end of story. I'm really confused by your post.

Hi Melissa -

I should have clarified that this is regarding appraisals rather than the loan process.

My question is simply whether or not the first time tax buyers credit should be considered a 'concession' similar to a seller paying down closing costs or gifting a car with the purchase of the house or builder upgrades, etc.

When we as appraisers call on concessions from realtors, home owners, etc, perhaps it is a good idea to cover this as one of the questions asked. Just because this first time home buyer would receive this tax credit with any property they purchase, is it possible that this provoked or enabled them to purchase a more expensive property? Would they not have purchased a property in 2008 if the tax credit were not available?

If we as appraisers don't expose as much as we know, we are liable.

JUN

Sara ... Thanks for this post and encouraging appraisers to look out for the US First Time Homebuyer income tax credit.

See my article ~ First Time Homebuyers Should Get Going Now ~ Take Advantage of the $8,000 U.S. Income Tax Credit.

Best to you at Portland.

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