First Time Buyers’ Tax Credit

 Posted by at 5:21 am
Mar 292009

(All sorts of disclaimers here… I’m not a tax advisor! You really do need to check with one—tax issues are never simple!)

There is a temporary credit available to first-time homebuyers for purchases from January 1, 2009 until December 1, 2009. The credit is equal to 10 percent of the cost of the home up to a maximum of $8,000.

Buyers can claim the credit on their federal tax return. If the credit exceeds their total tax liability, the buyer gets a refund check for the balance.

A first-time buyer is defined as an individual who has not owned a home in the past three years. For married joint filers, both must meet the test.

Eligible properties include anything that will be used as a principal single-family residence.

There are income guidelines. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full credit. The credit is phased down for those earning more.

The 2009 credit does not have to be repaid if the buyer stays in three years. But if is sold before that, the entire amount of the credit is recaptured on the sale.

People who purchased homes under the 2008 $7500 tax credit program will still be required to repay that credit to the government over a 15 year period.

 For additional information download this flyer:


I Don’t Have Any Ugly Listings!

 Posted by at 1:39 pm
Mar 162009

I’d marked the article “Ugly Listings Bad for Business” as one I wanted to read and it finally worked it’s way to the top of the pile. Written by Teresa Boardman, founder of the Saint Paul Real Estate Blog, it presented some rather interesting thoughts about how consumers view agents and their listings. “We build reputations with everything we do or don’t do, and are judged by the homes we put our signs in front, and apparently by the homes our colleauges put their signs in front of.”

That’s probably not fair, but it must be true. Perceptions tend to be reality.

Most folks know — at least at some level — Realtors do not provide property management services. So when you see a “for sale” sign on an unplowed or unmowed property, it’s not really the agent’s fault. Or is it? Of course there are practical considerations, but one speech you will hear from me when you list is that marketing your home means getting it noticed. We want that notice to be positive.

 As regular readers know, I made a decision some months ago not to list foreclosed property. I felt somewhat vindicated by Ms. Boardman’s observation that “banks often make lousy clients and don’t understand how to sell real estate.” Of course not understanding how to sell real estate isn’t limited to banks; Continue reading »


Don’t Wait For More Stimulus!

 Posted by at 2:08 pm
Mar 032009

As the stimulus plan and financial bailout continue to unfold, you’re going to see headlines about new incentives for home buyers and hear stories about 4% interest rates. The government already has in place one of the largest tax incentives for qualifying home buyers it has ever offered – up to an $8,000 tax credit for first-time buyers, and mortgage rates are within a half a point of being the lowest they’ve been in our country’s history.

Let’s not contribute to the myth that mortgages aren’t available because they are! Remember though, because of increased delinquencies and today’s tougher economy, lenders have tightened standards for both new purchases and refis. And while mortgage financing is certainly available and affordable to everyone who qualifies, you’re going to need a solid credit score, you’ll need to be able to document your income, and, if you’re purchasing a new home without a special government program from the VA or USDA, you’re likely going to need a down payment as well – at least 3.5% for an FHA loan. And there’s no stimulus bill or bail-out plan that is going to change this. So, if you’re looking to purchase a new home in 2009, take the time to locate the following items:

  • Your W-2s and tax returns for the last two years; 
  • Your last three months of bank statements; and 
  • Pay-stubs for the most recent 30 days.

If you haven’t checked your credit in awhile, now is the time to do so. A lot could have changed since the last time you checked it, good or bad, and you don’t want any surprises that might alter your plans. Most lenders will gladly review your credit for you and see if there is anything that needs to be addressed, but don’t wait. It would be a shame to miss out on a great opportunity simply because you didn’t check your credit report.

Thanks to Mortgage Broker Tom Drew and his Home and Money Newsletter for the above information…