3rd February 2010

Tax Credits Benefit Both First Time Buyers and Current Homeowners

cash-credits 

Closing deadline extended to June 30, repeat buyers offered up to $6,500

 

Lately, I am getting more and more calls and emails each week asking about the details and deadlines for the home buyer tax credits, so I thought it would be helpful to place a new post on both www.RobertWhitfield.com, and my blog, www.TheWhitfieldAdvantage.com to highlight the main points.  First time homebuyers aren’t the only ones who can claim a tax credit when they purchase a home –current homeowners can take advantage of the tax break as well.

Prospective buyers, both first time buyers, and current homeowners now have until June 30, 2010, to close on their purchase and will need to submit documentation such as their closing statement (HUD 1) along with their tax returns to claim the credit. Buyers can also file an amended return and get their cash even faster. Here are the details:

FIRST TIME BUYER CREDIT

Credit: Equal to 10 percent of the home’s purchase price, up to $8,000 (ie. buy a home costing at least $100Kand you get the whole $8000.)

Who Qualifies for First Time Buyer Credit:

·                     Those who haven’t owned property in the last three years

·                     Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)

·                     Must be at least 18 years of age to claim credit

·                     Purchase price must be $800,000 or less

Important Deadlines:

·                     Buyer have until April 30, 2010, to enter into an accepted (binding) contract for a home purchase

·                     Buyer have until June 30, 2010, to close on the purchase

CURRENT HOMEOWNER CREDIT

Credit: Equal to 10 percent of the home’s purchase price, up to $6,500

Who Qualifies for Current Homeowner Credit:

·                     Those who have owned and lived in their principal residence for at least five consecutive years during the past eight years

·                     Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)

·                     Must be at least 18 years of age to claim credit

·                     Purchase price must be $800,000 or less

Important Deadlines: (Same as for first time buyers)

·                     Buyers have until April 30, 2010, to enter into binding (accepted) contract for a home purchase

·                     Buyers have until June 30, 2010, to close on the purchase

In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac — set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The Atlanta MSA is NOT considered a high-cost market – we are a normal market. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.

What this all means is that if you’re even remotely considering buying a home, now’s the time to do it.

Contact Robert Whitfield at 678-585-9691 for more information about these great Buyer Bonuses, as well as other bonuses offered by various metro Atlanta counties for those who qualify, and various Atlanta homebuilder bonuses as well. To learn about our unmatched client level assistance for Buyers – Direct Broker Representation and the Wise Buyer Program, visit: www.TheHomeBuyersRep.com and click Compare Services – this program provides buyers far more benefits, diligent services, and protections than the “industry standard services’ offered by any other agent/realtor in metro Atlanta.

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26th January 2010

Leaving 2009…Whats Ahead In 2010 For Atlanta Real Estate…

2010 versus 2009

Experts see a mixed bag for 2010, which we will detail in this post, however, one thing is unmistakably clear…if you have a reasonably secure job, and ever wanted to buy your first home, or you are a current homeowner who wants to change homes or buy a  move up home, you better get off the fence and go for it soon!  Now is the time to buy!

Some of the strongest incentives ever to purchase a home exist right now: down payment assistance programs like the Georgia Dream Homeownership Program (I can refer a lender trained and experienced with this program – if you use the wrong lender, trust me, it won’t happen), our current historically low interest rates,  a good selection of bargain properties in almost all areas and price ranges, an $8000 tax credit for first time buyers, plus a $6500 tax credit to existing homeowners who are move-up buyers are all awesome. Its still a strong buyers market and these incentives have heated up the market over the last few months, but… the tax credits are set to expire, and the lending rates are expected to move upward after March 2010.

Significant Trends to Expect in 2010:

More Buyers Entering the Market – Home Buyer Tax Credits End April 30, 2010

In 2009, the federal government’s $8,000 tax credit for first-time homebuyers was a huge topic in the real estate world. The National Association of Realtors, estimates 350,000 homes nationwide were sold to first-time buyers who probably wouldn’t have bought a home if not for the credit. The group also reports that about 47 percent of all home sales in 2009 will be to first-time homebuyers, up from 41 percent in 2008.

Hoping to spur the housing market’s recovery, the federal government extended the tax credit — which was set to expire on Nov. 30 — and gave buyers until April 30, 2010, to secure a purchase contract. The credit was also expanded to include existing homeowners, plus buyers with higher incomes. If the original tax credit brought more first-time buyers into the market, the expanded credit should motivate current homeowners to trade up.

Lending Standards Still Tight

According to the Federal Reserve, fewer banks tightened their lending standards in the third quarter of 2009. However, that doesn’t mean lending standards have gotten looser, either. In 2010, banks will continue to keep the subprime mortgage debacle in mind and require extensive documentation and stellar credit from borrowers looking for the best rates. If you plan on applying for a loan in 2010, take steps to get your finances in order as soon as possible and boost your credit score. FHA is still a very good option if your score is at least 580 – you can still get a loan with only 3.5% down payment.

Rising Mortgage Rates

In 2009, the Federal Reserve bought up a massive amount of mortgage-backed securities, keeping mortgage rates at historic lows for much of the year. However, the Fed is scheduled to end those efforts in March 2010, meaning mortgage rates could jump as much as a full percentage point next year. If you’re considering buying a home, now is the time to take advantage of historically low interest rates. If you’re a current homeowner thinking about refinancing, act now.

Stabilizing Home Values — Prices Expected to Rise in Some Places

According to the Standard & Poors/Case-Shiller Home Price Index released in November 2009, U.S. home prices have improved for two quarters in a row. The national index rose 3.1 percent from the second quarter to the third quarter of 2009. Likewise, the National Association of Realtors recently reported that median home prices have risen for two consecutive quarters. NAR’s chief economist, Lawrence Yun, also predicted that home prices will grow 4 percent in 2010. Some local US markets have farther to go than others to acheive stability, but Atlanta has by various respected indexes shown favorable results compared to many metro areas around the country and local market trackers have shown price increase in some areas – its safe to expect Atlanta Home Prices will follow the overall national trend and rise some more in 2010.

Feel free to contact Robert Whitfield at 678-585-9691 for more information on Metro Atlanta and North Georgia Real Estate and Housing Markets.

 

 

 

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9th January 2010

Big Gains in Existing-Home Sales as Buyers Respond to Tax Credit

sold-house

Conditions in the current housing market, with great interest rates and cheaper prices are optimal for buyers with secure jobs – add in the current tax credits of $8000 for first time buyers, or $6500 for buyers with existing homes (both set to expire April 30, 2010) and it doesnt get any better! And plenty of buyers are taking action as the stats below show. 

I just helped a young first time buyer get out of her apartment and into her first home and at the same time qualifiy for the $8000 tax credit – it was really exciting. Like most buyers, rather than waiting until 2009 taxes are filed, she will file an amendment to her 2008 return and the IRS will mail her an $8000 refund check in a few weeks. What an awesome way to cap off the wonderful experience of becoming a new homeowner!

Take a look at some interesting sales statistics from data compiled in a late December 09 report by NAR (National Association of Realtors®):

Existing-home sales rose again in November 09 as first-time buyers rushed to close sales before the original November 30 deadline for the recently extended and expanded $8000 tax credit.

Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply, down from an 7.0-month supply in October.

According to Freddie Mac, the national average loan commitment rate for a 30-year conventional, fixed-rate mortgage fell to 4.88 percent in November from 4.95 percent in October; the rate was 6.09 percent in November 2008. November 09’s mortgage interest rate of 4.88 was the second lowest on record after bottoming at 4.81 percent in April 2009.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Sales remain at the highest level since February 2007 when they hit 6.55 million.

Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

An NAR practitioner survey shows first-time buyers purchased 51 percent of homes in November, compared with an upwardly revised 50 percent of transactions in October.
For the second month in a row, sales have risen in all price classes from a year earlier. Prior to October, the only consistent gains were in the lower price ranges.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said conditions are optimal for buyers in the current market. “Inventories have steadily declined and are closer to balanced levels, which indicate home prices in many areas are either stabilizing or could soon stabilize and return to normal appreciation patterns,” she said. “This means buyers still have good choices but are purchasing near the bottom of the price cycle with historically low mortgage interest rates. Throw a tax credit on top and it really doesn’t get any better for buyers with secure jobs and long-term ownership plans.”

The national median existing-home price for all housing types was $172,600 in November, which is 4.3 percent below November 2008. Distressed properties, which accounted for 33 percent of sales in November, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Sales are Up, Prices are down!

Single-family home sales jumped 8.5 percent to 5.77 million units in November from 5.32 million units in October – 42.1 percent above the pace in November 2008. The median existing single-family home price was $171,900 in November, down 4.4 percent from a year ago.

Existing condominium and co-op sales in November were 60.1 percent above sales a year ago. The median existing condo price was $178,000 in November – 3.1 percent below November 2008.

Regionally, existing-home sales in the Northeast rose 6.6 percent to an annual level of 1.13 million in November, and are 52.7 percent higher than November 2008. The median price in the Northeast was $223,400 – down 13.1 percent from a year ago.

Existing-home sales in the Midwest increased 8.4 percent in November to a pace of 1.55 million and are 53.5 percent above a year ago. The median price in the Midwest was $140,800 – a decline of 0.4 percent from November 2008.

In the South, existing-home sales rose 4.8 percent to an annual level of 2.39 million in November and are 44.8 percent higher than a year ago. The median price in the South was $151,400 – down 1.4 percent from November 2008.

Existing-home sales in the West increased 10.6 percent to an annual rate of 1.46 million in November and are 28.1 percent above November 2008. The median price in the West was $231,100 – 4.1 percent below a year ago.

If you or anyone you know would like to discuss any aspect of Atlanta Real Estate,  such as the Atlanta Housing Market or the Extended Homebuyer Tax Credit, I can be reached at 678-585-9691. For a few examples of some of the unique services I provide to inform and protect homebuyers I represent – services that exceed what other agents can offer, go to http://www.thehomebuyersrep.com/actual_success_stories.htm .
Robert Whitfield, Broker/Owner

Advantage Realtors

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6th November 2009

New Homebuyer Tax Credit Extension Waiting for Presidents Signature!

obama-signs-stimulus-bill    Both the House and Senate have passed the extension to the Homebuyer Tax Credit and it is on the way to the Presidents desk to be signed, possibly as early as today. The bill will extend the Tax Credit to buyers who have a home under contract as of April 30, 2010, and can close by July 1, 2010. There are significant improvements and additions to the bill, including increased income limits for buyers, and now a Tax Credit of $6500 is available for CURRENT HOMEOWERS as well , who want to purchase a new home – as long a they have lived in thier current Primary Home for at least 5 out of the last 8 years!

Who Qualifies for the Extended Homebuyer Tax Credit?

·     First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.

·     Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum credit allowed for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1.            The price of the home.

2.            The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits, and will now allow home buyers with higher incomes to qualify for the credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

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21st July 2009

Foreclosures Slow Down, Short-Sales and Deed-in-Lieu Numbers Jump!

just-reduced-graphic

By Robert Whitfield

Update: Foreclosures, Short Sales and Deed in Lieu Actions

As foreclosure moratoriums provided temporary relief to troubled borrowers earlier this year, two other kinds of home forfeiture–short sales and deed-in-lieu-of-foreclosure actions — rose sharply.

In a mortgage study released in early July, federal financial regulators reported a 176% jump in short sales and deed-in-lieu proceedings from the first quarter of 2008 to the first quarter this year.

Short sales and deed-in-lieu actions require borrowers to forfeit their homes to eradicate their mortgage debts, usually for less than the full amount owed. Both these actions require the lenders approval.

Selling a home or handing it back to the bank in this manner does less damage to a borrower’s credit rating than a foreclosure, and is less of a hassle for the lender.

Year-over-year first-quarter short sales jumped from 5,523 to 17,036, according to the report from the Comptroller of the Currency and Office of Thrift Supervision, the U.S. Treasury Department agencies that oversee banks and S&Ls.
Quarterly deed-in-lieu actions (voluntarily giving your home back to the lender to avoid foreclosure action) edged up from 1,065 to 1,158.

Completed foreclosures still far outnumbered the alternate forfeitures. They totaled 78,936, up from 76,548 in the year-earlier quarter but far below the high of 126,266 in the third quarter of 2008.

But things are NOT getting better. In fact, they will probably get worse.

Foreclosure statistics are expected to spike again soon as federal, state, local and lender-imposed moratoriums expire.
The regulators said their report covered 64% of current home loans in the United States. Astonishingly, they noted that most of the short sales involved borrowers with prime loans, not subprime or alt-A mortgages!

Whether you’re an investor, second home buyer, or a first time home buyer, you don’t need a Doctorate in Economics to see this market is a golden opportunity! Now is the time to buy real estate – and because of the new first time buyer $8500 tax credit (which does not have to be paid back) on home purchases through the end of 2009, now may be the best opportunity first time buyers will ever see to get into a home.

We are not just talking about deals – there are literally Steals out there in all price ranges and property categories – if you know where and how to look. This opportunity includes starter homes, residential and commercial investment properties, luxury homes, second and retirement homes in costal and mountain resort areas and everything in between.

Those who can take advantage of the market now will reap great rewards for years to come as they simply ride the tide of rising values over time – and the market will come back and values will rise as it always has after every economic downturn in history.

I can help you buy your next Atlanta Home, Atlanta Luxury Home, Atlanta Investment Property, and now even Costal and Mountain Resort Properties (more in a future blog) – give me a call to learn more!

Robert Whitfield

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25th February 2009

$8,000 First-time Home Buyer Tax Credit Now Available!

The following is a well written article about this important first time home buyer incentive aimed at stimulating the economy. As I have said many times before – if you know your job is secure and you have good credit, there has never been a better time to buy an Atlanta home or Atlanta investment property. Robert Whitfield

By Amy Hoak, MarketWatch 2/25/09

CHICAGO (MarketWatch) — First-time home buyers who purchase a home this year can now take advantage of the stimulus bill’s $8,000 tax credit, the U.S. Department of the Treasury said in a news release on Wednesday.

Unlike the previous $7,500 credit available to this group of buyers, the credit outlined in the American Recovery and Reinvestment Act of 2009 does not have to be paid back — if the home remains the buyer’s “main home” for at least 36 months after the purchase date, according to the Internal Revenue Service’s Web site. First-time buyers, for the purpose of this credit, are those who have not owned a home in three years.

Buyers must purchase a home before Dec. 1 to be eligible, and the credit can be claimed on a home buyer’s 2008 or 2009 tax return. Tax returns for 2008 are due by April 15, but most taxpayers can get automatic extensions to Oct. 15 without citing a reason. (You must pay any estimated tax liability at the time the extension is filed.) Filing an amended 2008 return after you buy would also be an option for getting the credit sooner.

“For first-time home buyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman, in a news release. “This important change gives qualifying home buyers cash they do not have to pay back.”

Buyers can claim 10% of the purchase price, up to $8,000, or $4,000 for married individuals filing separately, according to the IRS’ Web site. The credit starts to phase out for those whose adjusted gross income exceeds $75,000, or $150,000 for joint filers.

The IRS has posted a revised version of the form required to claim the credit, Form 5405, on IRS.gov. Visit IRS.gov’s first-time home buyer page.

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