Front Porch Today

Inspect the Neighborhood:
As you consider buying a home in you prefered neighborhood, drive around to see how properties are maintained. They will affect the value of your home should you decide to buy. Talk to the neighbors in the area, it’s a great way to get some ideas about the neighborhood, also drive around on weekends or during rush hour to see what traffic is like. Other things you may want to consider include:

• How home values held up in the neighborhood.
• Traffic flows through the area.
• Driveway and/or available parking.
• Distance to schools, work, shopping, parks, etc.
• Is it in a flood zone, or will noise be a problem.

President Obama Signs Extended Home Buyer Tax Credit
Friday November 6, 2009
President Obama signed today the Extended Home Buyer Tax Credit legislation approved yesterday by Congress.

The key provisions are:
•The $8,000 home buyer tax credit is extended to April 30th, 2010, with another 60-day extension for those home buyers who have entered into a purchase contract by April 30th, providing it closes by June 30, 2010.

•Buyers who are not first-time home buyers can apply to receive a tax credit of $6,500, providing these buyers have owned and occupied a principal residence for 5 out of the last 8 years.

•Income levels for those who buy a home on or after November 6, 2009 is raised to $125,000 for a single person and $225,000 for a couple, with phase-outs above those levels.

Frequently Asked Questions on the Homebuyer Tax Credit Changes

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase-out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

New York’s REALTORS applaud members of the NY House delegation for their leadership on homebuyer tax credit extension

On behalf of the 56,000 members of the New York State Association of REALTORS, today I express our sincere gratitude to the 28 US House of Representatives members from New York for their vision and leadership in addressing the continued recovery of our housing industry and, ultimately, our economy.

Yesterday, New York’s 28 representatives voted to approve the extension and expansion of the homebuyer tax credit that was included in a wide-ranging piece of House legislation that extended unemployment benefits. Our Congressional Delegation has a long-history of supporting REALTOR issues, and none in recent history has been more important than this tax credit.  REALTORS know that the tax credit is working to revitalize the housing market and position it to once again lead our economic recovery.

The legislation extends the availability of the tax credit to purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction. The credit will remain $8,000 for first-time buyers, while repeat buyers who purchase between December 1, 2009 and May 1, 2010 will be eligible for a credit of $6,500. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.

We are hopeful that President Obama will sign it into law in the coming days.

Dear Home Buyer!

I am VERY excited to report that Congress has answered our call to extend and expand the homebuyer tax credit!                          

Both the House and the Senate have passed an unemployment insurance bill, which includes an amendment that expands and extends the tax credit.  That bill will be sent to President Obama for his signature in the next day or so.

Here are 10 questions you really want to ask so you can identify the best real estate agent to sell your home.

Western New York is full of agents who sell real estate. But not all agents are created equal, some of them are full time some are not, some are more efficient than others, aggressive and focused, and willing to go the extra mile. And some of them are not.

Finding an agent who will sell your home using a wide range of marketing tools to get you the best deal possible in a reasonable amount of time, all while charging a fair rate, takes some effort.

1. What Price? Ask the Realtor how much they think they can sell your home for. They should be prepared with a Current Market Analysis or CMA showing what the current market dictates as a fair price for your home. If two agents say $125,000 and the third says $150,000, think hard. It’s likely the high bid is an exaggeration to attract your business. In the trade it’s known as buying a listing. In the end, you’ll be the one who pays because the high price will scare away potential buyers before you inevitably drop the price.

2. How will they market your home? Running a few classified ads in the local paper, listing it on the Internet and holding an open house shouldn’t be the only answers. The agent should be able to talk about what kinds of people are likely buyers and how he will reach out to those specific people. Will the agent be working your listing or just doing the basics?

3. How has your business changed in the last five years? If they don’t talk about website tours and smart phones, chances are this is not a highly wired agent. While non-tech agents can still sell houses, it is getting harder. And if this is one of those people who don’t even use e-mail, you’re letting yourself in for unnecessary aggravation. And you may cut yourself off from opportunities.

4. What are the average days on the market for their listings and the percent of listing to sale price.

5. What’s your specialty? If you’re selling a starter home in a community full of young families, hiring an agent who specializes in seniors is probably a bad idea. It doesn’t mean that if he or she only sells condos that they can’t sell a house, but they may not be geared up to do the best job.

6. What are they doing for the people who’s home they are selling now? It may not be a bad thing that a high-powered agent is juggling 15 homes, but don’t expect them to give you personal service. On the other hand, be wary of an agent with no other customers because she may lack experience and contacts.

7. What do you expect of me? A good salesperson will have expectations. He may want you to leave and take the dog when the house is shown, paint the garage, move some furniture around and scrub the tile in the bathroom. It shows that he can think like a buyer and that’s a good thing.

8. What advice would you have for me if I get an offer from a buyer who wants to use an FHA or SUNYMA loan? It wasn’t very long ago when the right answer might be run the other way, but these days government-guaranteed financing from the Federal Housing Administration, the Department of Veterans Affairs and state and locally managed loan assistance programs can be key to selling a property. Real estate agents shouldn’t be pushing buyers toward their favorite lenders, but they should be able to help them and you wade through complex financing issues.

9. What’s your fee?

10. Can I talk to one of your previous clients? You never know.

I wanted to update you all on the status of the first-time buyer credit being extended.  In an nutshell, it’s close and it may be improved.  

There apparently is an agreement on the details of an expanded and extended credit.  No vote has occurred yet.  The issue is now caught up in Senate procedural matters.  However, there is optimism that it will be resolved this week.  The provision would still have to be passed by the House. 

Below are the details of the proposed new tax credit program.

*         First-time homebuyers will continue at $8,000  — same definition
as current law.

*         Tax credit for “move up” purchasers will be up to $6500

*   Must have used previous home as a principal residence for 5 of the 8
previous years.

*         Income limits increased and are the same for first-time and “move
up” purchasers : $125,000 for single filers/$225,000 for joint filers

*         Limitation on eligible home prices has been increased to $800,000

*         Time Frame:    December 1, 2009 to April 30, 2010 plus 60 day
extension if binding contract is in place by April 30, 2010

*         Anti-fraud measures have been added
 
We will keep you posted!  As always, we appreciate your support and your business referrals.  If you have any questions or comments, contact ma at: jgreiner@r-house.com