Homebuyer Tax Credit Expanded! Plus--New Tax Credit for Existing Home Owners!

It’s official!
President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. In addition, the extension also opens up opportunities for others who are not buying a home for the first time. To help you understand what the new tax credit details mean to you and your clients, I’ve put together a concise overview of the new tax credit deadline, income caps, and more.
Tax Credit for HomebuyersFirst-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction.It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Maximum Purchase Price Qualifying buyers may purchase a property with a maximum sale price of $800,000.

November Housing Update

As of November 3 in The Forge:

FOR SALE: 16 homes, $249,9K to $344K
--2 homes are 4 bdrms
--4 homes are 3bdrm/2 baths
--10 homes are 3bdrm/1 bath

UNDER CONTRACT: 10 homes
-- 6 homes are 3bdrm/1 bath $220K to $307K
--3 homes are 3bdrm/2 bath $300K-$349.9K
--1 home is 4bdrm/2 baths $335K
SOLD since October 1: 8 homes
--6 homes are 3bdrm/1 bath; actual sold prices from$265K to $307K (5 w seller contributions)
--1 home is a 3bdrm/2 bath sold for $290K
--1 home is a 5bdrm/4 bath sold for $445K

Average Days to put a house under contract in Rodgers Forge : 32 days!

Based on homes currently under contract.

Note: In the last 4 month period since July 1, 2009, out of 31 homes that have sold:

--1 home sold over asking price

--3 homes sold at the asking price

--18 homes sold within $10,000 of the asking price.

Questions about the market or your home? questions about the first-time homebuyer tax credit extension? Call me or post to my blog.