North Shore Views

Time is Running Out on Home Buyer Tax Credit!

If you are a buyer seeking to take advantage of the home buyer tax credit, you have only 60 days left to get a home under contract to be eligible for the tax credit. The deadline is April 30, 2010 to have binding contract. You then have 60 days (til June 30) to close on the transaction.

Sounds like a lot of time, but believe me, in this environment, it’s not.

First you have to sort through all the homes that meet your criteria and find THE one. Then you have to negotiate an offer. And get approved for a loan (actually, you should get pre-approved before you even start looking, so you know exactly what you can afford). This whole process can take time, so you should probably get started soon.

Here are some facts about the tax credit:

First Time Home Buyer Tax Credit = $8,000

• A first time buyer is defined as anyone who has not owned a home in the last 3 years.

• Income limits are $125,000 on a single return and $225,000 on a joint return.

• Maximum home purchase price allowed is $800,000.

Repeat Home Buyer Tax Credit = $6,500

• Buyers must have lived in their home for 5 consecutive years out of the last 8 years.

• Income limits and maximum home price are the same as for first time buyers.

• Home must be primary residence. Cannot be vacation home or investment property.

Whether or not you qualify for the tax credit, another reason to consider buying now is that interest rates are at an all time low right now and are predicted to begin rising in the next few months.

Tags: home buyer tax credit

Why You Shouldn't Wait 'til Spring to List Your Home

Typically the real estate market is pretty dead between Thanksgiving and February, so people planning to sell in the new year usually wait until after Super Bowl Sunday to put their houses on the market. But this year will likely be different. Here’s why you should get your property listed as early as you can:

1. The extension of the first time buyer tax credit and the expansion of the tax credit to existing homeowners until April 30 means that there will be a continued influx of buyers into the market during the first quarter of 2010. Buyers who want to take advantage of the tax credit will begin looking for a new home earlier, to make sure they can find a home, arrange financing and close before the June 30 deadline. Here’s a good chart outlining the rules of the tax credit.
2. Interest rates are at or near 40 year lows right now, further stimulating buyer demand. But these rates are not likely to hold for long. While there probably won’t be a big increase in rates this year, they will start to   drift upward somewhat in the next 3-6 months.
3. Because many people will follow traditional wisdom and wait to list until later in the spring, you will have less competition if you can get a jump on them. People who are willing to brave single digit temps to look at houses are SERIOUS buyers.

If you’re thinking and hoping that prices might improve  if you wait a little longer, forget it. There’s a good chance that prices still have a little bit farther to fall before stabilizing.  And, even if prices are at or near the bottom, it is unlikely that we will see any upward movement in prices until later in the year. Real estate prices don’t tend to rebound in a “V” shape but rather in a  “U” shape with a wide trough before slowly starting to climb again.

Tags: home buyer tax credit, home selling tips, when to list your home for sale