Real Estate Information Archive

Congress has now passed new legislation that extends and expands the home buyers tax credit. The bill extends the First Time Home Buyer Tax credit of up to $8,000 to first-time home buyers until April 30th, 2010. The bill will also expand the tax credit to included current home owners purchasing a new or existing home between November 7th, 2009 and April 30th, 2010.

To qualify for the extended First Time Home Buyers Tax Credit purchasing between November 7th, 2009 and April 30th, 2010 purchasers and/ or their spouse may not have owned a home in the past three years prior to purchase. To qualify for the expanded tax credit current home owners purchasing a home between November 7th, 2009 and April 30th, 2010 must have used the home being sold as a principal residence 5 consecutive years out of the last 8 years.

Who Qualifies for the Extended Credit?

·     First-time home buyers purchasing homes between November 7, 2009 and April 30, 2010 qualify for the extension.

·     Current home owners purchasing a home between November 7, 2009 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 qualify for the expanded tax credit.

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.

What Properties Are Considered Eligible for the Tax Credit?

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 allowable credit for current homeowners is $6,500.

How Much is the Tax Credit?

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

1.     The price of the home.

2.     The buyer's income.

Price

The Extended Home Buyer Tax Credit has a limit on eligibility of homes that are purchased for $800,000 or less.

Buyer Income

Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit  under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009.These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.


What If the Buyers Income Exceeds The Limits? Is there still a Credit?

Yes, in the case of exceeding income limits, some buyers may still be eligible for the credit.

The credit is decreased 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 the buyers  income approaches the maximum limit. Home buyers that earn 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 the Buyer Closes After April 30, 2010?

The Extended Home Buyer Tax Credit allows for a closing after April 30th 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.

Chart Highlighting the comparision between the prior tax credit and the extended and expanded tax credit

Frequently Asked Questions

Source: NAR 2009

The latest Kingwood Housing Trends eNewsletter is now ready to view. Published monthly to offer you up-to-date real estate information.This edition is filled with local and national market updates provided by the National Association of Realtors, the U.S. Census Bureau and other sources. Information includes key market indicators, real estate sales and price statistics, a video report by Stewart Title's Chief Economist, commentary(blogs) by top real estate economists, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

Everything you need to stay in touch with today's real estate market.

It's back to school time and kids and parents are busy trying to get organized to start the school year prepared. Kids are typically concerned with buying the right outfit while parents concentrate on making sure their kids have the proper supplies for their classes.

Check your local school website for a school supplies checklist. If your school doesn't offer this list online, below is a basic list, as provided by GreatSchools.com, to help you get started.

Elementary School

• Glue sticks  
• Scissors
• Ballpoint pens
• No. 2 pencils
• Colored pencils
• Pencil sharpener   
• Large pink eraser  
• Box of crayons   
• Drawing paper
• Construction paper
• A ruler with English and metric measurements
• School box   
• Kleenex
• Small bottle of hand sanitizer
• A backpack (Check out GreatSchools.com article, Tips for Buying a Backpack and Carrying Safely, about choosing the right backpack)

Middle-School and High-School

In addition to the basic school supply items, children in middle and high school may be required to purchase the following:

• A calendar for time-management and for scheduling assignments
• 2 combination locks   
• Binder dividers  
• Several 3-ring binders
• Folders to fit into binders
• A small notebook to record assignments
• Pencil case to fit into binder
• Pens
• Index cards, ruled and unruled
• Calculator (Check with your teacher first for type and model)

Don’t forget to visit GreatSchools.com for a more complete list. Happy shopping and have a great school year.

My Kingwood Housing Trends eNewsletter is now ready to offer you up-to-date real estate information. It is filled with market updates provided by the National Association of Realtors, the U.S. Census Bureau and other sources. Information includes key market indicators, real estate sales and price statistics, a video report by a nationally recognized economist, commentary(blogs) by top real estate economists, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

Everything you need to stay in touch with today's real estate market.

Purchasing a home is one of the biggest investments you will make in your lifetime, and it can also be one of the most stressful. By having a home inspection it can help to ensure that the quality of your potential home is in good condition and help to eliminate surprises by making you aware to any problems.

So how do you go about selecting a home inspector?    One good way to start is one of the two nationally recognized professional associations for home inspectors; the American Society of Home Inspectors or The National Association of Home Inspectors.   In order to be listed with either of these organizations one has to go through a certification process. Both of these have a search engine to help you find “state certified home inspectors.”  Once you have a few names it doesn’t hurt to check with the Better Business Bureau.  Make a list of inspectors that have been recommended.  Avoiding anyone who has a negative report can help you avoid any potential problems with your inspection. 

A few things questions to ask when talking to your potential home inspector:

• What is the inspector's experience? How many years have they been in the business and how many inspections do they do a year?
 
• Exclusively inspections? Beware of contractors who do house inspections "on the side"--they may be looking for work and this isn’t necessarily what you want.

• What type of report? Will it be written or oral or both? Will the report contain suggestions for remedying deficiencies?   Preference should always be to get it in writing. When will the report be ready?

• How long will it take? Depending on the size of the house an inspection should take between 2 and 4 hours.

• What will be included in the inspection?

• What certifications do they have? Are they ASHI or NAHI certified?

In today's real estate market every homeowner is asking the same question - What is the value of my home?  Lorna Calder of RE/MAX Associates Northeast says that this is probably the number 1 question a homeowner will ask.  Most homeowners are not sure how to determine the value in a changing real estate market.

Being informed and know what your home will sell for today will should be the first step in preparing to sell your home.  A home is worth what someone will pay for it, and what someone will sell it for - this is 'Market Value'. Everything else is an estimate of value. To determine a property's value, most people turn to either an appraisal or a comparative market analysis.

An appraisal  is a licensed / certified appraiser's opinion of value and is an estimate based on amenities, energy efficiency, and the quality of the of the value of a home at a given point in time. To make their determination, appraisers consider recent sold comparables, square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account.

The list price is the price tag put on a house in a real estate listing; it usually is only an estimate of what the seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions such as location and condition.

A seller may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.

The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors. Lenders require appraisals as part of the loan application process; fees can range from $200 to $375. Appraisers use several factors when estimating value including historical records, property performance, condition of the home and indices that forecast future value.

Market value is what price the house will bring at a given point in time and is defined as the amount that a willing seller will sell the property for, and the amount a willing buyer will pay - a meeting of the minds so to speak. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Because brokers and agents are not state-certified appraisers, they may not perform appraisals in most states. Instead, they estimate the value of a property using a CMA.

In some states you can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder's or assessor's offices, through private companies or on the Internet. Texas is a "non-disclosure" state, this means that real property sales prices are not a matter of public record. Sold comparable information can be obtained by your real estate agent through the CMA process or through tools provided by real estate agents like Market Snapshot. Neither of these services produce official appraisals. They also don't factor in market nuances or other issues a certified appraiser or real estate professional might in assessing the value of your home.

Your mortgage rate is on the list as one of the most important factors to consider when buying a home. Obviously the lower your rate the less you have to pay back.  Locking in a low mortgage rate in a market that is fluctuating up to a full point over the first half of 2009 will be critical.

What does it mean to 'lock' in a rate?

Locking your interest rate down means that the broker or banker will give you a commitment for a loan at today's current rate (typically for 30-60 days). While locking in your rate before you are ready to close puts you on a time table, it  lets you know upfront the points and terms that you will be buying under.  Some rates can be locked for 15 days and some for up to three months.  You still need to buy before that rates terms expire.  Otherwise you will be back to negotiating a rate and everything else.

A few things you need to do before locking things in:
• Shop around:  your rates and terms may vary wildly from lender to lender and rate locks can be a serious cost.  Don’t be afraid to shop before you lock that rate.
• Make sure you allow for loan processing time in your lock period and be sure to be ready to put in that loan application before the terms will expire.  This includes checking credit reports and even a pre-approval can help.

As with everything it is important to get it in writing.   The contract has to lock the interest rate, the points, terms and other costs.  It must include the names the mortgage will be in, the cost of the lock the terms as well as the effective date and its expiration date and time.  If you have any post-lock options make sure they are included in the contract.

Keep in mind that even a half a percent fluctuation can cost you thousands of dollars.  If you lock in your rate you can be better prepared for what the bottom line of your mortgage will be.  With an uncertain market, this can only help!

As a first time home buyer you can now take advantage of the new tax credit being offered.  This is called the Housing and Economic Recovery Act of 2008.  This Act includes a number of provisions that will help prevent foreclosures and reinvigorate the housing market as well as strenghten the nations economy.

As a first-time home buyer you can take advantage of the 2009 Tax Credit.  Visit 2009 Tax Credit FAQ's for more information. 

Do let time slip by.

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.