April Issue
There’s Still Time To Claim Up To An $8,000 Tax Credit On A Home Purchase
The federal homebuyer tax credit is set to expire at the end of April, but there’s still time for first-time homebuyers, and even existing homeowners, to take advantage of this substantial incentive to purchase a home.
First-time buyers may qualify for as much as an $8,000 credit, and buyers who already own a home can claim up to $6,500, providing they sign a binding purchase contract on or before April 30, 2010 and close by June 30, 2010.
Remember–these are tax credits, not simply tax deductions, so they reduce the amount of federal income tax owed dollar-for-dollar.
Special rules apply for U.S. military personnel, members of the Foreign Service and employees of the intelligence community, who have an additional year to buy and close if they are on a period of official extended duty.
The credits apply to the purchase of a principal residence. Buyers may qualify as long as their income doesn’t exceed $125,000 for single buyers or $225,000 for married couples. The tax credit is equal to 10 percent of the home’s purchase price, up to $8,000 for first-time buyers, or up to $6,500 for move-up or downsize buyers.
It’s important to remember that “first-time buyer” does not necessarily mean someone who has never owned a home. Under the law, a buyer is eligible if he has not owned a principal residence during the three-year period prior to purchase.
The tax credit, combined with historically low interest rates and an appealing inventory of available homes, has created a unique opportunity for buyers who have been waiting for the right time to jump into the market. But that opportunity will expire on April 30.
For more information about the tax credits, or to learn about available properties in your area, contact Nancy Orlando today.
*This is not meant to be tax or legal advice. Consult a tax professional for details.
Buyers’ Negotiating Power On the Upswing
Great news if you’re looking to purchase a home: For the second month in a row, real estate Web site Zillow.com is reporting that in January, homebuyers across much of the U.S. negotiated larger discounts off the listing price of homes than they did the prior month.
Buyers in the United States paid 2.8 percent less than the last listing price in January – more than the 2.7 percent discount in December and 2.6 percent in November. December was the first month in which buyers actually regained negotiating power; during most of 2009, buyer discounts shrank.
A year ago, in January 2009, buyers were able to negotiate a median 4.5 percent off the last listing price of homes for sale.
According to Zillow, the biggest discounts are in Florida – Vero Beach and Punta Gorda yielded discounts of 8.6 percent and 7.4 percent, respectively – while Toledo, Ohio and Flagstaff, Ariz. ranked high as well. But discounts can be had all over the nation. New York, N.Y. buyers got 5 percent off the last listing price in January, Chicago, Ill. buyers got 5.1 percent and Cleveland, Ohio buyers got 5.8 percent.
Sellers did well in some markets, however. Most buyers in places like El Centro and Stockton, Calif., for example, actually paid more than the last listing price of homes sold in January.
Cities With Rising Home Prices
Despite all the talk about falling home values, prices aren’t dropping everywhere. According to Forbes, Lexington, Mass. saw list prices rise 36% last year. Other cities with gains include Bay Village, Ohio (32%), Sunnyvale, Calif. (32%), Poway, Calif. (27%) and University City, Mo. (26%).
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Nancy Laggis Orlando