March 2010
Homebuyer Tax Credit Extended in California
March 25, 2010 by Jane Peters · Leave a Comment
The homebuyer tax credit has been extended in California. Governor Schwazenegger signed the bill providing $200 million dollars in home buyer tax credits.
The bill provides $100 million for first-time home buyer who buy existing homes and $100 million for home buyers who buy new or previously unoccupied homes.
To qualify you must close escrow between May 1 and December 31, 2010. Or, if you were under contract on or prior to December 31, 2010, you still qualify if it is your principal residence on or after December 31, 2010 or before August 1, 2011.
The amount of the tax credit is equal to the lesser of 5% of the purchase price, or $10,000, whichever is less and is a credit against tax, taken in three equal amounts over three consecutive years.
Purchases must live in the home as their principal residence for a minimum of two years or forfeit the credit. It will have to be repaid to the state.
This is an arms-length transaction and the buyer cannot be related to the seller. Also, the minimum age of the buyer is 18.
The definition of first-time buyer is someone who has not owned a property in three years.
More information on the Bill – AB 183
If you are buying a home in Los Angeles, then now is definitely a good time to buy.
First Time Homebuyers – How to Buy a Home
March 21, 2010 by Jane Peters · Leave a Comment
I realize that many first-time home buyers don’t know what is involved in the buying process, so I have itemized below the main points with which you may not be familiar:
- Are you aware that you do not pay your Buyer’s agent a commission? This is paid by the Seller. All the more reason to use an exclusive buyer’s agent who will be looking out for your interests and walking you through all the negotiations.
- Making your first offer can be scary. However, the purchase contract is designed to protect you by setting contingency periods that you need to meet in good faith. But, if you cannot, through no fault of your own, meet these time-frames, then you can cancel the contract. The main contingencies are:
- Loan and Appraisal – generally 17 days, and
- Inspection – also 17 days.
- If you are unable to receive a loan, the property does not appraise, or are unhappy with the inspection report, and the Seller will not make any concessions, then you can walk away from the deal, and your good faith deposit will be refunded.
- Once you have removed all your contingencies, however, then your deposit funds become hard.
- The purchase contracts are mostly standardized and your agent will walk you through the parts that can be customized to your requirements, the main ones being:
- Length of escrow period.
- Length of contingency periods (loan, appraisal and inspection).
- How much home warranty plan to purchase and what it shall include.
- What items you would like to request that the Seller leave, etc. fridge, washer/dryer, etc.
- Your agent will assist you with finding a home inspector and help you understand the report once delivered. He or she will also help you decide whether to hire additional inspectors based on the first report. They will also help you draft a “Request for Repairs” should you so wish.
- Your agent will work with your lender to ensure that things move forward in a timely manner as much as possible. They will also follow-up with the listing agent to make sure that you receive all the required disclosures due from the Seller. These are important as the Seller has to disclose everything they know about any faults the house may have.
Basically, the escrow process is quite straightforward, at least it should be if you are working with a capable agent who is representing your interests. The information above is a pretty basic overview of that process. I you would like a more detailed description, please do not hesitate to contact me and I will provide you with a step-by-step guide.
It Pays to Buy Now
March 19, 2010 by Jane Peters · Leave a Comment
Grab this opportunity to take advantage of the home buyer tax breaks which expire at the end of April
Little time remains for you to take advantage of the Federal Home Buyer Tax Credit. Along with high affordability and low mortgage
rates, tax incentives make now a great time for first-time and repeat buyers to purchase real estate. It also presents a good opportunity for sellers. Now is the time to make sure your home appeals to motivated buyers.
First-time Buyers
If you have not owned a home within the last three years, you may be eligible for a tax credit of 10% of the purchase price of your first home, up to $8,000. The tax credit program has some additional incentives for those who purchase another home. You may be eligible for a tax credit up to $6,500 if you have owned and occupied your current residence for five consecutive years during the last eight years.
Repeat Buyers
The tax credit program has some additional incentives for those who purchase another home. You may be eligible for a tax credit up to $6,500 if you have owned and occupied your current residence for five consecutive years during the last eight years.
Other Eligibility Requirements
There are limits on the highest income you can earn and still be able to qualify for the full amount of the tax credit. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this, but less than $145,000 can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap, but less than $245,000 can also receive a partial credit. Qualifying buyers may receive the tax credit for properties with a maximum purchase price of $800,000.
Why Use a Real Estate Agent to Buy a Home?
March 6, 2010 by Jane Peters · Leave a Comment
Buying a home is not simply a matter of walking into a house and making an offer.
There is so much that goes on behind the scenes that you need your own personal agent. Only this agent does not take his or her 10%. You have the benefit of someone guiding you through the process for absolutely free!
This is what your real estate agent will do for you:
Provide you with a market analysis to determine the value of the home. This is done by researching comparable properties that have recently sold in the area. They will also look at your competition, homes on the market or in escrow. Those homes that have been sitting for quite a while are most probably over-priced and the ones that went into escrow quickly should be well-priced. This information will give you a basis for your offer.
Prepare a strong offer which shows your genuine interest in purchasing the property. This will be reflected in terms and conditions that will be attractive to the Seller and reasonable to you, the buyer. You need to ensure that you are protected and know to what you are entitled. Your agent will also submit proof that you are financially qualified to buy the property, having worked with you on getting your pre-approval from a lender and proof of funds. No Seller is going to accept an offer in this market from someone who does not demonstrate their financial viability.
Negotiate on your behalf with the Seller’s agent. Your agent will present you in the most positive light as someone who is really motivated and able to purchase the property. This is also a business of human connection. The Seller may be, and often is, still attached to their home and will want to know that the new owner is going to take care of it as they did. This can all be part of the negotiations which your agent is doing on your behalf.
Manage the process after your offer is accepted. There are several contingencies that a buyer has to meet during the escrow period and a mountain of paperwork that has to be filled out correctly. Your agent will guide you through this process and ensure that all your concerns are addressed, inspections fully satisfied and contingency periods met.
How do you feel about managing this yourself? And why would you?
