Uncle Sam Wants to Give You a Gift!

This does not happen very often, readers, and it won't last forever, so let's remind ourselves (and somebody you care about) about this fabulous program for first-time-home buyers.

If you have not owned a home in the past three years, and fall within the household income limits, you have the distinct pleasure of, and extreme joy in reducing your income tax bill by as much as $8,000 come next April 15.

The catch? You have to find, purchase, and close a home no later than the last day of November, 2009. In reality, that leaves you about two months of home shopping time before the calendar cuts you off.

Because the closing for a home purchase can be no later than November 30, 2009, your offer to purchase a home must be accepted by the seller and your mortgage application process started no less than 4 weeks prior to the scheduled closing. Unless, of course, you are paying for the property with cash, no mortgage. The timing of your actions are crucial in this process; the mortgage lenders are taking longer to get a loan approved and ready to close than they used to brag about, due to constraints recently built into the system. The major culprits in this scenario are the changes in appraisal rules and the new Truth In Lending requirements imposed on lenders. But those are for another day.

And the media has been telling you the truth; this is a WONDERFUL time to buy a home, due to the reduced values of homes in our market. In theory, if you were to purchase a home this year, and own it for at least 3 years, you have an excellent change of owning a home with vastly improved value, and thereby more equity in your financial portfolio!!

So if you have been mulling over the question of what to do about buying a home this year, are wondering if your finances allow you to secure a home of your own, let's talk about it. I can help. I LOVE helping clients save money!

Hip, Hip, Hooray! Buy a Home for Tax Breaks Today!

The potential for a revitalization of the residential real estate market has been given a tremendous boost with the passage of the American Recovery and Reinvestment Act, to be signed into law on February 17 by President Obama. Here are the criteria for earning a tax CREDIT, courtesy of Uncle Sam, meaning you actually will experience your federal income tax being reduced by the appropriate dollar amounts detailed below. Consider it a "discount."

Who? First-time purchasers only. You are a first time buyer if you have not owned a principal residence in the 3 years prior to the purchase. There is an income cap of $75,000 for individuals, or $150,000 for couples to receive the maximum tax credit. There is a phase-out above those caps up to $95,000 and $170,000 respectively. Caution - you must continue to own the home for three years, or else be required to return the entire amount of the credit when you sell the home. Ouch.

What? Any single family residence (including condos, co-ops, townhomes) that will be used as a principal residence.

When? Any principal residence home purchased between January 1, 2009 and December 1, 2009.

How? Just do it! The credit will be a maximum of $8,000 (or 10% of the cost of the home, whichever is lesser). So if you purchase a $300,000 home, and otherwise qualify for the tax credit, Uncle Sam could credit you the $8,000 (because 10% of $300,000 would be $30,000, and obviously the $8,000 is the less than $30,000).

If you have been undecided about making that home purchase until now, waiting to see what Congress would do, wait no more. Contact a local Realtor and start your search right away. Realistically, you have 9 1/2 months to find, negotiate, and close on a home.

I will be watching industry news reports on the trend of homes going under contract over the coming weeks and months, looking for a positive turn in home sales. Stay tuned.