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credits (3)

Good News for Buyers in California!

Posted by Jan Baron, RDCPro, CSP, BPOR on May 10, 2010 at 4:29pm
New Home Credit and First Time BuyerCredit of $10,000 goes into effect May 1, 2010. $100 million isallocated to the New Home Credit and $100 million to the First TimeBuyer Credit.

The very popular New Home Credit in 2009 ran out ofmoney quickly. It generated so many sales that it was re-introducedagain this year along with the First Time Buyer Credit. The money for the First-Time BuyerCredit is expected to run out much faster than the New Home Credit thisyear.

Theeligible taxpayer who purchases a qualified personal residence onand after May 1, 2010, and on or before Dec. 31, 2010, or whopurchases a qualified principal residence on and after Dec. 31,2010, and before Aug. 1, 2011, pursuant to an enforceable contractexecuted on or before Dec. 31, 2010, will be able to take theallowed tax credit. The credit is equal to the lesser of 5 percentof the purchase price or $10,000, in equal installments overthree consecutive years. Under AB 183, purchasers will be required tolive in the home for at least two years or forfeit the credit(i.e., repay it to the state).

HOWEVER...this money willgofast. The $100 millionallocated for California's first-timehomebuyer taxcredits may be depleted in about 20 days or sooner. Thetotal tax credit allocation for all taxpayers is $100million for first-time homebuyers and $100 million for new homes, bothon a first-come, first-served basis.

For an update on howmany applications have been filed and for the dollar amount, watch thissite: http://http://www.ftb.ca.gov/individuals/new_home_credit.shtml
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Once in a Generation Opportunity!

Posted by Jan Baron, RDCPro, CSP, BPOR on April 12, 2010 at 4:18pm
This month only, California only, first time buyers can receive an$18,000 tax credit if they make an offer on a home and it is acceptedbefore April 30, 2010. The federal tax credit of $8,000 is set toexpire April 30, 2010. The California tax credit just began and will bein effect until July 31, 2011. So, for this month only, first timebuyers can benefit from an $18,000 combined credit.

I get asked bybuyers.."will they extend it?" The word I hear from D.C. is that theFeds are NOT going to offer the tax credit again because it didn'tencourage home buying by much.

In California, however it wasvery successful last year and funds alloted ran out quickly. It was sosuccessful that California is offering it again. For this small windowof opportunity, wouldn't it be great to take advantage of BOTH thesecredits, low interest rates, and low priced homes??

And, it's notjust for first time buyers. Current homeowners qualify for $16,500 incombined tax credits and they don't need to sell their current home!But for this month only.

The clock is ticking.....
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Buyers Need To Be Truely Qualified

Posted by John Accornero on December 4, 2009 at 5:32pm
The FHA is catching up to the where the market place currently is. YOU NEED TO BE QUALIFIED TO BUY A HOME.It still surprises me when I get a new prospect and give him an initial assesment and they say that they either don't have a job right now or they have a minium wage job or no money in the bank.Right now, although you can get a loan with 3.5% down, your offer is seldom accepted anyway because there are better qualified buyers with more money to put down and therefore present less risk that they will lose their home. Agenys have a rsponsibility too to be sure their buyers can afford a particular home...recently I had a client that wanted to know what the payments would be on a particular home, after I told her , the mom which is helping her started to question how they could pay that type of payment on her daughter's income (daughter's husband does not work), after discussion, we agreed we would look at a lower price point of home. Makes me wonder how Wells Fargo preapproved her for that higher amount in the begining!The FHA will soon require a 5% minimum down. Yes, it will eliminate some buyers from the marketplace, but those buyers will have a hard time getting anything at the minimum level anyway. Buyers will also have to have a better credit score from a minimum of 580 all the way to 620. The thing we are missing though is that most banks want at least a 680 anyway, so again, the marketplace has thinned the weak out already. You need to see also that many listings specify already that they want credit reports and financial proofs. Yes, too they look at the size of the downpayment as well. THE MARKET IS ALREADY THERE!The downside to this that credit repair will start to flourish and people will once again get sucked into a scheme that produces little or nor results. We saw what happened with loan mod business in California. That business has now tanked. They are now barred by the California Department of Real Estate from taking upfront fees. Most credit repair and loan mods can actually be done individually as the techniques are fairly simple...just time consuming!The extension of the homebuyer credit for first time buyers ($8000) and buyer/sellers ($6500) will help to have a decent real estate market into the spring but again like others have said, this is just a band-aid and will cost future generations somehow. These credits in my opinion have caused price inflation that actually discourages buyers, not to mention potential appraisal issues. Imagine going to the store on black friday to get a $99 patio heater only to be disappointed and dismayed when you get to the check out that it now costs $199 because everyone wants one. I even get feedback on a Broker Price Opinion (BPO) that they don't believe me when I say the market is depressed...it still is and the financial powers are just manipulating the market to keep things from "sinking" too fast. Yes, we have price apprieciation, but it is artificial, until the economy is healthy once again.Let's all be responsible players in the real estate arena.
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