Real Estate Information Archive

The IRS has clarified what documentation is needed to claim your first time buyers and move-up buyers tax credit.

You are still required to fill out a 5405 form but is NOT requiring all buyers and sellers to sign the HUD-1 settlement statement. If you live in an area where it isn't common for the all parties to sign the HUD-1 its OK.

The IRS says: " in areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return."

So if you live in Southern California where it’s uncommon for buyers and sellers to sign the HUD-1 make sure you the buyer(s) sign your HUD-1 statement before mailing it in with your tax return.

If you are a move up buyer or repeat buyer, the IRS is requiring documentation that proves you lived in your last home 5 of the last 8 years. Items the IRS will consider as proof are: tax records, mortgage interest statements, and home owner’s insurance records.

Median prices in So Cal are on the rise compared to a year ago January 2009. The Orange County and Los Angeles home sales markets improved significantly while Riverside, San Bernardino, and Ventura took a hit again.  Orange County was up by 3.4% in sales over January of last year for a total of 1,867 home sales. The Big new is prices rose 15.4% over January 2009 in Orange County. San Bernardino County is the only one where prices in homes dropped another 7.4% while prices remained the same in Riverside County with no gain over last year.  Over all the six counties home prices rose 8.6% over January of last year.

Now if you have been sitting on the fence to take advantage of the bottom of the market you better find a home NOW! With all the counties experiencing increases in home values except in San Bernardino County waiting for the right moment is over.

The $8,000.00 tax credit runs out the end of April 2010.

The federal tax credit for home buyers was signed into law by President Obama Friday, Nov. 6.  The tax credit, which was set to expire Nov. 30, has been extended through April 30, 2010 with a 60-day extension if a binding contract is in place prior to deadline.  It also was expanded to include existing homeowners who have lived in their primary residences for five consecutive years out of the last eight years.

First-time home buyers still may be eligible for a tax credit of up to $8,000, while existing homeowners may receive a credit of up to $6,500.  The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

The federal tax credit for home buyers was signed into law by President Obama Friday, Nov. 6.  The tax credit, which was set to expire Nov. 30, has been extended through April 30, 2010 with a 60-day extension if a binding contract is in place prior to deadline.  It also was expanded to include existing homeowners who have lived in their primary residences for five consecutive years out of the last eight years.

First-time home buyers still may be eligible for a tax credit of up to $8,000, while existing homeowners may receive a credit of up to $6,500.  The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to latest survey. The Pending Home Sales Index rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5. Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected time frame. The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.

Qualifying for a jumbo loan—those with loan amounts higher than the conventional conforming loan limit of $729,750 in high-cost areas—is more difficult than it was a few years ago.

While rates on jumbo mortgage historically have been higher than rates on conforming loans, jumbo loans still are available, but often come with stringent underwriting requirements. Prior to the credit freeze, borrowers of jumbo mortgages could qualify for loans with a 5 percent down payment, credit scores of 620and enough money in the bank to cover two months of payments. Now, borrowers typically must have six months’ reserves, a 700 credit score, and a down payment of at least 20 percent.

December 1,  the Federal Tade Commission has required all prerecorded telemarketing calls to include a "quick and easy" opt-out system to stop future call by the company. Typically for calls you answer, that means saying a certain word or press a number. Message left on your voice mail must have a toll-free number that connects to an automated opt-out system. Any prerecorded sales or fundraising calls that do not meet these criteria are subject to fines. File complaints at www.ftcomplaintassistant.gov or call 1-877-382-4357 toll-free.

Electric Dryer Vs Gas Dryer.

Consider switching to a natural gas clothes dryer, which is typically less expensive to operate than electric dryers, often by as much as 50 percent.

This article of was worthy of re-posting from Realtor Magazine Online. Important information for buyers! Jim C 

Daily Real Estate News  |  May 29, 2009  | 

FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.

There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.

In addition,  some state house finance agencies have developed their own tax credit bridge loan programs (None in California yet), so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Learn more about the credit, including how to apply for it this year even if you've already filed your taxes, at REALTOR.org.

Source: Robert Freedman, REALTOR® Magazine Online

Buyers have an opportunity to save big between March 1, 2009 through December 31, 2009. The State of California is offering a $10,000 credit for newly built homes. The property will have to be your principal resident and you will have to live in it for 2 years or you WILL have to repay the tax credit.

Plus the Fed is offering a $8,000 tax credit and you take advantage of both the State & Fed tax credit for a total savings.$18,000 don't miss this one time opportunity.

If you are buying a resale home you still can take advantage of the Fed credit until the end of the year. I wouldn't wait much longer before buying a home in the last 3 months distressed homesellers down 16% over the last 3 months. The amount of distressed homes keeps reducing either by loan modification of resale home sale.