Irvine Real Estate Blogger

$8000 Federal Tax Rebate Updated

First-time home buyers and move-up buyers have another great reason to get off the fence, pre-approved and on the road to purchasing a home! The benefit to first-time homebuyers is a tax credit up to $8,000 and for move-up buyers a tax credit up to $6,500. But this opportunity ends in April.

• Between November 7, 2009 and April 30, 2010, homebuyers that have a signed binding contract to purchase a home may be eligible for the tax credit. The transaction must close no more than 60 days after April 30, 2010.
• First-time homebuyers may receive a credit of 10 percent of the purchase price, up to the $8,000 tax credit amount. If you have never owned a home before or have not owned a principal residence in the last three years, you are considered a first-time homebuyer.
• For home-owners, a tax credit of $6,500 is available for homeowners who have lived in their current residence for at least five of the past eight years. Homebuyers can also receive a 10 percent credit up to $6,500 when they contract to purchase a home between now and April 30, 2010, provided they close no more than 60 days after this deadline.

The tax credit does not have to be repaid provided you live in the new home for a minimum of three years. Military families are exempt from this stipulation.

For an exhaustive and detailed Q & A by Sonia M. Younglove, Esq., see the latest California Association of Realtors extensive article on this subject.

The recently enacted American Recovery and Reinvestment Act of 2009 or ARRA, commonly referred to as “The Stimulus Bill,” created a tax credit for first time Home Buyers. Most first time home buyers wonder what the specific qualifications are for this $8,000 tax credit. Below are six steps to determining your eligibility:

1. Who is a First-Time Buyer? The bill defines a first time home buyer as anyone who has not owned a property/home/real estate for the past three (3) years.

2. How does the Tax Credit Work? The tax credit is received when you file your taxes the year after your home/real estate purchase. In other words, the first time home buyer does not receive any cash at the time escrow closes, nor does the 1st time home buyer receive any assistance with closing costs through the escrow. Instead it is added to any refund you would be due on your taxes in the year following your home purchase.

3. Can I Receive theTax Credit of $8,000 Even If I Owe No Taxes?: You, as a first-time home buyer, can still qualify even if you own little or no taxes. (more…)

Photo Courtesy of NBC.com
The buzz in home purchases/sales revolves around distressed properties these days–namely, REO’s or bank-owned homes. If there is one story that peaks a buyer’s interest, it is the REO home market. The reason is simple enough: the buyer believes that REO’s equal great deal or steal. But are bank-owned homes the real deal? Let’s take a closer look:

If you happen to be a first-time homebuyer or a novice in terms of the homebuying process, an REO (Real Estate Owned) home or bank foreclosure requires seeking the assistance of a knowledgable real estate professional. At first blush, the pricing may look enticingly attractive.

In her article entitled “Foreclosure Sales And Pretend Pricing,” Kris Berg of The San Diego Home Blog writes that the “pretend pricing method or (PPM) is an entirely different and oft-mysterious approach to the whole conundrum of determining what the market value really is for a home. Once a lender has foreclosed on a home, the PPM comes into play.”

Foreclosures are often priced 20-30% below a “regular sale”–that is a home that actually has equity in it and is not over encumbered or “under water”, so to speak. That said are REO homes real deals or not? Most home foreclosures are priced way under the market just to create hype. Welcome to the wild west side of the home pricing market. These properties will garner multiple offers with the final sales price often thousands of dollars above the original asking price. Not only does this breed disappointment, disillusionment and frustration among buyers who are looking to own and occupy the property, but these homes typically will sell to the highest bidder who also has a large cash down payment. (more…)