$6,500 Tax Credit for Move-Up/Repeat Home Buyers

March 30, 2010 By Michael Koenig

Just a reminder, you do NOT have to be a First-Time home buyer to capitalize on the Fed’s tax credit!

If you are a Move-Up, Repeat or Second-Time home buyer, you may be eligible for up to $6,500 in Tax Credit’s from Uncle Sam.

Here are some of the details:

Who is eligible to claim the $6,500 tax credit? Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
What is the definition of a move-up or repeat home buyer? The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
How is the amount of the tax credit determined? The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
Are there any income limits for claiming the tax credit? Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is “modified adjusted gross income”? Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and the first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.

Filed Under: Buying A Home

$18k Tax credit for California Home Buyers! how…

March 24, 2010 By Michael Koenig

This is big news for home buyers in California!

The credit will apply to first-time buyers who purchase new or existing homes between May 1 and Dec. 31 of this year. It is for 5 percent of the purchase price, or up to $10,000.

Governator Schwarzenegger is expected to sign it into law soon.

Want to hear something REALLY crazy? It may be possible to combine this credit with the Federal Tax credit of $8,000, enabling a home buyer to potentially capitalize on up to $18,000 in tax credits! Wow! It’s a narrow window of opportunity: you would need to be officially in a contract by April 30, 2010, but close between May 1, 2010 and June 30, 2010.

If the extended tax credit follows the same guidelines as the previous tax credit (which ended in August 2009), here are the basic requirements:

Must purchase the home between May 1, 2010 and December 31, 2010.
Purchase date is the date escrow closes.
The home must be the principal residence of the home buyer
Home must be occupied by the taxpayer for a minimum of two years

There are additional requirements…and we’ll post them as soon as we get them from the top.

I thought we beat the horse to death already…but it’s time to prop it up for further beating…

UPDATE: We discuss this topic on Episode 15 of the podcast RealSpeak.tv

UPDATE #2: I hate to sound like a late-night infomercial, but we can’t stress enough how urgent and quickly you need to act in order to capitalize on this (we didn’t set the timeline; Uncle Sam and Uncle Schwarzenegger did .

Contact us ASAP to get the ball rolling!

Use the Quick Contact Form to the Below, or call (510) 270-2201. (In the meantime, checkout the Foreclosure Listings at the top of the page for homes available in the areas you’re interested in)

Filed Under: Buying A Home, News Tagged With: $200 million, AB 183, Caballero bill, california tax credit, federal plus california tax credit, Federal Tax Credit, First Time Home Buyer Tax Credit, governer, Not deduction, Schwarzenegger

Foreclosure Auction on the County Courthouse Steps

March 22, 2010 By Michael Koenig

Foreclosure Auction on the Courthouse Steps, Oakland, CA

We made a little field-trip to the Alameda County Courthouse in Oakland, California. Today was simply another day on the steps of the courthouse. There were about 110 properties scheduled for the sale. However, after all was said and done, I think only ONE property was actually sold to a high bidder

What happened to the other properties?? The majority were either canceled or postponed (usually due to an agreement between the borrower and lender) or due to bankruptcy. The rest, simply failed to receive a single bid, which then causes the property to become a Bank Owned property or REO.

Here’s a little video clip of the event.

Look for a follow-up post regarding this auction…and what I REALLY think about them.

: Foreclosure Auction on the Courthouse Steps, Oakland, CA

Filed Under: Buying A Home, Foreclosure, News, Oakland, Real Estate Tips, REO, Video Clip Tagged With: video

Mortgage Rates Set to Rise in 2010

March 19, 2010 By Michael Koenig

Historical Mortgage Rate Chart

Is it time to rush out and buy a house before mortgage rates go up?

Some analysts believe mortgage rates will jump to around 6% by year end from 5% in recent weeks, while others see only a slight increase. As the Federal Reserve winds down its intervention in the mortgage market, rates on home loans are generally expected to rise at least modestly during the rest of this year from today’s unusually low levels.

Meanwhile, federal tax credits available for some home buyers are due to expire at the end of April, adding to the sense of urgency many shoppers feel.

“I’d hate to miss out on really low [mortgage] rates” or the tax credit, says Jennifer Hale, a veterinarian who is looking for a new home near Minneapolis with her fiance, Lawrence Nystrom.

If rates do go up sharply, that will have a big effect on home buyers. Richard Redmond, a mortgage adviser at All California Mortgage in Larkspur, Calif., offers the example of a couple with combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month. At a 5% mortgage rate, he figures, the couple could qualify for a loan big enough to buy a $590,000 house, assuming a 20% down payment. At 6%, that would fall to $540,000.

Since late 2008, 30-year fixed-rate mortgages have been available for people with strong credit records at around 5%, near the lowest levels since the 1950s, thanks to the Federal Reserve’s heavy purchases of mortgage securities. At the end of March, the Fed is due to stop buying the securities. Most mortgage analysts think the immediate effect of the Fed’s withdrawal will be modest.

Filed Under: Buying A Home, News, Real Estate Tips Tagged With: Chart, Graphic, Mortgage Rate

California Home Mortgage Protection Program

March 17, 2010 By Michael Koenig

Did you buy a home after April 2009? Or do you plan on completing a purchase this year before July 2010? If so, then you may qualify for a little extra peace of mind.

Due to popularity and demand, the California Association of Realtors (C.A.R.) has extended their Mortgage Protection program to June 30th.

What are the benefits, and how much does it cost? It’s dead simple: Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage. And the cost? NOTHING, other than the cost of the home you just completed!

Here are the basic qualifications:

Be a first-time home buyer – someone who has not owned property in the last three years. (includes co-buyer).
Open escrow April 2, 2009, or later, and close on or before June 30, 2010. (purchase agreement cannot be dated before April 2, 2009)
Use a California REALTOR® in the transaction (fee for referral does not qualify)
Be a W-2 employee (cannot be self-employed)
Purchase the property in California
To qualify for the program applications must be received within 30 days of closing escrow

Do you qualify (or will)? If so, what are you waiting for! Contact me for assistance and Download the Revised MPP Application followed by a list of Frequently Asked Questions.
( This must be submitted by an active California REALTOR®, such as me)

Filed Under: Buying A Home, News, Real Estate Tips Tagged With: C.A.R., H.A.F., Housing Affordability Fund, Mortgage, protection

January 2010 California Foreclosure Report

March 15, 2010 By Michael

I couldn’t have said it better myself. In January 2010 we saw that despite apparent declines in foreclosure filings, daily foreclosure activity is up on all fronts as the foreclosure stalemate continues. Publicly reported figures are not always the ‘whole’ truth.

Sean O’Toole from ForeclosureRadar.com put’s together a great market report which reveals the other half of the truth. Check it out!

January 2010 California Foreclosure Report

Posted using ShareThis

Filed Under: Buying A Home, Foreclosure, Loan Modification, News, Real Estate Tips, REO, Short Sale Tagged With: auction, cancellations, investors

Federal Tax Credit Expiring Soon!

March 10, 2010 By Michael Koenig

Time to get your documents in order.

It would be a total shame to meet all the requirements and be eligible for the $8,000.00 Federal Tax Credit for First-Time Home buyers, and then fail to file the required documents.

Here are the requirements, as per the Internal Revenue Service website:

IRS First-Time Homebuyer Credit Documentation Requirements

Tax time is just around the corner and if you became a First-Time Homebuyer in 2009, you’re definitely looking forward to the First-Time Homebuyer Credit. However, are you confused about the documents required to claim the credit? The IRS has put together five tips to help clarify the documentation requirements.

Settlement Statement: Purchasers of conventional homes must include a copy of the Form HUD-1 or other executed Settlement Statement.
Properly Executed Settle Statement: A properly executed settlement statement shows all parties’ names and signatures, property address, sales price and date of purchase. However, settlement statements, including the Form HUD-1 can vary from one location to another and may not include the signatures of both the buyer and seller. In areas where signatures are not required on the settlement document, the IRS encourages buyers to sign the settlement statement when they file their tax return – even in cases where the settlement form does not include a signature line.
Retail Sales Contract: Purchasers of mobile homes who are unable to get a settlement must attach a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
Certificate of Occupancy: For a newly constructed home, where a settlement statement is not available, attached a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Long-Time Residents: If you are a long-time resident claiming the credit, the IRS recommends that you also attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.

Visit IRS.gov/recovery for more information.

[email_link] [print_link]

Filed Under: Buying A Home, Real Estate Tips Tagged With: $8000, Contract, documents, Federal Tax Credit, HUD-1, IRS, required, Settlement Statement

Fixer Uppers – Buyer Beware

February 27, 2010 By Michael Koenig

The oft heard phrase “Buyer Beware” is never more appropriate than when considering the purchase of a fixer-upper. You really need to know exactly what you’re getting into before buying.

It’s commonly believed that fixer-upper properties represent easy money that is ripe for the taking – that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. Usually, this simply isn’t the case. Although, with proper planning and foresight, good profits can be made by buying “distressed” properties at less than market value, making appropriate improvements and repairs, and then reselling. And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It’s less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.

The most important thing to know before making a decision on such a purchase is what needs to be fixed. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or wallpaper are the best bet. This is especially true for the first time buyer looking to live in the house for a while before reselling. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays a nice return. Don’t be afraid of buying a fixer-upper in need of this kind of repair. Properties with structural damage, or a floor plan that requires major work to remedy, usually can’t be “fixed up” at a profit.

Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper. Make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection. Often, sellers will be willing to lower the sales price to sell the home “as is” instead of paying for the repairs.

Be careful that you don’t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer.

Filed Under: Buying A Home, Real Estate Tips, REO Tagged With: Fixer, Handyman, hidden damage, remodel, repair

Tax Credit for Homebuyers

November 13, 2009 By Michael Koenig

Uncle Sam's Tax Credit

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000. Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.In addition, you may be able to benefit from additional housing related provisions, including the following:

Tax Incentives to Spur Energy Savings and Green Jobs

This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance

This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

Filed Under: Buying A Home, Real Estate Tips

First-Time HomeBuyers

December 7, 2008 By Michael Koenig

First-Time Buyer

Your decision to buy a home is both a sound financial decision and a commendable achievement. As your real estate agent . . .

I will lead you through every step of the exciting home buying process.

I will help you define your “wish list” of features you want in your home, your neighborhood and your school district.

I will walk you through the mind-boggling financial details associated with buying a home, including understanding the various mortgages and home buying programs available to you.

I will monitor all new listings and alert you to new houses as soon as they are put on the market.

I will, at no cost to you, negotiate the deal to save you money and commit my time and energy to finding you the right home.

I will eliminate the stress involved with buying a home by putting my years of real estate experience to work for you.

Finding the perfect home is my business. Contact me today!