California Homebuyer Tax Credit Will Add $10,000

 

 

 

Californa’s Newest First Time Homebuyers Tax Credit is  for Resale Existing Homes and New Construction!

The CA first time homebuyers tax credit has been revamped, and will now allow a credit for first time home buyers looking for existing (resale) homes, as well as new construction. The passage of this bill is due in large part to CAR’s non-stop continual push in Sacramento over the last few weeks.

Homebuyers can claim 5 percent of the purchase price against their California taxes, up to $10,000.

“I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy,” CA Gov. Schwarzenegger said in a statement.

The new tax credit will provide $200 million in tax credits for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes, and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. Again, the credit is equal to the lesser of 5 percent of the purchase price or $10,000, and willl be applied to your taxes in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

You may or may not remember the last CA tax credit ran out of money and was abandoned well before it was supposed to end, so once again, it is urged that anyone thinking of purchasing a home moves forward as quickly as possible if they want to be assured of securing their $10,000.

Buying a Sacramento short sale will definitely become easier and easier in the next several months and the process will continue to evolve, change, and morph into a more traditional transaction for years to come.

Buying A Short Sale

Contact a Certified Short Sale Agent about buying a short sale.

However; your Buyers Agent- if they are at all experienced with with todays market- will know that there are some short sales will never close!Secondary Mortgages (any Junior Liens) that have been added after the purchase or have been refinanced (any non purchase money loans) are full recourse in California– the first will go away with the house– no matter what; if it goes to foreclosure, closes as a short sale, whatever… but non-purchase money seconds may stay intact and become non-secured debt… just like credit card debt.Short Sale qualifying is just asking questions; the right questions will allow yor agent to find shortsales that have a high chance of being approved: Your Short Sale Specialist will find out things like:1) The Kind of loans involved; recourse or non-recourse.2) If recourse; the sellers (think homeowners) financial situation, hardship status and/or their willingness/ability to make a contribution, sign a note, or otherwise pay off any secondary note holders demand (which may be full recourse).3) Which banks are involved and their policies regarding first liens, secondary liens, recourse debt, hardship rules etc.4) Know the market, the absolute market value of the home– (banks don’t like to leave money on the table) what the Broker’s Price Opinion, or Appraised value of the home will be and the amount of money the first will be short; and the policies of each bank involved–If you don’t know these things gong in, you will find them out during the process, usually weeks or months into the short sale process… Contact a Certified Short Sale Agent about buying a short sale right here.  Many, many times, the short sale you have fallen in love with and cannot live without may very well become an REO.There is also the chance that your short sale will, at the eleventh hour, not be approved because the banks or servicers suddenly want to include language stating the seller agrees that the lender has the right to pursue a deficiency judgment or the balance unpaid on the promissory note… Many homeowners, when they realize this problem is not going away, file bankruptcy– again, at the eleventh hour- after you and your family have been waiting months for the home of your dreams.Make sure your Buyer’s agent is also a Sacramento short sale listing agent and a Sacramento Short Sale Specialist and works with a team that specializes in these complicated and ever-changing transactions!Short sale negotiating is definitely a moving target– it is nearly a full-time job just to stay on top of educated of all the different banks, servicers, secondary investors rules of procedure and the institutional/political policy changes.Some short sales will never close! Find out why!By the way…here’s where I remind everyone that I am NOT a lawyer, and that if you have any questions or concerns about your legal situation– get an attorney! I have several great Real Estate Law, Mortgage Law, Contract Law and Bankruptcy Law specialists that I can refer you to!

Contact a Certified Short Sale Agent about buying a short sale.

Tags: Buying+a+short+sale, Sacramento+short+sale+listing+agent, Short+sale+negotiating, Short+sales, Sacramento+short+sale, Short+Sale+Specialist, short+sale+process, Sacramento+Short+Sale+Specialist

Sacramento Foreclosure Solution Expert Report

Short Sale Help Is On The Way! BofA Implements The REOTrans Equator Short Sale Process Module.

Sacramento Short Sales are here to stay… and with more and more defaults and homeowners in foreclosure, short sales will become even more and more rampant in Sacramento.

Bandk of Amerioca Short Sale System

Short Sale Help

The problems with most Sacramento short sale transactions are the extremely slow communication, processing, negotiating and approval of short sale files.Even though their are several banks that have been really good to work with; Wachovia has been good for a long time, Chase is becoming a breeze; Wells Fargo is getting things lined up, and now even Freddie Mac and Fannie Mae are pledging to help the Short Sale Process to become smoother.

Click here for Sacramento short sale help.

The “writing is on the wall” for 2010 to become the year that servicers, banks, institutions and secondary investors all get their act together to help make the short sale process more mainstream, less painful, confusing and stressful for buyers!

Over the last few years; often times, after Sacramento buyers have written offers on two, three, even four or more short sales without success, they just quit looking at short sales altogether and look for an REO or equity sale…

We will Surely look back at 2010 as the year the game changed… as more and more banks implement systems to make the Short Sale Processmore streamlined, easier to manage and even transparent; more like traditional real estate transactions! Sacramento’s real estate market will see a huge change as Bank of America gets its act together and starts closing short sales faster and more consistently

Click here for Sacramento short sale help.

The new Equator Short Sale Processing Module  (formerly known as REOtrans) has been launched as the industry’s first short sale processingonline portal. The amount of people I talk to here in the Sacramento area just amazes me; its like one of every three or four people I visit with about their mortgage have a BorA or Countrywide BofA

Although Equator has declined to name the lender, the new Internet based platform, as recently reported by the San Francisco Chronicle, will be used by Bank of America. A representative from BofA recently told the Chronicle that they were using the Equator platform to manage the short sale process. Great news, as Bank America is hands down the WORST bank to deal with on short sale files right now! 

The Short Sale platform will allow everyone involved in the transaction to work together, in real time with access to all documents, processing requests etc. and will be a huge asset in helping to shorten the time frames of short-sale approvals.

As reported in DSNews:

“This is the first time that short sales have been handled through an electronic platform,” said Equator CEOChris Saitta. “With our new system, everyone works together in real time, dramatically improving communication and approval timeliness for our client, its borrowers, vendors, and real estate agents.”

Just think– The short sale process becoming more like traditional real estate!

Click here for Sacramento short sale help.

If you are a buyer or a homeowner with questions about your options, Contact me today for Sacramento Short Sale Help!

This will be HUGE for our Sacramento Housing Market!! I’ve beeen watching this closely…

Oct. 27 (Bloomberg) — U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.

The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.

The new agreement, which is still being negotiated and may change, would grant the credit to borrowers who have lived in their current home for at least five years. Lawmakers want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression.

The demand for new homes and condominiums may increase by “more than two times because you’re allowing step-up buyers into the equation,” said Andrew Parmentier, a managing partner at Height Analytics, a research firm in Washington. “ You just opened up a whole new pool of people who can buy into those empty homes and empty condos that were built out.”

The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples. The income criteria for step-up buyers would be $125,000 for individuals and $250,000 for couples.

The credit would be limited to homes costing $800,000 or less. There is currently no price cap on home purchases.

Unemployment-Benefits Bill

Lawmakers are trying to attach the legislation, which is also being considered by leaders in the House, to a bill extending unemployment benefits under debate on the Senate floor, said Richard Durbin of Illinois, the Senate’s No. 2 Democrat.

Senator Bill Nelson, a Florida Democrat, told reporters yesterday of the tax credit that “we should be able to extend that later this week.” Nelson was traveling with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.

Lawmakers are also considering pairing the new homebuyer credit with a broader tax benefit for businesses with net operating losses, and passing that as a separate bill. The tax break, a priority for homebuilders, would allow companies to apply losses incurred in 2008 and 2009 to amend up to five years worth of earlier tax returns to get a refund of taxes paid in years when they were profitable.

That provision, along with the step-up, would be “extremely positive for the homebuilders,” Parmentier said.

A version of the benefit was included in February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. Business groups, including the Washington-based National Association of Manufacturers and National Association of Home Builders, lobbied unsuccessfully to have the benefit expanded to larger companies.

To contact the reporters on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.com; To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net.

With another highly publicized moratorium starting here in California on June 15^th; many buyers, sellers, and real estate professionals have wondered how big the impact will be on the housing inventory here in the Sacramenot area.

It seems the impact has already been felt and dealt with.

Lenders and loan services that already have a comprehensive loan modification program in place are exempt from the law. So most banks, lenders and servicing companies, even if they did not have one in place originally, have put one in place since the law was written in February when The California Foreclosure Prevention Act was included in legislation was passed that approved the state budget. The moratorium started on June 15. 

 S. 1230,  The Homebuyer Tax Credit Act of 2009, a new bill just introduced by a bipartisan group would almost double the current homebuyers credit. The bill would surely help our Sacramento market, as it would not be limited to just first time buyers, but it does have some limitations…

From DSnews yesterday:

Bill Seeks To Expand Homebuyer Tax Credit
Carrie Bay | 06.16.09

Sen. Johnny Isakson (R-Georgia), along with nine bipartisan cosponsors, has introduced S. 1230, The Homebuyer Tax Credit Act of 2009. The bill would increase the federal tax credit for the purchase of a home from the current amount of $8,000 to $15,000. It would also extend the benefit to all homebuyers, not just first-time purchasers.

With all of the distressed properties for sale (nearly 80% in some price ranges and neighborhoods) here in the Sacramento area, it is sometimes a challenge to find properties that are move-in ready.According to a recent poll, only 7% of home buyers were looking for a fixer.

“First-time buyers are skeptical of buying homes that need improvement,” says Eric Mangan, a spokesman for ForSaleByOwner.com. “Sellers certainly don’t need to remodel the kitchen, but they want to make sure that their homes showcase very well.”

Non-distressed sellers, or equity sales, as they have come to be known, can definitely ask a premium in this market, if the property is well maintained, impeccably clean  and staged like a model-home.

I have had sellers who didn’t want to spend the money or take the time to do the small fix-ups, who wanted to sell “as-is”, but still wanted to price their home higher than the distressed properties in the area.

My advice to them has been; if you want to price at a premium, the condition, curb-appeal and staging must be perfect. Even then, a buyer will only pay so much for these; your premium probably can’t be more than 3 to 5 percent, in most cases.

You must also be conscious of the appraised value, cleanliness and curb appeal are hard to adjust for on an appraisal basis.  When the only comparable sales available to an appraiser are those of distressed properties, the premium of a non-distressed sale is very hard to put a price to.

With the Sacramento region’s already low-low median-home price; which is slightly more than the national figure, many people who never thought they would own a  home are now in the position to buy. However, there are still many people who can afford the monthly payment but are having a challenge putting together enough cash for closing costs and down payment. In an effort to Jump-start first time home buyers, last week, the Department of Housing and Urban Development unveiled a policy change which will provide the tax credit up-front. Recently, first time buyers accounted for half of all purchases during the first quarter nationwide.

Even with the low 3.5% down payment offered by FHA added to traditional closing costs, it could easily take $12,000 to $15,000 to get into a $200,000 home.  And now there will be a way for first time home buyers to come up with $8000 of that, to be used for everything but the down payment.

President Obama’s economic stimulus plan, which was introduced in February, included a tax credit to the extent of $8,000 for first-time home buyers. However, home buyers would receive the credit from the Internal Revenue Service (IRS). Typically you get a tax credit “back” when you file your tax return. So the credit either reduces the amount of tax you owe, or if you owe no additional tax then you are sent a refund check for the amount of the credit, after you file your 2009 tax return in early 2010.

The HUD policy change will enable borrowers to receive a loan they can repay with their tax credit. The advance from the lender cannot be used for the 3.5% down payment that borrowers have to make for FHA loans. Most typical loans have $3,000 to $5,000 in closing costs, title insurance, and other fees. The advance can be used by borrowers for meeting such costs. Keith Gumbinger of HSH.com, a publisher of mortgage and consumer loan information, says the program “could just grease the wheels for a couple more people to get into FHA.”

The federal government defines anyone who hasn’t owned a principal residence for three years as a first timer.

With the over 35% drop in the Sacramento area median home price, first time buyers are swarming! It’s so fun to talk to people who have realized that they can buy now. People who have been priced out of the market, people with good credit, money in the bank, great jobs and powerful thirst for  home ownership are easy to find right now.

With the Sacramento area’s affordability, first time buyers are competing with investors for homes in the more affordable pricranges; and with some of the great financing available, they are winning more than you’d think! With a lot more inventory to go through before this downturn in our market is over, I am telling people to “take your time and get it right”…

It could be a long time before the market rebounds enough for a homeowner to sell at a profit, after cost of sales is figured into the deal, so just make sure the home you write an offer on is one you and your family will be happy in for several years!

First-time home buyers who purchase homes before December 1, 2009 are eligible for a tax credit of up to $8,000.  To qualify the purchaser my not have owned a residence during the three years prior to the purchase.  The tax credit is only available when buying a primary residence.

The tax credit is determined by the price of the home and the buyers income.  The tax credit is equal to 10 percent of the purchase price of the home, up to a maximum of $8,000.  To receive the maximum credit income for single buyers may have income up to $75,000 and for married couples incomes up to $150,000.

I found this great little explanation of the tax incentives for a first time buyer vs. renting in a a market such as the one here in Sacramento…

“I’ve got a little analysis here that talks about the difference between renting versus owning. Say you’ve got somebody who earns say $75,000 annually, paying $1,500 a month rent, and they’re going to buy something for $300,000. We’ll use 5 percent as the rate.

They’re roughly going to be paying on Federal Housing Authority loan about $2,070 a month. That’s everything, give or take — taxes, insurance, principal and interest. The feds, as Robin has said, are giving an $8,000 tax credit.

They’d be paying about $12,500 in federal taxes and about $4,100 in state taxes when they’re renting. When they’re owning, they’re going to be paying about $8,100 in federal and $2,700 in state taxes.

What that comes down to is about a $5,800 a year tax benefit, which is $488 a month.

So, if your payment is, say, $2,070, and you’re going to wind up getting approximately a $488 a month tax write-off, not counting the $8,000 bonus incentive there, there’s only about $50 or $75 difference between renting and owning.

That’s a big, big piece in driving the market at $350,000 and under.”

The number of closed escrows here in the Sacramento market has increased 81% over 2008’s  numbers, According to the Sacramento Association of Realtors, who’s information is taken  from the MetroList® Multiple Listing Service database.

As a state, California did even better, in the last six months; sales have gone up 89 percent compared with a year ago, according to the California Association of Realtors.

It seems like the worse it gets, the better it gets. 

Some of the increase is because of the ease of financing:

Lenders and Sellers are getting aggressive with financing options: Programs such as Fannie Mae’s Homepath Program: with a 3% required downpayment, no appraisal (or appraisal fees) no mortgage insurance and up to 6% seller concessions for closing costs. This loan is only available on Fannie Mae owned homes…

The USBank American Dream Program, (with 3% down,  and all but $1,000 can be gifts grants or seller contributions) also comes with an available $3000 in Entry Cost Assistance (which is silent second with no interest, no required payments) it also lets the buyer do up to $5,000 in a repair escrow that can be seller funded, AND buyers only qualify on the last 12 months of income, including overtime and commissions!  This loan also has no mortgage insurance! This program is available on any home!

Get ahold of me; I can direct you to some great lenders that are doing these loans in boatloads and have them down pat!