Atlanta Housing Source

I have seen far more activity as the credit come to an end as I did when the last credit came to an end in November 2009.  At that point last November we had 5 pending closing and as of today we have 10 pending closings.

Has the credit made a difference?  Yes.  Would those individuals have purchased anyway, most likely.  What the credit has done was created a since of urgency and lowered the inventory levels quickly.

I have had a few buyers that have not gotten under contract to qualify for the credit and the clock is ticking.  Most of them early on made the choice to find a home that they love no matter how long it takes to find it rather than rush just to get the $8,000 credit.  These are the wise buyers.

The buyers trying to get under contract have been involved in multiple offer deals where there has been intense competition.  Banks and individuals have been holding firm on their offer price.  The ones that have won the bids have offered full list price or more.

Think about it, just months ago you could get a bank or individual to negotiate, and now they are holding strong.  I think this will continue until April 30, when demand will drop off.  At that point, then they will be more agreeable to negotiate.

Is the $8,000 credit held prices artificially high? I believe that sellers felt that could get $8,000 more for their home with the credit. Those who didn’t sell will see the reduced demand equate into price reductions.

I am glad that the credit was not considered for another extension so the market can get around to self correcting.  Selfishly I want a normal market, not artificially stimulated.   Myself and many of my colleagues agree that letting the free market find its balance will be the quickest way to get back to normal.

New buyers after April 30 will be in short supply, but we will be busy getting all the homes to closing by June 30.  During this time we will have to work hard since any issues found during inspections that could kill the deal may cost the buyer $8,000. Expect sellers to be tough about making repairs or concessions since they know every issue after April 30 is a $8,000 issue.

Keep focused on keeping the relationship of protecting your clients during the next two challenging months.  Remember, our partners are getting ready to get real busy. Our inspectors, lender, appraisers and closing attorneys all need our support and patience.

We just got the banks acceptance of a short sale offer, which had been at the bank awaiting approval for four months.  My buyer is ecstatic. Think about it, four months to get approval and then we spend another 30 days with financing, appraisals and getting to the closing table.  Five months total.

Its almost the first of March and if you write an offer on a short sale home tomorrow, March 1 and it takes the four to five months to get  closed as we just experienced, if you are lucky, you are closing on the last allowable day, June 30, to get the $8,000 first time homebuyer credit from the federal government.  Miss that by one day and you miss the $8,000.

Now I’m not a gambling man and don’t know if you are, but, I wouldn’t risk the chance of losing $8,000 waiting on the bank.  There are thousands of homes out there for sale that only need the owner, Mr. and Mrs. Homeowner to sign and then you can close in less than 45 days from offer to move-in.

I am advising my first time home buyer clients to beware of short sales if they want to get to the finish line and collect $8,000.  While I know this news disturbs all the agents with short sale listings, the main reason is many agents don’t understand the short sale process and have not done the work to get the front end work done to speed up the process.

Likewise I have a couple of buyers looking to secure the $6,500 second home buyers credit and I am advising them likewise to beware of writing a contract for a new home that has not been started, up out of the ground.  With all the rain we have been experiencing there is a good chance of delays when digging a foundation, pouring concrete slabs and framing up a home.

Bottom line, there are risks with short sales where you can’t control the banks and new construction where you can’t control the weather.  To be sure to qualify for the first time homebuyer $8,000 and second home $6,500 write a contract that has a great chance of closing in time and don’t ride a deal down to the end only to run past June 30.

FEDERAL TAX CREDIT

Unlike the 2008 tax credit of $7,500.00, the 2009 tax credit has been raised to $8,000 and does not need to be repaid. Any home more than $80,000 qualifies for the $8,000. If the house is less than $80,000, then the home purchaser would qualify for 10% of the home value.

The house must be for a principal residence (where you live more than 50% of the time) and the credit lasts for home closed before 12/1/2009. It is also for first time homebuyers only. A first time homebuyer is classified as anyone who has not had any interest in a home in the last 3 years.

 A qualified buyer claims this amount on their individualized tax return. So a person who has a tax liability of $9,200 would only pay $1,200. If the tax liability is less than the $8,000, the qualified home purchaser would receive a check for the difference.

There are some income restrictions for this tax credit. Single/Head of Household are eligible if their income is no more than $75,000. Married couples who file jointly have a cap of no more than $150,000.

It is easy to claim for this tax incentive. Just claim the credit on the IRS Form 1040 and it will be reflected on the Form 5040.

GEORGIA TAX CREDIT

This tax credit is NOT limited to first time home buyers. You can qualify for both the Federal and State Tax credits or just the State Tax Credit.

It applies to single family residences that are listed for sale prior to May 11, 2009 and only applies for properties that purchases that close before November 30^th.

This credit is figured by taking 1.2% of the purchase price with a maximum credit of $1,800. Houses over $150,000 will receive the maximum amount of $1,800.

The credit for the state is calculated differently, it is over 3 years or up to $600.00 per year. You cannot amend your 2008 returns, it must start in 2009.

So there are the facts about how first time home buyers can be eligible for up to $9,800, but time is running out. So if you are thinking about buying your first home, start your search and let us help you find some of the best deals! Currently there are over 80,000 home and we allow you to search them for FREE. So let’s get started!

Click here for your FREE Buyer’s Guide to help you through the process.

If you are looking to either buy or sell a home in Gwinnett County, we want you give you an update on the market. There has never been a better time to purchase real estate. The competition to sell a home across the Atlanta Metro area is high with bank owned dominating the market with deeply discounted homes.

In addition, there is the $8,000 Home Buyer Tax Credit.

Here are the highlights about the credit

·   The tax credit is for first-time home buyers only.

·   The tax credit does not have to be repaid.

·   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

·   The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

·   Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

To take advantage of this huge benefit – contact Mark at 404-886-8789 and he will be happy to help you.

FOR MORE INFORMATION ON THE TAX CREDIT SEE THE FOLLOWING WEBSITE:

www.federalhousingtaxcredit.com