IT'S OFFICIAL, THE $8000 TAX CREDIT HAS BEEN EXTENDED AND EXPANDED

Our government is offering a sizeable tax credit if you buy a home before April 30, 2010. Also, I am offering to contribute $1200 toward your allowable closing costs IF I cannot get the sellers to contribute at least $1200 toward your closing costs. Also, every client of my receives a "Standard One Year Home Owner Warranty" free at the closing of escrow. Here are the details of the extended and expanded credit. Begin your Seattle metropolitan real estate search today. www.davidsundquist.com

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit

CONGRESS HAS EXTENDED AND EXPANDED THE HOMEBUYER TAX CREDIT. HERE ARE THE DETAILS OF THE EXPANDED CREDIT THAT IS NOW OFFICIAL.

• DEFINITION FOR ELIGIBILITY FOR A FIRST TIME BUYER: The definition of a first time home buyer is someone who has not had an interest in a principal residence for 3 years prior to purchase.
• AMOUNT OF CREDIT: $8,000 for a couple, $4000 for someone married filing separately.
• CURRENT HOME OWNER DEFINITION FOR ELIGIBILITY: Must have used the home sold, or being sold as a principal residence consecutively for 5 of the previous 8 years.
• CURRENT HOMEOWNER AMOUNT OF CREDIT: $6500, or $3250 if married but filing separately.
• WHEN DOES THE CREDIT TERMINATE: Purchases after April 30, 2010.
• BINDING CONTRACT RULE: So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
• INCOME LIMITS: $125,000 single, $225,000 married. Additional $20,000 phase out.
• LIMITATION ON COST OF PURCHASE HOME: $800,000
• PURCHASE BY A DEPENDENT: Ineligible.
• ANTI-FRAUD RULE: Purchaser must attach documentation of purchase to return.

HERE ARE SOME COMONLY ASKED QUESTIONS REGARDING THE EXTENDED AND EXPANDED CREDIT

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who

meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a

new home. I have lived in my current home for more than 5 consecutive years and

am within the new income limits. I will go to settlement on November 20. If

President Obama has signed the bill by the time I go to settlement, will I qualify for

the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment

(when the bill is signed). There is no reference to the date of contract for the new credit. The

provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a firsttime

homebuyer but was not within the prior income limits at the time I

entered into my contract to purchase on October 30, 2009. I will be covered,

however, by the new income limits. If the new rules have been signed into law by the

time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.

The income limit and other eligibility rules will look to your status as of the date of purchase,

which is the settlement date. So if the new rules have been signed when you go to settlement,

you should be eligible for the credit (or a portion of the credit if you're within the phaseout

range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I

have found a home with a nonnegotiable

price of $825,000. Will I be able to use any

of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount

above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an

absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting

since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the

other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you

will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000

and lived there until 2008 when he got a divorce. Whether John has been renting or bought in

the interim, he WOULD INDEED be eligible for the credit because he owned a home and

occupied it as his principal residence for 5 consecutive years out of the last 8 years. The

keyword here is "consecutive." As long as he lived in that house for 5 years straight what he

did since 3 years doesn't impact eligibility.

Question: I am an eligible firsttime

homebuyer. I entered into a contract to purchase on

November 1, 2009. Do I have to go to closing before December 1? How does the

extension date affect me?