First Time Home Buyer Tax Credit, Falling Prices, and Government Lending Programs Make it a Good Time to Buy Real Estate
summary: This article details the recent tax law changes, government lending prices and falling home prices that make right now an ideal time to buy a property.
By: Elaine VonCannon, ABR,SRES, REALTOR, Notary, Team Leader, Property Manager, Award winning agent
This year, many first time homebuyers will enter the real estate market to buy a home. One of the main reasons for this is the phenomenal $8,000 tax credit available to first time homebuyers. If a homebuyer completes the purchase of a property between January 1, 2009 and December 1, 2009, he or she is eligible for this credit.
The U.S. government's definition of first time homebuyer has an expanded meaning, too. According to the National Association of Realtors, "A person is considered a first-time buyer if he/she has not had any ownership interest in a home in three years previous to the day of the 2009 purchase."
The $8,000 tax credit is applied to the Adjusted Gross Income (AGI) on a tax return. Single taxpayers must make under $75,000 and married filing jointly taxpayers must make under $150,000 to qualify for the tax credit. The first time home buyer tax credit is applied directly to tax liability, and if liability is less than a credit, a refund check is issued. The home purchased must be worth $80,000 to qualify for the full credit. If the property purchased is less than $80,000 the taxpayer will receive a 10% credit on purchase price.
A study of my own real estate market in 2008 which includes Richmond, Williamsburg, James City County, York County, Newport News, Hampton and Yorktown revealed that prices have fallen from 15-17% depending upon the location. This decline in pricing makes buying a home even more affordable for the first time homebuyer. Some homebuyers who purchase property this year could end up with equity in the home right away, depending upon how deeply the seller has discounted the property.
A popular way for homebuyers to try to save money is to locate foreclosed properties. I recommend that first time homebuyers avoid the purchase of foreclosed properties. Many of these properties need to be fixed or updated. The only exceptions to this would be if a homebuyer is in the building trades or has excellent resources in hand in which case he or she might want to consider foreclosures.
Short sales are also becoming more numerous. A first time homebuyer could potentially save a great deal of money by purchasing a short sale property. However, they must be patient. This means a first time homebuyer may have to wait from six to nine months for the banks' decision about the short sale. After waiting so long, some short sales will not even come through, and the buyer has to start all over again. Many people looking for their first homes do not have the time or the patience for short sales, either.
There are two great government lending programs in place now and both require good FICO scores. The first is the 3.5 % down Federal Housing Authority (FHA) loan. Greg Caldwell, a Mortgage Banker with Old Virginia Mortgage, Inc. said, "The first time homebuyer may qualify for this loan with a credit score of 620 or more. The second is 100% financing -- still available on VA Loans." With many of our service men and women returning from Iraq this year, VA Loans could once again provide a great financing option for those who served our country.
First time homebuyers need to avoid a common pitfall in the home buying process. As they drive through a desirable neighborhood, often buyers will see a property they are interested in and telephone the listing agent to ask questions about it. Then the potential buyer will ask the listing agent to represent them. This is considered dual agency, which means the listing agent becomes the buyer's agent on that particular property, too.
It's not a sound idea to have the listing agent represent you on the purchase of your first home. More objectivity is lent to the buying process if the first time home buyer locates a buyer's agent on their own, and initiates the search (or telephone inquiry about the property) through their agent. A buyer's agent will have the purchaser's best interests at heart.
With all of the recent changes in tax laws, property pricing, and government assisted lending programs, the first time homebuyer should be enticed to purchase a home this year.
Gorgeous Town Home near New Town at 4229 Falcon Creek Dr, Williamsburg, VA 23188
Gorgeous town home in pristine condition. Conveniently located near Route 199, shopping recreational areas, the College of W&M & the historic district. Lots of upgrades-hardwood floors, crown molding & chair rail, ceramic tile & jetted tub in 1st floor master bath. Family Room w/cathedral ceiling & gas FP. Large loft on 2nd floor w/2 additional BRs & Bath. Home features an open floor plan w/eat in kitchen.
Call Elaine for showings, tenant must be given at least 24 hour notice. Pets allowed w/deposit (600.00) & approved by Elaine. NO SMOKING! One Month's rent as a deposit.
Directions: Route 199 to Monticello. R-News. L-Old News.L-Powhatan.L-Providence. L-Falcon Creek
Offered at $1,495 a month
BRICKSHIRE GOLF COMMUNITY IN NEW KENT COUNTY AT PROVICENCE FORGE, THE BEST KEPT SECRET FOR HOME VALUES!
You will always look your best when company comes to visit you in beautiful spacious open floor plan home. 3402 sq. ft. with 4 large bedrooms and 2.5 baths. This is the Brighton model which features a side load garage with a 15 X 20 extended turning pad, 1st floor master with jetted tub, family room upgraded Freizee carpet and loft on 2nd floor. Very nice open floor plan on the 1st floor, which makes this home a perfect family home and great for entertaining. This lovely home also features hardwood floors and ceramic title and a spa like master bath.
Directions: I-64 West to Kentland Trail, after Colonial Downs and Welcome Center turn right on Brandon Pines, turn right on Crewe.
Offered at $409,500
Welcome to Payne Estates! This new development in Charles City County will have homes on lots of an acre or more. The development is near wildlife refuge, marina & is 15 minutes from Williamsburg, New Town area & 40 minutes from Richmond. Now is the time to choose your lot and bring your plans to build. Come visit us! Lots priced from $35,000 to $89,000. Buyer to pay for tap fees.
This development will have public water & sewer. Street numbers have not yet been assigned.
Directions: Rt 5 turn on Wilcox Neck Rd, follow lead in signs. Total Acres of this lot is 1.69.
Lot 1 Payne Estates Court, Charles City, VA 23030
Offered at $60,000
Old Fashion Values Helps To Bring Me To Holiday Acceptance!
By: Elaine VonCannon, ABR, SRES, REALTOR, NOTARY, PROPERTY MANAGER, TEAM LEADER
Do I want to go shopping, bake cookies, wrap gifts, drag out decorations, etc....? NO! Alright, let me get my mind on something else.
I turn on the news, yikes; market down, homes sales are in the preferable toilet, mayhem running ramped! Ok let's get a grip here, how much negatively an one take, I ask you?
Ok, by now I have a head ache, and I just want to crawl back into bed. Stop that I tell myself. You know that negative energy and thought will only draw negativity to you. Yes, but, all I hear is how bad it is. Nonsense, you have your family, friends, a few clients (Whew!), your health, 5 cats and a car that is paid for! Now I am hearing the faint strands of the 12 days of Christmas in the background of my mind.
Let's add up the real estate market. The rates are good, yes, the supply is there for the buyers, my phone is ringing somewhat. Not so bad, I called my friend who is my muse for my writing.
Sue, Sue, I said we need to do something to get into the Holiday mood and flow with the yuletide. She asked me what I had in mind. Well our REALTOR association is having an angle tree, last year I did It, so let's do it this year. Fine she said.
Did you get the email she asked me about the bell ringing and they need at least 35 more people to volunteer? Yes, I was thinking about it, I told her. Sue, Sue, said she would call the next day and sign us up to do it together. Great I told her.
Ring, Ring, the next noon. Hi Sue, Sue. Oh, you signed us up. Where will we be ringing the bell at? She laughed and said we had 2 places to choose from, in front of the ABC store (Virginia's alcohol and beverage store) or the Long And Foster Office (another real estate office and we are RE/MAX agents). I already knew the answer. Bingo the ABC Store. Well, she said, we will be sure to see more people at that location and they may be generous to donate to the Salvation Army bucket we will have. Good point! And she added if need be we can do a little shopping there. Sounds like a good idea.
Now I am feeling better as I feel that I am giving back to the community and shaking the doom and gloom. So the week before Thanksgiving a local radio station starts playing Christmas music. I turn in to the station. And hear the carols and songs which bring back memories of my childhood and of when my son was growing up.
I have now overcome the media blitz about what is wrong with everything. I am looking forward to the holiday, for the true spirit that it was meant to be. Giving of your time and resources for the good of others, makes me want to accept the holiday and even embrace it. As this is what it is meant to be.
I will spend time with family and friends; after all time is our most precious gift. I may even bust a move and bake some cookies. I did tell my husband that we will put a tree up as this is something I have not done for 7 years. My reason was we have no small children at home. But, I did tell my husband our 5 cats who are 5 years old have never seen a Christmas Tree. This may be material for another Blog!
Merry Christmas to all and to all a Happy Holiday!
Visit my web sites to view other listings at www.voncannonrealestate.com www.estatesinvirginia.com You will also find articles and more information on homes, the Virginia real estate market and my team.
Picture is from my website www.estatesinvirginia.com and is my best friend Mary Wiseman aka: Martha Washington.
POST NOTE: NOV. 30, 2008..........The Christmas Tree went up today and is completely decorated. Carols played while my husband, who looked like a deranged elf, helped me. The cats are not interested in it at all. I also invited 5 people to Christmas dinner, which I have not done in about 10 years. I think I have been bitten by the Holiday Bug!
RE/MAX Hall OF Fame REALTOR® with RE/Max Capital in Williamsburg, Va., Specializes in retirement, 1031 tax exchange, relocation, property Management,residential and commercial real estate in Va.
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