Julia & Matt Fishel, Real Estate YOUR Way in Tampa Bay by

Since HR3221 went into effect on July 30th, there's been enough nationwide analysis and debate to make even a Palm Harbor Real Estate professional's head spin! Today, let's focus on one wonderful little piece of that legislation - the $7,500 tax credit!

Am I Eligible?

• The $7,500 tax credit is for first-time home buyers only for any home in the U.S. If I haven't owned a home in the past 3 years, I qualify!
• I must be a U.S. Citizen and file my taxes.

Will the Palm Harbor Home I'd Like to Buy Qualify?

• Any Tampa Bay home qualifies as long as it's my principle residence.

Do I Earn to Much Money to Qualify?

• Dunedin home buyers filing as single or head-of-household can claim the full $7,500 if my adjusted gross income (AGI) is less than $75,000.
• Married couples filing jointly can double that to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial credit.
• Married couples filing jointly who earn between $150,000 and $170,000 are eligible to receive a partial credit.
• If my AGI is greater than the limits above, I am out of luck.

When Must I Buy My Palm Harbor Home?

• I need to have closed on the purchase of my home on or after April 9, 2008 and before July 1, 2009.

Will the IRS Write Me a Check for $7,500?

• If I pay less than $7,500 in taxes for the year, then they IRS will cut me a check for the difference. For example, if I owe $5,000 in taxes, I will pay nothing to the IRS and they will cut me a check for $2,500. Or, if I am due to receive a $1,000 refund, my refund will grow from $1,000 to $8,500. SWEET! (We'll ALL be paying for it in other ways but let's not digress!)
• If I purchased my home in 2008, the credit must be claimed with my 2008 tax return. If I plan to buy my Palm Harbor home in 2009, then I have the option of filing it either with my 2008 or my 2009 tax return.

The Catch .... Payback Provisions

• The tax credit is an interest-free loan that must be repaid over 15 years.
• The minimum repayment amount must be 15 equal annual installments. For example, if the credit amount is $7,500, then I must repay a $500 each year for 15 years.
• If I didn't take advantage of the tax credit and borrowed that same $7,500 from my mortgage lender at 6% for 15 years, I would pay $11,392.96 of interest in addition to repaying the $7,500 principle!
• I must begin repaying the credit two tax years after claiming the credit.

What Happens When I Sell My Palm Harbor Home?

• When I sell my home for a profit, then I must repay the remaining credit during the tax year I sell my home. The amount of of my repayment depends upon the amount of profit from the home sale:
  • If the profit on the sale is more than the remaining credit, then I must repay the entire remaining credit.
  • If the profit on the sale is less than the remaining credit, then I must repay an amount equal to the profit on the home sale. The remaining credit payback will be forgiven.
• If I sell the home but did not make any profit on the home sale, then the remaining credit payback will be forgiven.

Oh, The Silly Disclaimer

As always, please don't construe this article as legal, accounting or tax advice. Always contact a tax accountant for advice specific to your situation. That being said, we think you'll be hard-pressed to find a professional that says this isn't a fantastic opportunity for free money!

How Do I Get Started?

It's easy. Give us a call at (727)366-0324 or contact us here to start your Tampa Bay home search today. Of course, you can also search the MLS like a Realtor!

Taking good bathroom photos is challenging, even with a wide angle lens. Does this shower curtain close-up make you want to run out and see this Dunedin home that's currently on the Pinellas MLS? Do you suppose there's something lurking behind there? What?!

When you're house hunting online, what photos do you most like to see?

The most interesting response to these questions wins a Starbucks gift card and a possible feature on The Peach! Please send your response here.

The FHA is pulling in the reigns on it's lending practices again. If you're currently out shopping for a new Dunedin home and were planning to put just a little money down, there are 2 critical changes that became effective yesterday.

Increase in Down Payment for that Dunedin Home

• You now need a 3.5% down minimum instead of the current 3% requirement.
• As detailed in an earlier post about the passage of HR3221, the seller can't pay your down payment any longer, yet your Palm Harbor Real Estate professional can help you negotiate for seller-paid closing costs.

Mortgage Limits Decreasing

The maximum home purchase price effective January 1st will be $271,050, down from $292,500, as detailed in HUD's Mortgagee Letter 2008-36. Take heed of this if you're shopping in the $250K to $300K price range for that beautiful Crystal Beach Florida home. You don't want to find yourself out of the FHA loan package entirely.

A Recap of Your Options for a Pinellas Home Mortgage

Your T.V. set is incorrect - there ARE still plenty of loans available, and these are your options today:

FHA Financing - 3.5% down payment required

Conventional Financing - Requires minimum 10% down payment.

VA Loan - 100% loans still available

Private Financing - Private "hard money" is available at whopping interest rates for investors. Or there's always the bank of "Mom and Dad".

Feel free to contact us call us at 727-366-0324 (Julia) or 727-366-0325 (Matt).

As Palm Harbor FL Realtors, we're often asked to describe Crystal Beach Florida, which hugs the gulf in North Palm Harbor. A picture is worth 1,000 words, so we whipped out the magic wand again (with fairy dust), and voila! Two of the homes in the slideshow below were just listed, 885 Point Seaside Drive, Crystal Beach Florida, and 128 Georgia Avenue, Crystal Beach FL.

Crystal Beach offers something for everyone - funky cottages, Key-West beauties, custom estates of all kinds - you name it - it's here. When searching for Crystal Beach homes, be sure to search in zip code 34681. See you at the Pier!

As Palm Harbor Realtors, we're often asked exactly how much Pinellas real estate prices have fallen. It's usually the buyers that are asking because Pinellas home sellers are having a harder time accepting the reality of today's market. Prices will rise again to those crazy 2006 levels, but it's going to be many years before that happens (speculation for another post). Yet this Zillow graph helps put perspective on the fact that homes always appreciate over the long term. In the mean time, if you know someone selling their Palm Harbor home now, give 'em a hug and a stiff drink and then, and only then, share this.

Before we get to the numbers, it's important to acknowledge that the fall in Ozona Florida or Dunedin real estate prices is actually a market correction from the falsely inflated prices we saw in the peak in July 2006. Things were nuts then, and would you agree that we've had a wake up call about the current state of the US economy, helped largely in part by the lending madness we saw a few years ago?

So the numbers.... The St. Pete times reported on November 26th that Tampa Bay homes lost 18.5% of their value the past year, according to September's S&P Case-Shiler home price index. As of end of 3rd Quarter '08, Zillow's reporting a 17.1% drop in Tampa Bay home values over last year. Last month, The Pinellas Peach reported a 16% decline in Pinellas home prices based upon our MLS research, so I guess you can say that we're optimists.

Pinellas home buyers, rejoice, and start shopping! Sellers, take heed, assuming our mere 16% decline, that's an average of 1.33% drop per month. Let's say your home was worth $300,000 last year, you lost $4000 a month EACH MONTH your home didn't sell last year, and today's it's worth a paltry $252,000.

If you're thinking of selling, and, by the way, there are still lots of wonderful reasons to sell now (buying up, anyone?!), it's time to talk turkey with a real estate professional that will get your home sold now.