Lee Davenport

Hooray - The House and the Senate this week passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they've lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly.

"REALTORS® appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners," says NAR President Charles McMillan. "As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation's housing market."

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

Compare the current tax credit with the newly passed version on REALTOR.org.

More on the credit is available from NAR.

Source: The Associated Press (11/5/2009)

HGTV's real estate Web site Frontdoor.com has identified what it calls the "tricks and treats" of buying a foreclosure:

Tricks to avoid:
**Just because a foreclosure has a low price tag doesn't mean it's a bargain. Many need lots of expensive repairs.

**Buying a foreclosure property isn't for amateurs. Buyers need a knowledgeable real estate practitioner to guide them through the process.

Foreclosure treats:
**Well-maintained foreclosures priced at 50 percent or less of their market value make home-ownership very affordable.

**Building a relationship with a lender's REO (real estate owned) department can help when it's time to make a deal.

Source: Frontdoor.com (10/29/2009)

Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.

Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.

Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)

Yes time is ticking but it is not too late if you are a determined first-time home buyer to take advantage of the $8,000 federal tax credit, which expires Nov. 30.

To identify those properties that can close by the Nov. 30th deadline for the home buyer tax credit prior to sending a lot of time viewing them, ask these important questions that aren't likely addressed in the listing. These can include:

Is there mold?
A need for extensive repairs?
Aging systems or appliances?
Troublesome neighbors?

Buyers should factor in these questions before making an offer:

How long has the property been on the market?
Have there been any price reductions?
Are there any offers written on the property?
Do the home owners need to move by a specific date?

Other recommendations include:

Obtain as much information about financing as possible so you can make an offer.

Avoid short sales as they may take longer to close.
Begin the process right away.

For more tips, contact places2love@gmail.com or 404.444.5777. Happy House Hunting!

Source: Move.com, Scott Voak (09/23/2009)

Here's how the most common foreclosure-prevention scams work:

The desperate home owner gets a letter that says something like, "We know you're having a hard time. We have a pipeline to your lender and can help you save your home. Call this toll-free number now."

Home owners call the number and agree to pay $1,200 to $1,500 upfront for help with their mortgage. Nothing happens. Their home still goes into foreclosure.

Harold Kirtz, a lawyer for the Federal Trade Commission who is prosecuting these scammers, says victims are often well educated and financially savvy, but they also are "in a very vulnerable state."

Here are some red flags that should make a home owner run in the opposite direction:

1. If the company guarantees success. Nobody can guarantee a lender won't foreclose or will modify a loan.
2. If the company wants money upfront. "We can't say all advance fees are illegal," Kirtz says, "But in most cases they're probably bogus."
3. If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Source: Washington Post Writers Group, Kenneth R. Harney (09/13/2009)