Rhode Island Real Estate, Buyers Agents, Paul Silver

The tax credit for first time homebuyers has been extended, and enlarged to allow hoigher income folks to receive the benefit. In addition, the credit has been extended now to existing homeowners who purhcase a new home. Here are some details:

First-time homebuyers

Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”

• A purchase must be under contract by April 30, 2010.

• A purchase under contract by April 30 must close no later than June 30, 2010.

• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.

• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.

Current homeowner tax credit

An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.

• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.

• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.


Additional changes

The tax credit extension includes other new rules, such as:

• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.

• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).

The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.

I wanted to take a moment to welcome Nancy Rosedale aboard to our real estate firm. She comes to us with 18 yrs experience as a mortgage loan originator, now affiliated with Shamrock Mortgage, with many years of experience as a property investor, owning a number of multi unit apartment buildings, and with great experience in real estate sales.

Nancy will be working the Northern Rhode Island region, from Providence North, and the Southeastern Massachusetts region, including Bristol County and the Cape. She will be working with buyers, listings, and of course, investors. She has been doing a large number of BPOs for foreclosed properties as well, and will continue to do so. Welcome Aboard Nancy!

We also want to welcome Glenn Russell to the world of brokers in RI... Glenn has been a Broker with us in Massachusetts for several years now, and just received his Rhode Island Brokers license this week. Congratulations Glenn on a job well done. Glenn is also a practicing attorney in MA, and has been handling a variety of property related cases there, including a land related suit that is precedent setting. We expect to hear about Glenn's work in this regard in the local and perhaps national media over the next few weeks.

Below is a news brief published by Busines Week Magazine today. My question is, if the banks make it harder to obtain a short sale, will this adversely affect the rate of foreclosures? Perhaps an "unintended Consequence" of making short sales tougher to gain permission on will result in an increase in foreclosures, which will then drive home prices down further, resulting in even more strategic defaults, and a viscious cycle of downward spiraling values, sales.

What is your opinion? How would you recommend banks handle this sort of thing so that there is less negative impact?

From Business Week today, as quoted at Realtor.org:

Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."

Source: BusinessWeek, Christopher Palmeri (10/09/2009)

We have need of a quote for complete demolition of a 2 family house in East Providence... we are hoping to get this ASAP... anyone have a recommended vendor for this sort of thing?

It appears that the house is rotten in structurally important areas, perhaps even termite infested... the structure was built c. 1920... We are seeking to get a quote for demolition of the building as soon as possible.

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Time is of the essence on this, so please bear that in mind...

The vendor will also be asked to quote design build services, if they provide such services, at the same time...

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