Rob Kelly

I sure have been thinking alot about trash lately! We received our new trash, recycling and compost containers recently and now I need to think about which bin my trash goes into. It's all good, but I need to learn what goes where and when to put the compost bin out for pickup vs the recycle bin.

In Louisville, we are Thursday Schedule E and this week is our first compost bin pickup.

Here's the link to Western Disposals collection calendar: http://www.westerndisposal.com/wp-content/PDFs/calendars/2009/Thursday%20E%202009.pdf

Also I found this page on their site to sign up for email reminders for holidays.
Western Disposal e-minder sign up http://www.westerndisposal.com/contact-us/e-minders/

Now if anyone knows which bin my Starbucks cup goes into please let me know.

Happy Recycling!

Rob Kelly REALTOR®,CDPE
www.RobKellyColorado.com
www.DenverForeclosureTour.com

RE/MAX Alliance
225 South Boulder Road
Louisville, CO 80027
720-284-9211 Cell

REAL ESTATE MARKET UPDATE

An Information Service of RE/MAX Alliance/Boulder Valley

June/2009

As we begin the trek toward the dog days of summer, below are some thoughts about the nature of the home mortgage industry and the real estate market in general. It's important to understand and acknowledge that the old way of purchasing real estate i.e. do you have a pulse and can you spell your name, as the only criteria for acquiring a loan, are gone forever. Lenders, appraisers and title companies today are no longer risk oriented. They are playing by a whole new set of rules and the rules aren't always particularly favorable to the buyer or seller.

Financing in today's real estate market is taking longer to obtain and more difficult to get. When a lender says we can get you approved in twenty-four or forty-eight hours, that usually means we can get you approved subject to an acceptable appraisal and you bringing in every financial document you've ever owned for us to cull over. If your loan is being sold into the secondary market i.e. Fannie Mae or Freddie Mac, it better be an A+ loan or the lender will have to belly-up to the bar with the funds. Fannie Mae and Freddie Mac are not in the business of being the depository for loans that may potentially go south. They have too many of those on the books right now.

In today's economic client, most people are looking for a deal. Whether it's the best price on a home, a car or your cable bill. This is the age of "negotiation". As such, many lenders are willing to negotiate to get your loan. They'll use phrases like ... no problem getting you approved in two weeks ... or ... low/no closing costs ... or ... we can get you a loan 1% under the market ... etc. Be cautious of lenders bearing gifts; read the fine-print; make-sure you understand the Truth in Lending disclosure. What appears on the surface to sound great, may result in not being what you envisioned or what you were led to believe.

The Boulder County real estate market continues to ebb along. The inventory of available single-family homes is down slightly over 14% this time of year versus last year. Through May, sales are off around 38% for single-family homes and the same for attached units as compared to 2008. The spring sales push, which the market normally experiences, has not exhibited the same level of energy this year as the previous three years. Homes continue to sell, and sales are increasing, but not an exponential rate.

So, the question in most people's minds is: Where to do we go from here if we want to buy or sell real estate? Unfortunately, there's no simple answer to that question. People who are attuned to risk see this as an opportune time to take advantage of current market conditions and invest in real estate. They look for deals. They are willing to negotiate. They know that real estate markets have historically trended-up over time.

Other people may be much more conservative. Risk isn't in their blood. They have a tendency to wait and see what happens rather than try to anticipate what might happen. Often the path of least resistance is not to leap, but rather to sit on the sidelines and get in the game when the timing feels comfortable to them. No problem with that.

For those individuals who are willing to roll the dice and step to the starting line, now is an excellent time to give some consideration to making that move or to invest in real estate. There are opportunities out there to be had. Motivated sellers and relatively low mortgage interest rates make for good bed fellows.

I work with alot of first time home buyers and have had many questions regarding the $8000 tax credit. Here's a nice piece about First Time Home Buyers Tax Credit.

First-Time Home Buyer Tax Credit
Answers to the most commonly asked questions
by Land Title Guarantee Company
May 2009

In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation that provides a tax credit of up to $8,000 for first-time home buyers. The American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009, is a stimulus package that makes a non-repayable tax credit of up to $8,000 to qualified first-time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009.

• The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.

• The tax credit does not have to be repaid.

• The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

• The credit is available for homes purchased on or after January 1, 2009, and before December 1, 2009.

• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

The following information has been edited for length and is used with permission from the National Association of Home Builders' website, www.FederalHousingTaxCredit.com.

Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home-new or resale-are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009, and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the homeowner.

What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his or her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How is the amount of the tax credit determined?
The tax credit is equal to10 percent of the home's purchase price up to a maximum of $8,000.

Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phase-out range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends, and capital gains. To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions, and deductions for higher-education costs.

If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phase-out limits.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.

What home types qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes), and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer's tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

Do I qualify if I bought a home in 2008?
No, but if you purchased your first home between April 9, 2008, and January 1, 2009, you may qualify for a different tax credit. For more information, visit FederalHousingTaxCredit.com.

Great clip-

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Rob Kelly REALTOR®,CDPE
www.RobKellyColorado.com
www.DenverForeclosureTour.com

"Thinking of Real Estate? Think of Rob!"