Tag Archives: first time home buyers

Deadline looms for housing tax credit

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From Baton Rouge Business Report

Real estate experts are unsure what the end of the First Time Homebuyer tax credit will mean for the housing market at the end of this month, yet so far more than 32,000 Louisianans have collected $224 million through program, according to the New Orleans office of the IRS. Overall, 1.8 million taxpayers have benefited from the expanded program through the stimulus act, according to the Treasury Department.

Purchasers must have a binding contract to buy a home by April 30 and must close on the home in the next two months to qualify for the $8,000 credit for first-time buyers; certain other purchasers can qualify for $6,500 credits.

If Louisiana housing history is any guide, a recovery in the market is due by 2011, but there is a significant hole to climb out of, according to First American CoreLogic. The firm recently said its Loan Performance Home Price Index showed a peak-to-current plunge in national prices of 29% from April 2006 to January.

“The cumulative loss in home prices . . . is more severe than the next worst housing recession of 24% cumulative decline, which began in Louisiana in the mid-1980s,” says Mark Fleming, chief economist for First American CoreLogic, in a statement. “It took Louisiana five years to recover from the bottom; we expect this recovery to take at least as long.”

Yet through March, the average sales price of a home in the greater Baton Rouge area was $192,782, according to Realtor data, while in 2006, the average price was $186,035. Speculation on how much of a “shadow inventory” is out there— foreclosed-on houses that banks have not put on the market yet—is another factor in gauging the hoped-for recovery. That fuzzy figure varies wildly in the media between 1 million and nearly 18 million units.

—Todd R. Brown

Buyers becoming more successful finding homes through the internet

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RIS media is reporting the rates on which buyers are finding their home online.  Typically, the buyer finds the home and then contacts a real estate agent.  This is interesting on 2 fronts.  One is that realtors need to actively market their properties not just on the local listing service. They need to be online in as MANY places as possible.  Secondly, that homeowners need to have the home IMMACULATE before putting it on the market.  The realtor, or even if it is FSBO, will be putting pictures online.  This is the FIRST image that buyers will see in most cases these days.  They should be clean, clutter free, and make the home look like it just came out of a home improvement magazine!  Read more on the article at www.beautifulbatonrougehomes.com

Tim Houk

Expanded Tax Break Available for 2009 First-Time Homebuyers

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WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.