I’m sure most people are familiar with the Homebuyer Tax Credit of up to $8,000.00 that has been available from the summer of 2009 through November 30, 2009. just in case you did miss it let me summarize that program. A tax credit of up to $8,000.00 was available for first time home buyers if their income levels qualified and the price of the home was within certain limits, the amount of the credit was determined by these factors and marital status and the need to close on the sale on or before November 30, 2009. The credit is received as either a payment of taxes owed on the return or will pay the taxes due and refunded the difference, or will be added to the refund on returns.

 Here are some of the features of the new, revised  Extended Homebuyer Tax Credit:

• The credit can be taken on the 2009 or 2010 tax return and does not have to be paid back
• The accepted contract must be attached to the Tax return the buyer will be taking the credit on.
• To qualify the contract must be written and accepted on or before April 30, 2010 and the sale must be closed by June 30, 2010
• The new law gives the IRS broader flexibility  deny requests for first time buyer credits. ( This is most likey in response to a large number of requests for the Homebuyer Tax Credit  under the previous offerign that have turned out to be fraudulent.) That said be sure to discuss your ability to qualify with your Accountant and your Realtor.
•  Military persons serving outside the US have an additional year to use the credit
• Income limitiations are $125,000- $145,000 for individuals and $225,000.00- $245,000.00 for joint filers 

As an added opportunity to take advantage of the Homebuyer Tax Credit, the new bill is expanded to include people who who have lived in a home as their principal residence for 5 consecutive years of the past eight years and those who qualify will receive up to a $6,500.00 tax credit. if you read that sentence carefully it says 5 consecutive years of the last eight, not the last 5 consecutive years, which seems to mean if you don’t currently own a home but have lived in one for 5 consecutive years of the last 8 you may qualify!! An example might be someone who got divorced say 2 years ago and had lived in a residence for 5 consecutive years of the past eight, might qualify. Purchase price of the home cannot exceed $800,000.00.

Be sure to have all of your questions answered by talking with a Realtor and Accountant to take advantage of the Homebuyer Tax Credit.

For more  information about the Homebuyer Tax Credit go to the IRS Website at http://www.irs.gov/newsroom/article/0,,id=204671,00.html  or www.Realtor.com .

The current real estate market is driving Short Sales and until there is a better solution than Short Sales the Foreclosure market will continue to grow. Short Sales typically are listed at a price lower than the last short sale and then are negotiated down in price to create a sale and the cycle continues, driving values down. You may not be too concerned but you should be because short sales are nothing more than a housing virus. When you see a home in your neighborhood go up as a short sale begin to worry because if/when it sells the value of your home will most likely go down in value. The short sale process has caused more and more homeowners to go from having equity in their home to becoming upside down, owing more than the market value  and then having it continue to decline as more homes go on the market. I guess its OK if one doesn’t have to move but what if you have to relocate because of a job, what it you lose your job, you get a major illness or any number of things that can take you from being comfortable, waiting out the storm to being faced with losing everything.

The really unfortunate thing is that this could have been taken care of in very short order and most likely at much less cost to the economy as a whole if things would have been done differently in the very beginning. In 2005-2006 the housing cycle should have started to contract, it didn’t, the lending industry jumped in and did what ever it could to sustain a rising market when it should have started to contract, they did this by developing loan products that they had to know would only lead to failure, they did it for home purchases and refinances. How you say, well they tore down the walls to responsible lending, creating “stated income loans”, took normal qualifying loan to debt ratios from the 28-36% range to as high as 55% and more! Many want to blame the consumer saying they should have know better. That might be an argument, however, I disagree. Consumers come into the marketplace seeking professionals, relying on them to provide them with honest reliable information whether its is for loans or automobiles or houses or consumer goods in general, otherwise why do the need you?  People were not given reliable and honest information by the lending industry.

So how do we ”fix the housing industry” well we are eroding the buyer pool that has led us out of financial downturns in the past and that is the first time buyer market. In past recessions the 1st time buyers would enter the marketplace, buy homes and create “Housing Push”  which quite simply is buying a home from one owner “pushing” them into another one and into another and into another and so on and so on. Think of a checkerboard and picture a family on each one of the squares, those are families in homes they own, when first time buyers came into the market they pushed those people up to another square pushing that family out etc. A first time home buyer accounted for a number of sales and all of those sales created “economic push” because of the consumer goods that would be sold as a result of people buying those homes, paint, landscaping, furniture, hardware goods, large sums of money being delivered right into the economy by large numbers of people.   What’s happening today is much different. First picture the checkerboard, now take about 25%+/-  of those families off of the squares because the home has been foreclosed on, if/when it sells, no push, now look at the rest of the homes and consider that many of them are being sold as short sales, again, no push because those families are not going to buy another house, so the very market that has been responsible for economic recovery in the past is now being gobbled up by vacancies, foreclosures and short sales, the push is almost nonexistent, kind of depressing isn’t it, well this is even more depressing, this could have all been avoided last year! How you say, go back to 2005-2006 when the lending industry forced the market to continue to rise when it should have been contracting, from that point on home values became overinflated to about 25% more value than they should have had, this occurred on homes that sold and homes that were refinanced through the period or until late 2008. To correct the problem and put and end to it and since money was being spent anyway, a plan should have been devised to roll back the loans made during that period by 25%+/- using a combination of government funding and lender participation.

With all that said, here is the good news, there is STILL a Solution!! Can you guess what it is? Share your thoughts, see if you can figure it out.

By the way, everything that is written above has been sent to legislators so this isn’t something I’ve kept to myself, there just isn’t anyone listening. You say why should they listen to me, 36+ years in the real estate industry as a builder, land developer, business owner, appraiser, Broker, conciliator, trainer, Board of Director and RE Sales Consultant.

This post gives you some tips about what happens when you go out there and start doing searches, fill out forms etc. There are a number of sites which you might consider as third party sites or neutral sites that you can get information from without making commitments. When you fill out forms on these sites most likely your information is being provided to agents who have agreed to pay these sites fees if the agents can get you to work with them. You should also be aware that sometimes you may be looking at a listing at a third party site and you might be led to believe that an agent, prominently displayed with the listing is the listing agent and you should call them, this is NOT necessarily so. Some of the agents have paid the third party sites fees to be placed in this way. The point is if you really want to talk to a listing agent about a listing you may not being talking to the person you thought you were.

So what do you do about all of this? This may be of little or no concern to you and that’s good, however if you feel you want to be able to choose who you want to ultimately work with, ask some basic questions Like “Are you the listing agent for the property at 123 easy Street”? If not “Can you provide me with information on how I can contact them”? Another question would be “how did you get my info”, they should be able to tell you what site provided them the info and you might ask them, “if you would decide to work with them to solve your real estate transaction would they be paying that site a referral fee”? Again this may or may not be important to you and that’s fine, you still have the right to know upfront.

So why is this important to you? When you decide to work with a Real Estate agent to help you buy or sell real estate you are given or should be given the opportunity of how you want to be represented because of Agency Laws that are regulated by the State the agents work in. The choice of Agency should be offered to you long before you get into specifics of your real estate needs like financing, reasons for buying or selling, discussions of making offers, making offers etc. Most consumers don’t realize the importance of the agency relationship they establish with a Real Estate agent, you should!

Wrong! Think about it, let’s say it takes 30 days to find the right house, then 5 days to negotiate the deal, then another 30 days to do the inspections, finalize the loan and closing preparations and that is a pretty “perfect” picture not considering anything going wrong, what if the building inspection reveals some serious items that can’t be resolved, or a title issue comes up that will take time to get corrected or any number of things that might go wrong, but in the “perfect scenario” it only leaves you 50 days of room to be able to qualify for the Tax credit, why not stop putting it off and take advantage of this gift/opportunity you have? Are you unsure about how it works, did you know that if you have not owned a home for the past 2 years you might qualify as a first time homebuyer. Remember in a perfect real estate deal and from the day this is written October 11, 2009 is the drop dead date to be able to take advantage of this and October 11 will be here before you know it. In the Greater St louis Area get started at www.buyahomeinchesterfield.com