Housing Experts: The Ship Is Slowly Turning Around

On March 23rd Jack Schrand appeared on WCPO-TV Channel 9 in Cincinnati in their story "Housing Experts: The Ship Is Slowly Turning Around". Reporter, Tom McKee, interviewed Schrand and other key players in the local real estate industry from the Cincinnati Area Board of Realtors. You can read the written article or view the television segment at this link.

There are certainly opportunities available in this market. If you have been thinking of making a housing move or are planning to purchase your first home please call us. We will help you get a realistic perspective of the opportunities and realities of today's housing market. While this is an excellent time for some to make a move; it may not be for others. Let's talk about it.

What is a Short Sale?

Short sales are becoming more common in today's market because some home owners owe more on their mortgage than the home will sell for. In a short sale the lender, or lenders if there is more than one mortgage, is willing to accept less money than is owed to pay off the mortgage(s). The home is then sold "short" of what is owed. This allows both the home owner and their lender to avoid the expensive and devastating prospect of foreclosure.

The lender is not required to accept a "short sale" offer and often takes a long time to come to this decision. In most cases short sales are anything but "short". It usually takes much longer to receive an acceptance to your offer than would normally be the case. We may be talking weeks or even months instead of days. They are not for everyone; but sometimes offer an opportunity to purchase a home at a slightly less than market price. The homes are almost certainly sold "as-is" and frequently involve some deferred maintenance.

The bank involved is sometimes willing, and often eager, to continue to look at and accept other offers from different buyers until a written acceptance is obtained. As stated already, this may take some time to receive. This type of purchase is not for the faint of heart. Disappointments often occur. It is so very important to have a Realtor working for you who can guide you through this process. If you don't like surprises then a more traditional purchase may suit you better.

If you would like to discuss the opportunities available to you in this market we are ready to assist you. Whether it's a short sale, a foreclosure or a traditional sale it pays to know what's involved before you make the leap. There are also many financing opportunities that should also be discussed. Call us. We can help.

Frequently Asked Questions About the 1st Time Buyer Tax Credit

Question: If I haven't filed my 2008 income tax return yet can I claim the the $8,000 credit for a home purchased on or after January 1st, 2009?

Answer: YES! You can claim it on your return due April 15th. You can file for an extension or even amend a previously filed return.

Question: Do I have to repay the tax credit?

Answer: Not as long as you stay in the home for three years.

Question: Is there an "adjust4ed gross" income restriction (line 37 on IRS form 1040)?

Answer: YES> It's $$75,000 for single or head of household. It's $150,000 for marries couples filing jointly.

Please check with your own tax advisor to confirm your own personal eligibility for this program.

Says it all!

Thanks to Dan in Florida for sharing this insightful depiction of retirement.

Reds Schedule Magnets

This is a sure sign of spring! We have ordered and soon will be sending out magnetic Reds Baseball Schedules for your refrigerator etc. If you have received them in the past you should get one again this year. If you would like to receive one and you haven't received yours by early April please call us. We will make any extras available on a first come, first served basis.

Homebuyer Tax Credit Increased to $8,000

On February 17th, 2009 Congress passed and President Obama signed into law the American Recovery and Reinvestment Act of 2009 known as "The Stimulus Plan". One of the key provisions for real estate purchasers is the expansion of the home buyer tax credit program. It's a major perk for certain home buyers.

1. This program's full benefits are available for single persons with adjusted gross income (line 37 on your 2008 1040 federal income tax return) up to $75,000 0r $150,000 for married couples filing a joint return. Partial benefits are available for single persons with incomes between $75,000 and $95,000, or for married couples filing jointly with incomes between $150,000 and $170,000. You may take the tax credit in either 2008 or 2009. If the eligible purchaser's federal income tax liability is less than the homeowner tax credit, the purchaser may receive a refund from the IRS for the unused amount. Consult your tax advisor for full guidance. This is merely meant to introduce you to the possibilities that may be available to you within this program.

2. When you hear on the news that this program is only for first-time buyers that's not entirely true. This program benefits first time buyers and anyone who hasn't owned a home in the immediate three previous years.

3. The program has been expanded. The maximum* tax credit is now $8,000 for eligible buyers (see #1 above) instead of last year's $7,500.

* The tax credit amount is 10% of the cost of your home up to a maximum of $8,000. If you sell the home after receiving the tax credit you would owe the government a repayment for the tax credit taken plus the amount of refund to you as a result of this program. The IRS will be providing further guidance regarding how this can be accomplished.

Note 1: buyers who use state revenue bond financing may also use this tax credit. This could include the OHFA Bond Loan or their MCC tax credit.

Note 2: You cannot purchase a home from a close relative and receive this credit. This could include your spouse, a parent, a grandparent, a child or a grandchild.

4. The most important feature is that this is a TRUE TAX CREDIT on the purchase of a new or an existing home.

Example: Let's assume that your tax liability would be $12,000. Simply subtract up to $8,000 from your normal income tax liability and your effective liability is reduced to $4,000 in this example. If you've already had $12,000 withheld from your pay for federal income taxes then you could receive an eight thousand dollar refund check from the IRS.

Last year's program required that you repay the tax credit amount back to the IRS. That's no longer the case for homes purchased between January 1, 2009 through November 30, 2009 unless you sell your home within three years. If you bought in 2008, any tax credit is subject to repayment to the IRS over a 15 year period. That was the 2008 plan.

This home buyer tax credit is for owner-occupied homes in the U.S. that are used as a primary residence. Vacation homes and rental property are not included. You can have only one principal residence at a time.

You can see that this program clearly offers tax advantages to certain prospective home buyers. Please call The Schrand Team (513-347-1715) to take advantage of this program yourself. Or tell a friend who may qualify. As stated above, please contact your tax advisor to confirm that this program will apply to you.