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How do I file for the First Time Homebuyer Tax Credit?

If you are a First Time Homebuyer who qualifies for the First Time Homebuyer Tax Credit, here’s how to file and receive your credit.

You have two choices: you can file to amend your 2008 tax return, or wait and file in 2009.

How to amend your 2008 tax return:

1. Download Form 5405 ”First -Time Homebuyer Credit” from the IRS website. Use this link to determine the amount of your credit.
2. Then download Form 1040X  ”Amended U.S. Individual Income Tax Return” to amend your 2008 return.
3. Fill out the amended credit amount on Line 15 under Payments.
4. File Form 1040X along with Form 5405.
5. Any refund due will be sent to you.

Filing for your credit in 2009:

1. File Form 1040 as usual.
2. On Line 69, enter the amount of your credit calculated using Form 5405;
3. Be sure to attach Form 5405 to your return.
4. Your refund will be sent to you.

Be sure to consult your tax professional for further information.

Contact me for assistance in purchasing your first home.

First Time Homebuyer Tax Credit – Update

Senate votes today to extend the first time homebuyer credit through April 30th, 2010.

Once the Senate votes, the House is expected to follow suit and then off to Obama’s desk for signature.

Here are the details of the new and improved credit:

1. The First Time Homebuyer Credit of $8,000 will be applicable through contracts in place by April 30, 2010. This allows for 60 days to close the transaction past this date.
2. In addition, repeat buyers — those who have lived in their previous home for 5 of the last 8 years — will qualify for a credit of $6,500 for purchases between December 1, 2009 and April 30, 2010.
3. Couples earning as much as $225,000 and individuals as much as $125,000 would qualify for the extension, an increase from $75,000 for individuals and $150,000 for couples.

Act quickly:

“The American people should understand this — and the affected industries — this is the last extension,” said Senator Johnny Isakson, a Georgia Republican who cosponsored the plan. “Tax credits like this only work by creating the sense of urgency to take advantage of them.” See the entire article.

 

http://www.bloomberg.com/apps/news?pid=20603037&sid=ai5ZNuz56Q4g

Will the First Time Homebuyer Credit be extended?

“First-time buyers would continue to get an $8,000 credit, while repeat buyers of primary residences would be eligible for a credit of $6,500.”

In an article on the CNBC website, we are told that key senators have agreed to extend the popular first time homebuyer tax credit through April of next year. In addition, the credit will apply to non-first time homebuyers in the amount of $6,500 for the purchase of primary residences. First time homebuyers make up a large percentage of home purchases, and extending it is key in keeping the housing market going. Read the entire article here.  If you would like more information on taking advantage of the credit, give me a call!

5 Tips to Getting Your Short Sale Offer Accepted

Why is it so competitive for buyers? The answer is that 68% of distress sales are receiving multiple offers. This is especially true in the affordable home range. Here are some strategies for your offer to make its way to the top of the pile.

1. Ask your lender to provide FULL loan approval and submit it with your offer. Your offer will have a huge advantage over others because it shows that financing will not be an issue in closing the transaction.
2. Submit your offer with Direct Lender approval. If your lender is not a direct lender, you can seek a preapproval from a direct lender, such as Bank of America, but you are under no obligation to use that lender.
3. Use Rebate Pricing to help pay for closing costs and minimize seller contribution. As a buyer you pay a slightly higher interest rate (.25 or so) and the lender credits additional commission back the buyer to assist with closing costs.
4. Ask your lender to contact the listing agent on each offer you submit. A good lender will communicate the highlights of you as the borrower and instill confidence about closing on time.
5. Communicate to the seller through your Realtor® that you are a committed buyer and will stay the course through the sometimes difficult transactions we are experiencing in this market.

If you have questions, or need a referral to a lender who can assist you with this high level of service, contact me and I will forward you on to the right person.

Does it have Mello Roos? Checking assessments for Placer County homes for sale.

You have found the perfect home, and then the question, “Does it have Mello Roos?” rears its ugly head.

Many new homes in the Lincoln CA area, as well as Rocklin CA & Roseville CA, carry Mello Roos assessments which can add upwards of $300 to your monthly payment. So how do you really know if there are Mello Roos assessments affecting the property you are interested in buying? Well, there is one surefire place to find out: the County Tax Assessor’s website!  Here’s what to do:

1. Go to http://www.placer.ca.gov/Departments/Tax/Taxes/TaxBillSearch.aspx
2. Enter the Assessors Parcel Number (APN) into the form (you may need to scroll down a bit to see the box).
3. Voila…the tax bill appears.

On the tax bill you will see various entries including the tax year and if taxes are paid up or not. Toward the bottom of the table is section called  Tax Code. You will see a list of assessments with the amounts broken down for each half of the year when taxes are due. The first entry will be Property Taxes, followed by various school bonds, local assessments, such as mosquito abatement, etc. Any entry that has MR after it is a Mello Roos assessment.

Don’t assume that just because the property is in a Mello Roos-laden area that there are Mello Roos to be paid. A few years ago, as property values began to fall, builders gave incentives to home buyers, one of which was to pay off the Mello Roos bond.

If you need help finding any of this information, or need an assessor’s parcel number for a particular property, ask me. I’m happy to help.

What is Mello-Roos?

Is there Mello-Roos?  is the familiar cry heard in many communities around California from buyers shopping for homes. So what is Mello Roos?

The Mello-Roos Community Facilities Act was created in 1982 to provide a means of funding community infrastructure such as sewer systems, streets, landscaping, fire and police protection, libraries, parks, schools, etc. Mello Roos bonds remain in place and are paid along with property taxes for as long as it takes to pay the bond off, oftentimes for upwards of 20 years. When a property changes hands, the obligation to continue paying this bond is passed to the new buyer. It is the responsibility of the seller to disclose any knowledge of this bond to the buyer.

To find out if a property has Mello Roos assessments, check out this post.

To search for homes in the area, click here.

How do I qualify for the $8,000 First-Time Homebuyer Credit?

Time’s running out to buy a home and collect $8,000!

What is the first-time homebuyer credit?

The First-Time Homebuyer Credit was enacted as part of the Housing and Economic Recovery Act of 2008. If you purchased a home in 2008, you must repay the credit over a 15-year period. However, if you purchase a home in 2009, the credit does not have to be repaid, as long as you remain in the home as your principal residence for 3 years.

How do I qualify?

1. You must be a first-time homebuyer which means you have not owned a principle residence during the past 3 years.
2. You must purchase and close on a home prior to December 1, 2009.
3. You must make less than $75,000 per year for individuals, and $150,000 for couples to receive the full credit.

How much is the credit?

For homes purchased in 2009, the credit is 10% of the home’s value, or a maximum of $8,000.

How do I apply for the credit?

You must file an IRS Form 5405 with your 2009 tax return.

What if I don’t owe taxes. Can I still get the refund?

Yes. For example, if you owe $4,000 in taxes, and you are eligible for the full credit of $8,000, then your refund would be $4,000.

 More questions, feel free to contact me.

So you’re buying a home – 10 Steps to Closing Escrow

Today’s the day! Your offer has been accepted! Now you wonder…what happens next? It’s time for the team to get to work. Your lender, title company and realtor is the Dream Team that works to get the job done!

Here are the steps to getting the keys to your new home.

1. Buyer’s remorse. Expect it. Everyone gets it. Then get over it! You’ve wanted to get to this moment through months of looking, writing offers, getting beat out, writing more offers, and on and on. You’re where you want to be! Let’s get the escrow closed!
2. Contract and Earnest Money to Escrow. Your agent will arrange for the fully executed contract (signed by both buyer and seller) to be delivered to the title company handling the escrow. Your deposit check is deposited with the title company and cashed at this time. Keep in mind that if the contract is cancelled, the escrow officer must receive mutual agreement from both buyer and seller before earnest money can be returned. Your agent is responsible for making sure you stay within the bounds of the contract so that your money is protected.
3. Loan Approval. As soon as possible after agreement, meet with your lender to proceed with loan approval. Loan approval has the longest lead time in the escrow process, so it is important that you get on this as soon as possible to avoid any delays. Your lender will also schedule an appraisal to ensure that the  purchase price is supported which is necessary for loan approval.
4. Inspections. Your agent will schedule any desired inspections that you are responsible to pay for. You are free to choose the inspectors, or your agent may have referrals for you. He or she will receive reports of any inspections coordinated and paid for by seller. You are welcome to be present at the inspections, and most inspectors welcome any questions you might have.
5. Disclosures. The seller must deliver to your agent required disclosures about the property such as the Transfer Disclosure Statement (TDS) and Seller Property Questionnaire (SPQ), usually within 7 days of agreement. Through these disclosures, the seller must reveal any material facts that might influence your decision to purchase the property. 
6. Negotiate repairs. Should any of the inspections reveal items needing repair, you may ask the seller to address them through a “Request for Repair” form provided by your agent.
7. Contingency Removal. Once the loan is approved, the appraisal comes in at value, and all inspections and disclosures have been reviewed, it is time to remove all contingencies and move to close the escrow. This must be done in writing by your agent and usually occurs at Day 17. At this point your earnest money deposit is now committed to the contract, and the seller has a right to pursue this money should you cancel the contract past this point.
8. Moving to Close. The loan documents are prepared and sent to the title company, and you will be contacted by the title company to set an appointment to sign them.  You will also need to bring necessary closing funds in the form of a cashier’s check in the amount given to you by the escrow officer The seller will also set a separate appointment to sign their necessary closing documents.
9. Final Walkthrough. Within 3 days before the close of escrow, you and your agent will visit the property one last time to make sure it is in the same condition as when you made the decision to purchase it.
10. Utilities. Make sure to call the appropriate utility companies to schedule your utilities to be transfered over. Your agent will be able to supply you with a list of local companies.
11. Closing. A few days after signing, depending upon the lender and title company and their schedules, your loan will be funded and the deed will be recorded at the County Recorders Office.
12. It’s all yours! Your realtor will meet you to hand over the keys to your new home!

Remember that you don’t have to do all this alone! Your agent will help you through every step of the way. He or she will keep you on track with the timelines of the contract, and protect your interests throughout the process. Nothing ever goes completely as planned, so your agent and other professionals on the team will help navigate any pitfalls and get the transaction back on track.

Buy, sell or hold? Auburn CA homes for sale and real estate trends.

Do you wonder if it’s a good time to buy an Auburn CA home? Real estate mogul Donald Trump said a few months ago in an interview on Good Morning America: “If you want to buy a house there’s probably never been a better time.” Trump also commented that the golden real estate rule of location, location, location still applies. He said to hold off selling if you can, but if you do need to sell, make sure your home is in the best condition possible. He may not have a hair style to emulate, but he seems to have the knack for real estate investing!

We are bombarded daily with negative headlines about the real estate market. I had a conversation with my mother-in-law on Thanksgiving Day about this very subject. She said, “yes, it’s a great time to buy, but there’s no money to lend.” That is a commonly held belief that is absolutely not true! Yes, qualifying is more stringent, but there is money to lend. FOR BUYERS, there has not been a better time to buy in a very, very long time. Some of you may say, “We haven’t hit bottom yet.” The only sure way to know we’ve hit bottom is to be looking back at it.

Isn’t it ironic that when prices were rising a few years ago, buyers were doing everything they could to buy…even when the advantage was to the seller! They were afraid of missing out. Now that the advantage is to the buyer, they’re afraid once again, but this time it’s the fear of possibly paying too much. We have had a 20%-plus decrease in median home price in the greater Auburn area in the past 2 years. This is the point when smart buyers decide it’s time to buy a home. They know they can’t predict the end of a slump, but they know there has been a considerable fall in prices, and it’s time enough to make a sensible purchase.