Housing Bill Passes!

President Barack Obama inked his approval of the bill extending and expanding the homebuyer tax credit incentive Friday morning.

The housing tax break, which was initially set to expire at the end of this month, is now available to buyers who sign a contract by April 30, 2010, and close by June 30.  The credit amount is based on 10 percent of the home’s purchase price.  The maximum available to first-time buyers is $8,000. Other buyers, who’ve lived in their current residence for at least five years but want to relocate to a new primary residence can receive a credit of up to $6,500 – the incentive for these so-called “step-up” buyers will begin on December 1 of this year.  The income limits for both first-timers and step-up buyers is $125,000 for individuals and $225,000 for couples – up significantly from the current first-time buyer thresholds of $75,000 per individual and $150,000 per couple.  The tax break is only available on primary residences priced at $800,000 or less. Vacation or investment properties are not eligible. Beneficiaries who sell the home or stop using it as their primary residence within three years would be required to repay the credit.

“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter,” President Obama said at a national address in the White House Rose Garden Friday. “We want to give even more families the chance to own their own home.”

The expansion of the homebuyer tax benefit received widespread support from lawmakers, despite concerns over what it might cost the government in lost taxes.  The measure passed unanimously in the Senate earlier this week and cleared the House with a vote of 403 to 12.

President Obama assured the American people this morning that the homebuyer tax credit measure, which was attached to a larger bill extending unemployment benefits, would not increase the national deficit.

 

Federal Tax Credit

We are happy to report that the Senate skipped a step last night, did not invoke cloture but just went right to a vote on our bill – and passed it 98-0! As we have said before, things in Washington aren’t always predictable.   The bill now goes to the House, where a vote is expected today.  Keep your fingers crossed!

 

Burt's Pumpkin Farm

There are some things that you just have to experience yourself. One of the area’s best is the fall season at Burt’s farm in the secluded North Georgia Mountains where the only thing more beautiful than the fall foliage is the sea of orange created by thousands of Burt’s pumpkins. At Burt’s farm they have pumpkins that range from an eye popping 150 lbs. to a modest 1 lb. They grow thousands of pumpkins, so the selection is vast and the quantity is never ending. One of the most fascinating features of Burt’s farm is the impressive selection of every type of pumpkin, winter squash, gourds and fall decoration. Indian corn, cornstalks and hay bales are also in never ending supply at the farm. They also offer hayrides and fieldtrips pulled by John Deere tractors that take you through a winding trail filled with nature and beauty. Don’t forget to check the “barn” store for Burts fresh baked pumpkin pie and pumpkin roll, candied popcorn and a whole assortmen of other goodies, also shop for Burt’s farm wear and other fall decorations. Keep in mind that there are no pets allowed, so you’ll have to leave the dog road trip for another day.

Check it out! It’s FREE!

Slashing Mortgage Costs

NEW YORK (CNNMoney.com) — A plan announced today by Bank of America will be the most aggressive foreclosure prevention effort ever undertaken by a U.S. bank.

The program, scheduled to start in December, will be open to distressed borrowers who signed up with Countrywide Financial between January 1, 2004 and December 31, 2007. Countrywide was acquired by Bank of America (BAC, Fortune 500) in July.

It came in a legal settlement that the company entered into with the attorney general offices of 11 states, who had sued Countrywide over predatory lending practices, but the company stated that borrowers in all 50 states will be eligible to participate in the program.

“The Countrywide settlement is a watershed moment for loan modification programs,” said Mark Pearce, North Carolina’s Deputy Commissioner of Banks and a member of the State Foreclosure Prevention Working Group. “This is, by far, the best [program ever], even better than the FDIC program with IndyMac Bank.” As part of the initiative, Bank of America will cut monthly housing payments, including mortgage, property taxes and insurance, to no more than 34% of gross income. The move is expected to help keep as many as 400,000 troubled borrowers in their homes.

The program targets holders of subprime adjustable rate mortgage (ARMs), subprime fixed rate loans and option ARMs, but prime and Alt-A borrowers, who did not document their income, will be eligible as well.

Call Pendleton & Associates to see how we can help!

Lake Lanier at Sunset

 

As the warmer days of summer are upon us, I think back to last summer when all that was talked about was the lack of rain and the waining lake levels. With higher than normal temperatures this spring and early summer, we kept our fingers crossed that this summer wouldn’t turn out like last, and force severe water restrictions throughout the county.

As of this morning, the official lake level is 4.71 feet below full pool. While there has historically always been a rise and fall of the overall lake level throughout the year, the level today is significantly higher than that of 2008, and slightly higer than 2007 AND 2006. In fact, we have to look all the way back to this date in 2005 before we see higher lake levels. A great statistic in the midst of all of the negative we seem to be bombarded with. I know I and my dogs are happy about it!

All our best!

First Time Home Buyer Tax Credit

Bringing the Dream of Homeownership Within Reach!

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Home Pricing

Despite the fact that declining home prices have been grabbing headlines for several months now, it can be a challenge for any of us to let go of what we had hoped our home would sell for.

It’s often the case that, prior to listing their homes, sellers interview a few agents, with a plan to sign on with the one who agrees to list it at the highest price. With the understanding that the listing price is ultimately the decision of the seller, not the real estate agent, I’d like to explain one of the most critical dynamics that impacts the actual sales price of a home.

Whether we are in a buyer’s market or a seller’s market, the same principle applies. The most effective pricing strategy for getting top dollar for a home is to price it competitively. This might not seem to make sense at first, but study after study, as well as my own personal experience, has proven that when a competitively priced home hits the market, it generates an instant buzz. Agents begin calling their prospective buyers and lining up showings to ensure that they don’t miss out on a great buy. Bidding wars can even break out.

Let’s contrast this situation to what happens when a home is priced higher than comparable properties. Neighbors and prospective buyers take one look at the listing sheet, and dismiss it as overpriced. The home sits on the market and sits some more. Eventually “REDUCED PRICE!” signs go up. The market starts to wonder what’s wrong with the house since it hasn’t sold.

Eventually, sellers take it off the market or agree to sell it for a much lower price than they had originally hoped.

In any market, competitively priced homes sell quicker and command a higher selling price than homes that factor high hopes into the pricing equation.

As a real estate professional specializing in the Alpharetta and Cumming markets, I diligently track trends as they pertain to the pricing and demand of homes. Want to learn more about how to sell your home quickly and at the best possible price? I’d love to talk with you. Contact me any time at (678)341-7468

Pricing Your Home Right

High inventory lets home buyers be pickier and demand more, all contributing to the challenging market we are in. The most difficult reality for most sellers to face is that prices in their neighborhood may have dropped during the last year or two. Some sellers will find that it may not make sense to sell if the probable sale price is too low. If you have the luxury of waiting for a better market, stay put for now. Before you make a decision to move forward, give us a call and we’ll go over your market numbers with you.

On the plus side, it is an advantageous time for move-up buyers who may be able to sell for less than they would have a few years ago, because they may also pay a lot less for the home they eventually buy. A seller usually has an advantage selling when there isn’t much competition from other listings but that is not the case in today’s market. Today’s home buyers are extremely price-conscious. When there is a lot to choose from, price will certainly be a big factor. A price that’s too high for the market just will not bring the desired result.

Homes don’t necessarily lose value at the same rate in a soft market. In the current environment, buyers are more cautious about what they buy because they know that the property might drop in value before it starts appreciating. They buy for the long term and are less prone to make compromises. The homes that have what most buyers want tend to hold their value better in a down market than do homes that have problems. Homes with defects that can’t be corrected are easier to sell if there’s low inventory. We are now in a strong buyer’s market. This doesn’t mean that you can’t sell your home if it has an incurable defect, however, you will need to account for the deficiency in the price. Keep this in mind when you compare your home with one that sold recently that had one level access, a livable floor plan, or wasn’t on a busy street.

The condition of your property will also be scrutinized more carefully in the current market than it would have been a few years ago. You can sell a property that has deferred maintenence, but you will sell it more quickly and for a better price if you can repair defects and have the property looking great when it hits the market. If this is not possible, take this into consideration in your list price. It is difficult to hit the market price for a property if there haven’t been many recent sales in the neighborhood. If you miss the target and find that your home is priced too high, lower it as soon a spossible. A price reduction is no longer a stigma in this market.

Letting a listing sit on the market too long at a high price sends the wrong message to buyers and could result in a lower sale price if market prices inyour area continue to decline. Pendleton & Associates specializes in agressive marketing and pricing and we can help you sell your home in any market. Give us a call!

Tax Credit

With the deadline for filing federal tax returns fast approaching, the National Association of Home Builders (NAHB) has made information available for qualified home buyers about how and when to claim the $8,000 first-time home buyer tax credit.

The basic eligibility requirements for the credit are: the home must have been purchased on or after Jan. 1 and before Dec. 1, 2009; the buyer may not have owned a home in the three years prior to the purchase; and the buyer must have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers.

Two factors affect the amount of credit qualified buyers can claim: it can only be equal to 10 percent of the purchase price of the home, up to a maximum of $8,000; and it is reduced for buyers with a MAGI between $75,000 for single taxpayers ($150,000 for married filers) and the upper income limit.

To claim the credit, buyers complete IRS Form 5405 to calculate the amount of the tax credit, and enter it on line 69 of the IRS 1040 income tax return.

Qualified buyers have several options for when to claim the tax credit, but they can claim it only after the purchase of the home is complete, which in most cases happens when the title of the property transfers.

Buyers who complete their home purchase prior to April 15, 2009, can claim the credit on their 2008 income tax return. If the qualifying home purchase will be completed shortly after April 15, buyers can file an extension for tax year 2008 and claim the credit when they do file their 2008 return, which must be done by Oct. 15. Or home buyers can claim a qualified purchase on their 2009 income tax return, which they will file in 2010.

Some things qualified buyers should take into consideration when deciding whether to claim the credit on their 2008 or 2009 returns include how quickly they need the refund, and their expected income for 2009. There are no restrictions on how home buyers use the money, but they may want it quickly to pay for expenses related to the home purchase such as moving costs, furniture or remodeling. If they expect their income to change next year, due to factors such as retirement or a salary bonus, they should calculate how the income limits will affect their credit amount.

This information is provided to familiarize consumers with the first-time home buyer tax credit, and is not intended to serve as tax advice or as a legal opinion on tax status or consequences. Individual tax considerations will vary, and it is recommended that a tax professional be consulted to determine how this information applies to particular circumstances.

More information on the first-time home buyer tax credit can be found at federalhousingtaxcredit.com

Here is a great resource that gives an overview of the most recent real estate news.  Of particular interest is the increase in sales activity across the country.  Low interest rates, low prices, and a ton of inventory are driving the push. It’s still a FANTASTIC time to buy a home!