Many of my agents have been asking me about the $7500 first time homebuyer tax credit that was part of the government recent ‘modernization act’ legislation.  Whether or not ‘modernization’ is the correct word is a debate for a different newsletter.  I do have my doubts.  Anyway, the $7500 tax credit is a tremendous tool that has come out of this legislation.  If you use the information that I will give you on this, along with the information that I provide in my ’22 Ways to Fund a Down Payment’ e book, you will see many ways to purchase a home now.  By the way, it is the right time to purchase and when we purchase homes we help the economy.  I will soon be releasing a recorded interview with an accountant on this matter, so if you are looking to use this to help sell, please reproduce the recording or this letter and get some sales.  If you are a homebuyer, call me!!  Lastly, I am not an accountant nor am I bright enough to be one.  Discuss tax strategies with your accountant and financial advisors.

      In a nutshell, the government is looking to help promote home ownership (and spur the real estate market) by giving first time homebuyers a $7500 tax credit if they purchase a home between April 9, 2008 and July 1, 2009.  This is not a gift (what is when it comes to government?).  It is an interest free loan that is repayable over a maximum of a fifteen year term.  The great thing is, when you buy your first home, you get all these great tax deductions that you did not have before.  At an increased tax of $500 per year, to repay the loan, you will not feel the pain because of the tax deductions. 

       There are some caveats to all of this.  You must be a first time homebuyer.  This is defined by the buyer or the buyer’s spouse not having owned their principle residence over the past three years.  There are income limits.  Single tax payers with income up to $75,000 and married couples with incomes up to $150,000 annually qualify for the full tax credit.  Buyers will qualify for a partial credit if there income falls between $75,000 and $95,000 filing single and $150,000 and $170,000 filing married.  Also, of you sell your home and make a profit, you will owe the government the loan money back minus what you have repaid.

          To file for the tax credit all that has to be done is claim it on the tax return.  There are no additional forms to be filled out.  The juicy part of this is, it is a tax credit, not an income tax credit.  If a buyer that qualifies for the full tax credit has a tax liability of $15,000 and had already withheld $14,000, they would usually owe $1,000 to the government.  Add the tax credit and this buyer will get a check from the government for $6,500.  If they owed no tax they would get the full $7500!!!  That is a down payment!  It gets better………

          Buyers that qualify for this tax credit can elect to file for the credit on their 2008 taxes for a home purchased in 2009.  This can help a home buyer get their down payment money back that much quicker.  This is where a buyer would want to talk with an accountant of qualified advisor.  It is possible that filing for the credit in 2009 may get greater benefit.  I am not done.  How about this…..

          In order to help accumulate down payment, a prospective home buyer may elect to reduce federal income tax withholding, in order to accumulate down payment funds.  This is assuming that the tax credit will make up for the difference.  This is a great tool to help locate down payment funds.  If the buyer does not qualify for the credit however, they will have to pay the tax and may suffer penalties and late fees.  It is best to discuss with an accountant if you are going to use this strategy.

          This is a great tool.  If you already purchased, talk to a financial advisor get your money and invest it.  If you are buying a home, here is another way to recoup or fund you down payment.  If you have any questions or would like to request a copy of my recorded interview with my accountant on this matter please email me at mperillie@campbellmortgage.com or call me at 203.937.3343.

You have heard it time and time again that one of the most important aspects of selling a home is pricing! Pricing your home properly can be the difference between a relatively quick and hassle-free sale or sleepless nights of wondering why your home has remained on the market for months on end.Sellers should know that their property is going to get the most activity and highest offers in the first couple of weeks- often the first couple of days that the home is on the market. There are buyers who have seen every home that is on the market and, for one reason or another, those homes did not fit their needs. These buyers have been looking for two, three or more months, and are waiting for a new listing that meets their criteria to come on the market. Buyers are tired of searching, and are hungry to purchase a home, which is why if a home is priced correctly, they are more likely to buy it!

Many times, I have heard of a home going under contract in 24 hours or less, but the person who bought that home in 24 hours was often looking for three months or more.

The biggest challenge is that sellers often want as much as the last sale in the area. That is not always a realistic expectation in today’s market. It is important to have a full-time real estate professional do a proper comparative market analysis(CMA) to objectively show a seller what the competition is and at what price comparable homes have sold for in the last six months or less.

What is not included in a CMA are factors that affect perception, and that is the key difference between why one home will ultimately command a higher price than its twin. Perception alters reality, and this is a crucial consideration to understand the buying and selling process. This is why having an experienced, full-time real estate professional to give you solid advice and guidance is paramount to your success.

Your home is never worth more than someone is willing to pay for it. Sellers may set the price, but the market always determines the value. With the Internet age and buyer representation, buyers are smarter than ever, and they will be able to determine very quickly if your home is priced properly. If a market analysis is done correctly, you will get the maximum amount- and a timely sale.

Get it right the first time, and save a lot of money!

The FHA 203(K) rehabilitation loan is HUD’s(U.S. Department of Housing and Urban Development) primary program for the rehabilitation and repair of single family properties. Contrary to popular belief(even among some real estate agents), HUD does not directly fund these loans. These loans are funded through HUD approved lending institutions and HUD insures the mortgage loans on behalf of the lenders.

The 203k loan allows an owner-occupant borrower the ability to purchase a property in need of rehabilitation with one mortgage loan at a long-term fixed rate with a minimum of 3% down. For example, I had a young couple(first-time buyers) just close on a house in Hamden, CT yesterday and they went FHA 203(k) for the loan. They had a great experience. They actually purchased a bank-owned property for $180,000 and built $25,000 into the loan for the rehab and only put a 3% downpayment plus their closing costs. This program made a lot of sense for them especially since they couldn’t find anything on the market up to their standards. They have 6 months to complete the work and when they are done they basically have a brand new home. This program is surprisingly user-friendly and straight-forward as long as you meet HUD’s requirements to participate in this program.

If anyone has any questions regarding this program or would like to be put in touch with a HUD approved lending institution, just let me know.

Click HERE to easily get real-time snapshots of Connecticut local real estate market conditions.

How does this Market Snapshot compare to other home evaluation services?

Other services may provide a generalized, estimated market evaluation of an average home that has the same basic characteristics as your home. However, such an estimate is only one of many pieces of information you’ll need to make the most informed decisions you can when selling your home. Real-Time Market Snapshots also include graphical analysis of important market trends that will place your home evaluation into perspective. These Snapshots give you:

1. Real-time data on homes similar to yours in your area that have recently sold or are currently for sale
2. How long specific homes were on the market before they sold, as well as time-on-the-market averages for your area
3. Volume comparisons of recent sales, new listings and total listings
4. Percentages comparison of asking price to selling price for recent sales
5. Average, median and high/low prices for homes that have recently sold or are currently for sale

This additional information is crucial in helping to price, position and market your home so that you get top dollar when you sell.

The information provided here is meant to give you a general picture of what the real estate market is doing in your area. If you’d like more detailed market information and my analysis of it, or if you’d like a very precise evaluation of your home’s current market value, please contact me. Additionally, if you’d like to know how you can get the highest possible price for your home when you decide to sell, or if you have any real estate related questions at all, I’d be happy to help you.