Update: Please read my latest post about The First Time Home Buyer Credit being extended as it contains some updates to this post.
A possible short sale homeowner will be listing her Scottsdale home for sale with me soon. She is hoping that we will be able to sell it without having to do a short sale but I am not optimistic about it (she needs more than the home is worth based on comparables and the home is located on a busy street, bringing its market value down even further). She mentioned that the $8,000 tax credit will not really benefit her because her home is out of most first-time buyers' affordability, needs, and wants.
I told her that she might not get a first-time buyer for her home, but this credit will help her because a first-time buyer will purchase the property of her move-up buyers. So it's all a domino effect. This tax credit will help both first-time buyers, first-time home sellers, and move-up buyers and sellers.
Here are the easy-to-understand criteria for the $8,000 First-time Buyer Credit
- A first-time buyer cannot have owned a home within the past 3 years. In the case of a couple, neither one could have owned a property in the past 3 years.
- The home must be your primary residence.
- The amount of the credit is up to $8,000 or 10% of the purchase price. Although most properties in the Valley area would cost $80,000 or more, with the number of foreclosures and short sales, there are certainly properties under $80,000. However, most of those properties need more work than the average first-time buyer would care to deal with, so most buyers in the area should qualify for the full $8,000 credit.
- You do not have to pay the credit back unless you move before 3 years. Remember, real estate should be considered a long-term investment.
- There is an income cut-off: individual buyers cannot earn more than $75,000 modified adjusted gross income, couples/joint purchasers cannot earn more than $150,000 modified adjusted gross income.
- This is for a property purchased from January 1st, 2009 through December 1st, 2009.
- This is a credit taken from any taxes owed. If you don't owe any taxes or are getting a refund, the $8,000 would be paid to you.
- You can wait until you file your 2009 taxes to get the credit or you can amend your 2008 taxes - speak with your tax preparer if you have questions on the best time to file for this credit.
Now is a great time to buy if you're a first-time buyer!
Imagine, I sell to first-time buyers every single year. None of my first-time buyers last year or before had this exact same chance. Never before have buyers had such an opportunity as this! I wish I was a first-time buyer right now!
Think about it:
- up to an $8,000 tax credit (most likely in our area)
- low interest rates (these might not stay low for much longer)
- low prices (again, we don't know when prices will start going up)
If you want an experienced agent to help you with your first home purchase give Judy Orr a call at 480-877-1549 or contact me. I have made lifetime clients of my first-time buyers because I help educate them and never push them to do anything they're not comfortable with.
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