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first-time homebuyers

4 tips to landing your dream home in a seller’s market

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Here are some suggestions to landing your dream home in our current real estate market.

Be nimble, be flexible. Try to investigate new listings quickly – within hours of their first posting, if possible. If you’re interested in a house but an inspection finds a few flaws, you may have to be flexible about accepting a house with a few quirks or in need of some repairs. Make a strong offer. A seller’s market isn’t a time to lowball your first offer on a house you want. If you’ve prepared and set your expectations below your minimum price range, you should be able to make a strong offer to ensure you are among the most attractive bidders. You shouldn’t wildly overpay, but making a strategic offer above the listing price may sweeten the deal enough to close quickly. Earnest money. You may consider offering a meaningful earnest money component to your offer to show you are serious. Just understand that this money is put at risk if you later change your mind. Few strings. Try to make your offer as simple as possible. The more contingencies, the more room for someone else to sneak in and snap up your target home. Flexible move-in dates may help the seller navigate their purchase. Having to sell your home before buying theirs may create a snag versus another offer.

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It’s time to pay back the first-time homebuyer credit

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Did you buy your current home between April and December of 2008 and claim the then-new federal tax credit for first-time homebuyers?

If so, repayment of the credit begins this year, and the first installment is due with your 2010 tax return.

You might already have received a letter from the IRS summarizing how much you received and what amount you need to repay. Generally, your installments will be spread in equal amounts over the next fifteen years.

Example: Say you received the maximum credit of $7,500. Since $7,500 divided by 15 is $500, that’s how much you’d add to your tax liability, beginning with your 2010 return.

In some cases – such as if you sell your home or convert it to a rental – you may have to pay back some or all of the credit before the end of the 15-year “recapture” period. The repayment is due in the tax year that the ownership or use of your home changes.

In other situations, including when you move due to military or certain other government service orders, your repayment could be reduced or eliminated.

Other exceptions may apply. Please call if you have questions about how the payback requirements affect you.

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Homebuyer tax credit is extended

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If you signed a contract before May 1 to buy a home, but have been unable to close the deal, you still have time to apply for the homebuyer tax credit. The deadline for finalizing the paperwork on your new home has been extended through September 30, 2010.

Here’s what you need to know:

* The extension applies only if you already had a contract in place by April 30, 2010. The new deadline is available for first-time homebuyers and long-time residents.

* The maximum credit remains unchanged ($8,000 for first-time homebuyers and $6,500 for long-time residents), as do other rules for qualifying.

* You can claim the credit on your 2009 or 2010 federal income tax return. You’ll have to complete Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and attach proof that you meet the requirements.

Not sure if you qualify? We can help. Please call for more information.

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