Real Estate Investing

Archive for the ‘Federal Government’ Category

Congress Extends, Expands Tax Credit

tax-credit-pic1.jpgOne of my Realtor friends was a little disappointed when he heard Congress was about to extend and expand the $8000 first-time home buyer tax credit because his buyer said, “Well now I can just take my time.”  Ouch for the agent, but for the buyer - I don’t blame him.  He can take some time now - about seven months more to be precise.

According to CNN, the measure that has passed both the Senate and House extends the $8000 tax credit for first-time buyers - or those who haven’t owned a home in the past three years.  In addition, the measure was expanded so that current homeowners can take advantage of a $6500 tax credit if they’ve lived in a home for at least five years.

That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The credit would be available only for the purchase of principal residences priced at $800,000 or less.

Given that enticing morsel, NOW is the time for owners who are on the fence to sell.  You may take a loss - or at least not make as much as you would have three years ago - but the $6500 tax credit should take some of that sting away.

As a Realtor, I obviously see many “pros” on this bill.  While I haven’t personally seen the surge in first-time homebuyers for the measure that would’ve ended on November 30th (most of my clients have been sellers), I can see where the expansion will be a huge help.

On the “con” side - takes away from the government coffers in a time when the nation is already facing a lot of debt.  Also, what about buyers who just missed the deadline and bought in 2008?  They still have to pay back the $5000 tax credit they received.  What about buyers who sold their home a year ago?  It takes away their eligibility because they haven’t owned for five straight years.

All in all, though, I’m a supporter of the measure.  I just hope it will have the positive effect on the economy that it’s anticipated having.

Photo from Mortgage Rates & Trends: Mortgage Blog from Total Mortgage.

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Senate Approves, Alters Tax Credit Extension

bad-economy.jpgThe U.S. Senate has approved an extension on the home buyer tax credit - and altered it so more than first-time buyers will be eligible.  According to MSNBC,

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes…

I couldn’t find more sources to confirm this online, so realize there are a lot of unanswered questions:

  1. When is the final vote?
  2. What does the House say?
  3. Does the President have to approve the measure?
  4. Who will now be qualified?

For me the exciting part isn’t the extension itself, it’s expanding it so other people are qualified to buy.  If my home was “parade ready” for example, it could be the boost I’d need to downsize - something I’ve been talking about for some time with my family.

Meanwhile, stocks tumbled today on the news that housing sales numbers were down.  Again, reflecting my own area that wasn’t ravaged by the bad market like some areas, it’s been a very bad year. Here’s what CNN Money.com said,

Stocks tumbled Wednesday, led by the tech-fueled Nasdaq, as a weaker-than-expected new home sales report added to questions about the strength of the economic recovery.

Let’s not get too comfortable at the notion of a quick recovery for the economy, though.  I was all Polly Sunshine about two years ago, but now… not so much.  However, it doesn’t mean that  now is not a good time to buy … it’s a GREAT time for people to get great prices on homes, good mortgage interest rates, and sellers willing to help out on closing costs.

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Ending Foreclosures Could Be Possible

foreclosuresign.jpgI was torn today about what to write:  who cares if Wall Street talent leaves or imagine no foreclosures (it’s easy if you try).  So I’m giving you my $.02 worth on the whole “losing our best and brightest” on Wall Street if we don’t give ridiculous bonuses.  My take?  Don’t let the door hit you in the behind. So what if you leave? You’ll just go somewhere else who’s lost someone because of greed.  It’ll be like wife swap, except we won’t get to send you up in a metallic type balloon at the end.  No, you’ll get the parachute - a golden one.

Or you’ll join the millions of other people who are unemployed - join the throngs that you are partially responsible for causing job loss to.  Clearly had you been doing a better job, we wouldn’t have seen the economy dive anyway.  So again, don’t let the door hit you in the behind.  Let’s give someone else a chance and hope they don’t mess up like you did.

Someone who has ideas like how to end foreclosures.  I love this idea!

How about this. Let’s have a federal bill that states that any bank that took a bailout loan and hasn’t paid it back yet isn’t permitted to foreclose on anybody’s primary residence. In addition, bonuses for senior officers at lending institutions will be reduced by a factor tied to its foreclosure record for that year. High rate of foreclosures would mean low bonuses.  At the same time, institutions that refrain from foreclosing on people’s homes would be granted tax abatements on their profits indexed to the amount they are putting at risk by allowing homeowners to renegotiate their loans and remain in their residences.

I can only hope Stanley Bing - through his work at Fortune magazine - gets this idea out… complete with how it’s a two-way street.  No more walk-aways or jingle-mail by homeowners either.  I’ve done my part!  Spread the word!

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