First Time Hombuyer Credit Extended
The First-Time Home-buyer tax credit was recently extended to allow buyers to receive a tax credit when purchasing a new home in 2010. Most of the blogs I read and posts on social networking sites have details on the extension, what it allows and who it applies to. Most of the Realtors, Builders, and Mortgage professionals I speak with are up to date on the recent legislation, but its the consumers who are behind. My Aunt is a Realtor in Merritt Island and she told me that a few of her long-time buyers are wanting to push their closings so they can qualify for the tax credit. Some consumers don’t seem to understand the new guidlines and restrictions. I encourage Realtors to take a moment and send information out to your farm, share information with your community associations, and don’t forget that the average consumer doesn’t get the kind of updates you get. Here are some basics for you to share with your customers. A great resource is www.irs.gov.
- New Legislation, the Worker, Homeownership and Business Assistance Act of 2009 was signed into law on November 6, 2009 and extends and expands the first-time homebuyer credit
- A buyer must enter into a contract to buy, a principal residence on or before, April 30, 2010
- They must close on the home by June 30, 2010
- Buyers can claim the credit on either the 2009 or 2010 return
- For those buyers who have owned a home for any five-consecutive year period during the eight-year period that ended on the date their new home is purchased can claim a home-buyer credit of up to $6,500
- Higher income limits
- New benefits for members of the military and other federal employees
The IRS website specifies more general information on purchases made in 2008 and 2009. Don’t forget to encourage your buyers to seek the advice of a certified public accountant to learn more about their situation.
RESPA – Real Estate Settlement Procedures Act
Source: http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
Changes are on the way! Just when you think you have it all figured out someone comes along and knocks you off your feet! Florida Real Estate professionals have faced many obstacles over the past 24 months that have made it more difficult to get transactions to the closing table. I meet Realtors every day that are working more hours for less money. The amount of hours it requires to close a transaction in today’s market has doubled at the very least. How do they do it?
Quality Title & Escrow has tried to keep real estate professionals and lenders informed about the pending RESPA Real Estate Settlement Procedures Act that will take full effect on January 1, 2010. HUD will require that loan originators provide a new Good Faith Estimate with key loan terms and closing costs and that closing agents provide a new HUD-1 settlement statment. At first glance the changes made to the documents have certainly made it easier for consumers to understand. Many of us in the title insurance world welcome the changes as it will make explaining the documents easier. The question is what do these changes mean to the Realtors who will be working with the buyers to find a home? I have just a few quick tips that I think will help you as you develop a game plan for 2010.
1) Develop a strong relationship with a lender/broker – this is key! They will be able to help guide you and your buyer through the process.
2) Build a better relationship with your buyer – your buyers will now be encouraged to shop for services they know little about. They will need you more than ever!
3) Take control of the transaction! Realtors who take control of the transaction have a higher closing ratio than those who do not. Start at the beginning of the selling process and tell your buyers how the process will go and what role you will play. Set expectations at the start and it will save you headaches in the end.
4) Build a relationship with a title company – Your vendor relationships will be more important than ever. Your title company will be an important resource when your buyers & sellers have questions about the new regulations.
Quality Title & Escrow holds regular seminars on the new HUD & GFE changes. Feel free to contact us at info@qualitytitleinsuranc.com to learn more.
Another Short Sale Obstacle to Overcome!
Quality Title & Escrow recently hosted a Short Sale Workshop with Old Republic National Title Insurance Company. The workshop was designed to give Real Estate agents a better understanding of the lender’s perspective during the short sale process. We also discussed issues such as deficiency judgements, credit issues, and HOA. What we found was many of the agents who attended the seminar where experiencing much of the same issues on their transactions. Quality Title & Escrow has extensive experience in closing short sale transactions and so we tend to see alot of different issues that can arise on a transaction. We can all agree that HOA and Condo associations have been a pain in our side. It seems that as most lenders have implemented systems to better work with potential short sale transactions, associations have implemented systems to make it more difficult. It seems that way anyways! But, now we have another dynamic to consider. On a few transactions the buyer’s new lender has requested a report showing the percentage of homeowner’s that are in default in the subdivision of the subject property. A few associations are providing this information for no charge, but others are charging fees up to $150+ to get this information. What we have found is if the default percentage is too high then the new lender may not lend money to the buyer to purchase the home. Let’s look at the big picture….What could this mean for some local communities in central florida? If a lender chooses not to lend the funds now because of the default % what will they do when many of the homes are in foreclosure. We are still waiting to see what the lender’s will do with this information, but we have already had one lender tell the buyer to look else where.
The Truth about the 8K Tax Credit
I have many Real Estate professionals who have questions about the 8K Tax Credit for new home buyers. As simple as the program looks from the outside there are many details that Realtors and home buyers need to be aware of. There is a misconception that the 8K tax credit does not have to be repaid, but there is a circumstance where it does. If a buyer claims the tax credit and then sells the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund received from it. A few exceptions apply…divorce or if the property is distoyed by a natural disaster. To learn more about the tax credit and visit www.realtor.org.
Sourc: www.realtor.org / FAQ from Governmental Affairs