Uncle Sam's Christmas Gift

While everyone is bustling around buying gifts and attending parties, there are still serious buyers out there making multiple offers on well maintained homes.

If you atticipate the need to sell your home, now is a great time to market it. The number of homes for sale are typically lower at this time of year due the holidays. With fewer serious buyers trampling through your home and the Christmas decorations adding a romantic ambience, make it the perfect time to sell.

If you need to sell, it definitely won't get sold unless you have it on the market. Worried about theft? Hiring a Realtor who uses computerized Sentri lockboxes, provides the ability to track agents and their clients entering the home.

Many sellers think waiting until spring is the best time to sell. However this year, with the Tax credit extension, buyers must have an accepted offer by April 30, 2010 and close by June 30,2010 leaving only a few more months. So if you are facing a possible foreclosure and want to sell your home before that, you need to consider that banks typically take several months to approve short pay sales.

If you are moving up, you may qualify for the $6500 tax credit. The tax credit does have income limits and the home-price cannot be above $800,000. Read more about it in Homebuyer Tax Credit Extension & Expansion . However, if you can afford to move up, this is the perfect time to sell and buy a bigger or better home.

Many move-up home buyers say they are waiting for home prices to go back up to regain the equity that they have lost in the last couple of years. For those who have lost all of their equity, there is no choice. They must wait for the equity to return. However, for those who have some equity and plan to wait until they regain what they have lost, may find themselves behind the curve.

Several years from now when home prices begin to rise again, as they historically do in San Diego County, the home equity growth will all be in proportion to the price of the home. For example, if you purchase a home of $350,000 versus a home of $700,000, in 10 years from now if the home value rises 10% then you will have gained $70,000 in the $700,000 versus $35,000 in the $350,000 home. During the downturn, if you have lost about 30% of your home equity, on your $350,000 house, then you will be down about $150,000 in equity. In comparison, the $700,000 house has lost about $300,000 in equity, twice as much. So in the long run when home prices go back up as they historically do, by moving up now, then you will be up $150,000 in equity.

Don't delay take advantage of Uncle Sam's Christmas Gift.

Homebuyer Tax Credit Extension & Expansion

If you haven't heard the news already, the First Time Home Buyer Tax Credit has been extended, as well as the new bill includes a tax incentive for existing homeowners as well. Homeowners who have owned their current homes at least five years, are now eligible for tax credits of up to $6,500 when they purchase a new home. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010 and close by June 30.

The credit is available for the purchase of principal homes costing $800,000 or less, excluding vacation homes. Single individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000 would not be eligible.

Other provisions in the bill, include taxpayers will be eligible to claim the credit on purchases made in 2010 on their 2009 income tax returns. The bill also established that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

While some may feel the tax credit may be adding to the National debt, according to the National Association of Realtors, economists estimate that the current tax credit has already contributed approximately $22 billion to the general economy, and approximately 2 million people will take advantage of the tax credit this year.

Some think that they didn't need to give such large tax credits. Or was it large enough? What do you think?

If you would like more information, please contact me.

Virginia Hall
ABR®, CRS®, e-Pro®, GRI®
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE#01409760