Monthly Real Estate Update
BEST TIME TO BUY.....EVER!
Please understand: This isn't an article about how interest rates will never be lower; they already have been. It isn't even an article about how low home prices are; though they are. And it crtainly isn't an article about how you'd better buy now before prices start rising; it may be quite a while before prices rise in a significant way.
Nonetheless, it is an article about the best buing opportunities we're likely to ever see. Let's enumerate and start with the benefits available for a first-time buyer (that is, a buyer who hasn't owned his and/or her home during the three years prior to today's purchase). First, you qualify for a tax credit of up to $8,000 (or 10% of the purchase price, whichever is less). This doesn't have to be paid back, so long as you continue to own and live in our home for at least three years. It does, however, require you to close the purchase transaction by December 1, 2009, so it is time now to act on this. (There are a few other restrictions, and therefore, we strongly urge you to work with a trusted real estate professional, mortgage professional and tax advisor).
A new, related opportunity: if you wish to use some or all of that $8,000 for your down payment and/or closing costs, you may. This will dramatically reduce the out-of pocket expenses in the purchase of your home. (Further, you may want to look closely at the many recent revisions to the way the FHA loan programs work. They now allow you to buy with a cosignor on the loan, for example).
A further possibility: You can, with the assistance of your real estate professional, find a newly-constructed home and negotiate its purchase. The state of California offers a big $10,000 tax credit to buyers of newly-built homes-and you don't have to be a first-time buyer to take advantage of this plum. Remember that a tax credit is like extra money in the bank. It is an effective $10,000 reduction of the cost of your new home, not just a $10,000 reduction of the amount of your income that gets taxed. It is, in other words, a hugh benefit. And first-time buyers can combine it with their $8,000 benefit, effectively reducing the cost of their home by $18,000.
This tax credit has a time restiction as well. You must complete the purchase transaction for the newly-built home by March 1, 2010. You also must live in the home for at least two years. Your state taxes will be reduced by $3333 a year for three years, with a refund if you don't end up owing that much during any or all of those years.
And if you'd love to take advantage of all this but are still held back by understandable concerns that you could lose your job in the future, the California Association of Realtors has developed a program whereby first-time buyers who open their escrow in the purchase of a California home by December 31, 2009, and utilize the services of a Caliornia Realtor in the purchase may qualify to receive six months' worth of payments (up to $1500 each month) to help them make mortgage payments should they lose their job.
Why are the state and federal governments being so generous with their buyer programs? Ther are two related answers: First, the real estate market has needed a kick-start after having been dragged through the mud by the credit crunch and recession. Particularly as people worry about their jobs and the future of the economy, it makes sense for the government to help us feel more confident about our purchases.
Second, the healthy of the real estate market is extremely important to the sustainability of the overall economic recovery. Purchases of homes have a deep effect on related industries-furniture, plumbing, window and floor coverings, finish caprentry, landscaping and others, not to mention the boost a healthy real estate market gives to the employment numbers for construction and related industires. A kick-start for real estate, therefore, can be a crucial kick-start for the economy.
The bottom line point here, though, is that these government programs can save you a tremendous amount of money in the purchase of your home today. This is surely the Buyer's Market of the century.
Do call very soon so we can talk about how you might make all of this work for you and your household....to build the future you truly want to love!
