RSSTax credit buoys home sales
PHOTO BY CHRISTOPHER TOMLINSON—Kelly Marlin in the front yard of her new house on Heidel Street in the cody Subdivision.Art to go with Emily’s story on the first-time home buyer $8,000 tax credit.Sent as HOUSING TAX CREDIT 11-12 2.
QUICKREAD
Tips for homebuyers
If the tax credit has you looking at buying that first home, the U.S. Department of Housing and Urban Development recommends the following:
1. Find out what price range you can afford.
2. Research borrower’s rights, choose a reputable lender and look at fair housing practices.
3. Shop around to find the best loan for you.
4. Peruse home-buying programs at the state and federal level.
5. Pick a real estate agent, let the agent know what you’re looking for, and start looking (or building).
6. Discuss a price offer for the home with an agent before turning over the number to the seller.
7. Have the home inspected by a professional.
8. Shop around for homeowners insurance.
9. Sign settlement and closing papers.Homebuyers’ tax credit
The Worker, Homeownership and Business Assistance Act of 2009 extended the tax credit for first-time homebuyers through April 30, 2010, and expanded it to include buyers who haven’t owned a home in at least three years. First-time buyers who are sent overseas as military personnel can take advantage of a similar credit through May 2011.
The credit is $8,000 or 10 percent of the home’s value, whichever is lowest. To qualify, an individual’s annual income must be $125,000 or less, and couples cannot earn more than $225,000 a year. Above those income levels, the credit amount decreases incrementally.
The new law sets a minimum age of 18 for homebuyers applying for the credit and requires buyers to show documentary proof they bought a home.
The law adds a $6,500 tax credit for people that have lived in their homes at least five years and want to move to a larger house.
For information about the tax credit, visit http://www.federalhousingtaxcredit.com.
Kelly Marlin wanted to move to a nicer place in the rental market, but the lure of an $8,000 tax credit for first-time homebuyers convinced her to get a place of her own.
Marlin, 30, bought her home in Grand Junction on Oct. 30. She said she looked at 30 to 40 homes in the span of two days before finding one she loved. She wanted to buy the house before the tax credit expired Nov. 30.
“I’m pretty sure I wouldn’t have been able to buy a house without that,” Marlin said of the credit.
She needn’t have hurried. President Barack Obama signed a bill on Nov. 6 to extend the credit another five months.
With the tax credit motivating people such as Marlin to buy a home in recent months, their purchases helped keep home sales stable from summer to fall.
Home sales in the third quarter of 2009 in Grand Junction decreased by one from the second quarter, according to Colorado Association of Realtors data. Local agents said sales would have decreased much more without the tax credit.
Home sales in the third quarter of 2008, for example, dropped by 87 from the second quarter.
David Durham, a Bray Real Estate agent who showed Marlin the home she bought, said he has been part of at least a dozen home sales where the buyer or seller wanted to take advantage of the tax credit.
“I don’t know what the market would have been like without it, but it’s definitely helped,” Durham said.
Local home sales are still down from last year, with 503 sales at a median price of $201,429 in the third quarter, compared with 784 sales and a median price of $219,615 in the third quarter of 2008, according to Colorado Association of Realtors numbers.
But the tax credit has been a “saving grace” for homebuyers and sellers in the Grand Valley, Ruth Kinnett of Dale Realty said. The credit’s extension could help keep the market up over real estate’s traditionally slow season, she said.
“It’s a good thing it’s been extended, because I think more people want to take advantage of it,” she said.
Mike McGinnis, a real estate agent with Metro Brokers Grand Junction Inc., isn’t so sure. He had more calls from people looking to take advantage of the credit in October, when the opportunity appeared to be almost gone. He wonders whether the same procrastination will lead to a dip in the market again until March or April.
“I think the urgency for some buyers has probably gone to the wayside with the extension,” he said.
People who still are interested in the credit aren’t often looking to take $500,000 homes off real estate agents’ hands, McGinnis said. It’s mostly $120,000 to $240,000 homes people are searching for if the first-time buyer tax credit brought them to the market, he said.
Marlin, who bought her home for $215,000, fits that demographic. She said she saw a variety of home sizes and prices on the market when she was looking. There’s a home for everyone, and she said she’s happy with her pick.
“I didn’t realize what the saying ‘pride of ownership’ meant until now,” she said. “It’s awesome.”
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