February 20, 2009

Proposed Stimulus Bill–Home Buyer Tax Credit

 It’s important to remember that the proposed credit is far from becoming a done deal. The bill still has many hurdles that need to be address, as well as, the unknown which keeps popping up everywhere in our economy these days.  If it passes we could see some encouragement for the current buyers with a possibility that if you buy in 2009 you can take the credit on your 2008 taxes.  Your lender may have more news as soon as March 4th on this.

Here are some more Frequently Asked Questions but understand if and when the bill gets passed these answers may change.

If I bought a home and used the $7,500 home buyer tax credit, can I retroactively receive $15,000 credit if it becomes law?
No.

Are there any income restrictions on the tax credit? Currently there are no restrictions in place for the future bill.   

When will the new tax credit go into effect? When the bill is signed.

Can I take the tax credit this year? Yes. The proposal would allow buyers (even those who purchase in 2009) to claim the credit on their 2008 taxes.

The proposed tax credit is nonrefundable. What does that mean? You can only receive the credit to the extent that you owe federal income taxes. The Senate proposal would give home buyers two years to claim the credit.

Are there any repayment requirements on the tax credit? No.

If I am eligible for the current $7,500 credit, am I also eligible for the $15,000 credit? While the $15,000 credit has fewer restrictions than the existing credit, there is one big difference: because the credit is nonrefundable, if you have a low federal income tax liability, you could end up receiving more money with the current credit than the larger, proposed credit.

Can I use the tax credit to buy a second home? No.

How long do I have to live in my home after I purchase it with the tax credit? Credit has to be “paid back” if you sell the home within two years.

Remember all of this is PROPOSED.  So check with your tax attorney prior to making any decisions.

Mary on Maui

Century 21 All Islands-Wailea

Your Maui Realtor

February 11, 2009

Short Sales, Bank Owned (REO’s) and New developer offerings….

If you are wondering how to sell your home on Maui right now here is what is selling.  Short sales, Bank Owned Properties and New Developer Homes are taking over the market sales.  They each attribute about 1/3rd of the actual sales right now.  What does this say to the Sellers who are serious about selling right now??? It says that if you are serious about selling your home or condo on this island PRICING is EVERYTHING.  Take a look around.  The media is warning buyers to be fearful of the current market conditions and the reality is “the only thing we have to fear is fear itself!”

 If you have a Seller who is not serious (Seller’s take a long hard look at the supporting comps and make the right decisions) about pricing then take the property off the market.  This will in-turn lower the inventory and stimulate the market for those Buyers and Sellers who are ready and willing to buy and sell. 

Maui is selling along all three fronts. 

 Short Sales:  What has changed though, in spite of Act 137, short sales are closing and are beginning to be quite significant in our current marketplace.  If you need market information about helping you price and market your home contact a Realtor for help.

REO’s (Bank Owned): The banks are not in business to own houses they are in business to lend money.  They don’t want this inventory sitting on the market.  Make offers, be patient and see what great deals you can get now!

New Housing Developments: These guys are not wanting to sit with inventory and accounts payable.  They are offering great incentives, loan packaging and often times a larger commission for the Buyers agent.  Buyers out there….you can use any Realtor you want to represent you for free. The Sellers and or Developers pay for their services. 

Buyers if you are waiting for the bottom…..you may only see its been the bottom once the indicators show the pricing going up again.  Interest rates are still low but I am guessing we may not see them stimulate the market again with 4.5% or less for a while.  This bogged down the financial system with too many refinances and now the banks are unable to respond within the time frame that consumers are used to, the que for refinancing is weeks in waiting to hear for approval and the lenders are requesting at least 45 days to close a tradtional home purchase.

Get off the fence. Get prequalified. Go shopping.  Make offers.  And Sellers if you are not willing to move on your pricing then take your home off the market and let some of the inventory absorb prior to relisting your home.  This will help Maui, its residents and the investors who are trying to accomplish buying!