Hood River Real Estate and Columbia Gorge Real Estate

IR-2009-14, Feb. 25, 2009

WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

(This is a repost from Spring of 2008. Get your Last three years Taxes ready, along with a nice heapin helping of patience if you want to buy a home this spring. 60 days to get a loan….ouch)

Ever heard the one about the mortgage broker who blew the financing so that they wouldn’t have to honor the lock?

Or how about the one where the lender went bankrupt at closing?

….Or, how about the one where the bank approved the loan, then pulled back at the very last minute, while the parties were sitting in the closing, waiting for documents to be e-mailed in?

Yes, these, and other horror stories are making their way around the offices these days. while some of them will surely become urban legends, we have been noticing an uptick in alternative mortgage strategies. Here’s a list of a few of them. (These are actually, very very similar to pre-1998 best practices, BTW, for people who can remember Real Estate from back then.)

1. Find a co-signor. This one is a classic, and becoming back in demand. By co-signing with a family member (usually parents) a young buyer gets to get the credit score of a sibling or parent, and then makes the payment. This was a very common arrangement in years past, and we are seeing it come back.

2. Private Money. Sound Exotic? hardly. It isn’t exactly at the bargain basement prices of some mortgages, but you’d be surprised how many people are out there looking to lend money against a Real Estate Asset. Be careful when doing private money deals, because things like remedy, and evidence of payment, etc. can all hurt you alot. Best to get a lawyer to help out, but once everyone is on the same page…..well, these things tend to work out pretty well.

3. Your local bank! Yes, your local bank used to be the only lender in this area, and it is looking like a return to that time is a-comin. get to know your bank manager better. You know how you used to complain about not ever being able to speak to a human at those large mortgage companies, well, now you can speak to a human, only problem is, that human now knows alot about you, so you’d better make sure your payments are current!

Every thirty days it seems to change, doesn’t it?

The buyers are still here, but they are pooling….waiting for the all clear signal. Unfortunately, no such signal is in the offing.

This month has seen an increase in inventory, (slight) of nicer properties in the Hood River County markets. Some have come off of contract (deals from last fall that cannot find financing) Some are new. In the Mid Columbia as a whole, listings are about the same as last year.

January was brutal from a sales standpoint. Median price in Hood River was still steady, but the Buyers have trickled off. In the region, pending sales are off by a bunch, 40%. In Hood River County that number is just under 30%

In short, we need some confidence boosters.

And speaking of short, I’ll keep it short this month. Prices are soft, interest rates are low, the weather is warming up. I can’t imagine better conditions to spark some interest, but everyone seems frozen. What will it take?

See you outside! Next time I post a view, it will be warm….Thank goodness, at least we’ll all be able to exercise….