Date of Entry:

August 26th, 2008

How to Fire your landlord, buy a house and make $7500!

Hello there!  Thanks for stopping by today.  I’ve been talking much about the new first-time home buyer’s tax credit. Before I get a phone call from an angry reader who complains that the Housing and Economic Recovery Act’s $7,500 tax credit to first-time buyers is a sham, I’d like to explain more about this excellent opportunity.

This $7500 tax credit is part of a newly passed bill. When reviewing the overall bill, part of it is very good and the other part of it is just a band aid. For a first-time home buyer, the tax credit is a good thing because it’s really not a tax credit; it’s really an interest-free loan. If you look at it from that perspective, it’s a nice incentive for first-time home buyers or people that need some assistance in purchasing a home.

Yes, the tax credit technically is a zero-interest loan that you will repay to the government over 15 years, starting two years after the credit is claimed, at $500 a year.

If you sell the house, you repay the entire amount if there was enough profit to do so. If not, the amount that you don’t repay is forgiven.

So, why isn’t it a gift? You already got a gift this year with the economic-stimulus payment. You think the federal government has a lot of money to spare? Look at the record deficit and tell me Uncle Sam has deep pockets! Think of it this way, if the money didn’t have to be repaid or the credit were made a permanent feature of the market, the asking price of houses would be driven up $7,500 by sellers who knew the buyers would be getting it back anyway.

The law is designed to stabilize prices so that values will rise naturally.  Raleigh real estate and Cary real estate and the Triangle market as a whole will benefit greatly from this new bill and incentive.   

The $7,500 tax credit is available to first-time buyers (defined as those not having owned a primary residence for three years before the purchase) who close on the sale of a house between April 9, 2008, and July 1, 2009. The house must be the buyer’s principal residence. If you are married and file jointly, the credit is available only if neither you nor your spouse owned a primary residence in the previous three years.

The maximum” credit is $7,500.  You will qualify if you are a single taxpayer with a “modified adjusted gross income” up to $75,000, and married taxpayers with incomes up to $150,000, qualify for the full credit.

According to my accountant, before you figure what your “modified adjusted gross income is, you first must determine your adjusted gross income.

The adjusted gross income is your salary, plus interest income on savings accounts, stock dividends, tips if you’re a waiter, and rental income on that Shore house you own, added together and appearing on the last line of the first page of Form 1040.

This is the amount before deductions. The adjusted gross income is modified, for example, by any deduction for a regular contribution to an IRA, for student-loan interest or qualified tuition and related expenses, or interest from Series EE bonds that you were able to exclude because you paid qualified higher-education expenses.

If your income exceeds the limit, you may be eligible for a partial tax credit.

The example given is this: An individual buyer has a modified adjusted gross income of $88,000, exceeding the limit by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35.

Multiply $7,500 by 0.35. The buyer is eligible for a partial credit of $2,625.

The tax credit is refundable. That means you can take the credit if you have little or no federal income-tax liability to offset. The feds will likely send you a check for part or all of the credit.

If you buy a house in 2009, the IRS will let you claim the credit on your 2008 tax return. Thus you have the option of figuring out in which tax year the credit will do you the most good.

I hope this gives you a better understanding of this new bill.  If you or anyone you know is currently renting verse owning a home, please ask them this question: “What kind of incentive would make you STOP paying someone else’s mortgage?  This may be the perfect option and it will not last forever.  Call us today @ 781-9883 x 227.   I look forward to hearing from you. 

 Thanks for stopping by today.  Take Care and God Bless.

  Marti

0 Comments

Date of Entry:

August 12th, 2008

New Tax Credit for First Time Home Owners

Hi Bloggers!  Thanks for stopping by my site.  I wanted to talk a bit about the First Time Home Buyer Tax Credit and how I think it will help the local Raleigh and Cary real estate market. 

RE:  HR 3221 “Housing and Economic Recovery Act of 2008”

I wanted to take a few minutes to give you an update on HR 3221.  This bill was signed in to law last week by President Bush and I wanted to make you aware of one aspect that will help more homes to sell.   I am very excited about the tax credit for first time home buyers and wanted to make sure that my readers were spreading the word. This should give a huge boost to sales in the area. 

Here is what I understand of the new tax credit.  Every first time homebuyer couple that purchases a home from 4/8/08 through 7/1/09 will receive a $7500 tax CREDIT against taxes that are due or taxes that have been paid in the past to the IRS.  This credit is essentially a $7500 loan, at zero % interest, from the US Government that has to be paid back at $500/year for the next 15 years.  As w/ most new incentives issued by Congress, there are income limits for this gift.  A single person buying a first home, will get only $3750.    Borrowers qualify with annual income of $75k or less on a single filer and $150k or less for joint filers.  Once the word is out, this should help kick-start the first time home buyer market that should in turn help the sellers of those existing homes trade up to a larger home. 

This is a great opportunity!  If you have closed a home since 4/8/08, and you feel that you qualify – please contact your tax professionals.   If you have not owned a home in the past 3 years – you may quality.  Please contact us immediately and we will forward you information.  Home buyers in the Raleigh, Cary or throughout the Triangle market will now get even more ‘VALUE” in buying their first home. 

This may help the younger members of your family start their “nest egg” a with  more “feathers” than you & I did years ago.   So, “Honey, call the kids!”.

Until next time, Go buy some real estate and God Bless!  

0 Comments

Date of Entry:

August 11th, 2008

How will we know when the market has ‘bottomed out’ and when should I buy a home?

Hello – Thanks for stopping by my blog today. At the top of the most frequently asked questions I am asked is:  “How will we know when the market has ‘bottomed out’ and when should I buy a home?”

Historically, two major indicators that a market has bottomed out are: a decline in the number of listings and an increase in listing and sold prices. Obviously the key here is making your move at the right time-which would be right before these two items begin to manifest in the market.

Based on sales data provided by MLSs, it appears that we are beginning to realize a slight decline in listing volume. I say “appears” because with the factors affecting the market today-and the foreseeable future-this may be a seasonal issue or being caused by any number of things.

Tracking the listing volume over the next several months will provide additional information regarding this question. In regard to sold prices, this is more difficult. Across the , Real estate-owned property or property in some stage of the foreclosure or short sale process has been driving the price point for real estate for some time now.  This is also true in Raleigh, Cary and throughout the Triangle market.

With a significant volume of lending institution-owned property on the market selling at what historically, could be viewed as discounted prices, we do not anticipate seeing an increase in sales prices in the near future.

With sales showing increases compared to last year in most areas in July and early August and slight declines in listing volume, it would appear that the market is slowly changing from the buyer’s market we have experienced for the past year.

A large listing inventory remains, however, and challenges in the job sector-coupled with rising fuel costs and the overall economic state in the country-will undoubtedly prolong the market conditions we are currently experiencing.  Our local Triangle real estate market was one of the last if not “the very last” market to yield to slowing sales.  If we were the last ones in a slowing market – it is probably that we will be the first ones out of our current cycle.

.When buying and selling real estate, common sense should remain at the top of everyone’s list. This has been-and remains to be-the basis of business success and successful investing in real state.  Common sense leads to me review the positive trends that point to a bright future and excellent home appreciation.

 We have complied a 20 minute “Smart Buyer Home Buying Guide”.  Our power point and video presentation will show you – THE GOOD AND THE BAD about our local market.  It will undoubtedly make you a more educated home buyer. Smart buyers make better home choices.  The best part is that our guide is absolutely FREE.  E-mail me today @ Marti@MartiHampton.com to get edge on Raleigh real estate and Cary real estate.  

Stop back soon. God Bless!

0 Comments

Date of Entry:

July 17th, 2008

Fannie and Freddie - question mark?

Hello Bloggers – THANK you for stopping by today.  It seems that each time we get a moment to breathe in my industry – WHAM, another dramatic headline is there to make the residential real estate market “nervous”.  Local Raleigh real estate and Cary real estate are NOT in the “tank” as the national head lines would have us believe.  Truthfully, our team’s July numbers are better than 2007 – so for us the market has bottomed out and beginning to rise.

I do want to address Fannie Mae and Freddie Mac headlines.  The best way to accomplish this is to get the facts from someone I trust in the banking/mortgage field.  That’s exactly what I am going to do.  Below, Michael Martin gives a short explanation follow by a link that goes into depth.  Here is a word from Michael Martin of Starkey Mortgage. 

Regarding Fannie Mae and Freddie Mac:   Naturally, a lot of people are wondering what this may mean to them in regards to a purchase loan or the possibility of refinancing their home. There is very detailed information listed in the link below and if you are able to take the time to read it I am sure it will help you understand what is happening. Here is a brief overview though...

Last week it was brought to Fannie Mae and Freddie Mac's attention that they needed to change some accounting procedures to "correct" their books to accurately report the losses that they are facing. It was then reported on Wednesday that if Fannie and Freddie were to change the books to the more accurate accounting method that they would be "insolvent" which is obviously not good. The reality is and has been that the companies have enough liquidity to remain in business and that they are also able to raise capital if necessary to continue to remain in business. On Friday, the Federal Reserve announced that they would open the Discount Window to Fannie Mae and Freddie Mac if it would become necessary. The "Discount Window" is basically like a line of credit with the Federal Reserve. The reality is that this provided a safety feature to investors that will help many people feel more comfortable in continuing to invest in these companies. Fannie and Freddie may never actually need to borrow from this window but it is nice for investors to know it is there in case of emergency.

The real deal is that the government cannot allow for either of these quasi governmental companies to cease. They are far too important to our overall economy and it has been good for everyone to see that the Government has been able to step in to provide security. If you have any questions at all please feel free to email or call me with any questions. I certainly don't have all the answers but I have access to most of them. We are continuing to move through the tough times and once we have arrived at the other side of these murky waters, we'll all be glad we’ve studed the market carefully and continued to believe in the value and strengh of the American Home.

Link: http://www.MartiHampton.com/july_14.pdf

0 Comments

Date of Entry:

July 12th, 2008

You Need My Pep Talk

Hello Bloggers!  Thanks for stopping by.  It has been one long month since I have had even a “moment” of time to chat about our local Raleigh and Cary real estate market.

The facts are that we have near a 30% down turn in the number of home sales in our area as compared to this same time last year.  We would have to travel back in time to before 2004 to compare a year with a similar tract record in deed transfers. These facts coupled with favorable interest rates deliver a very attractive & compelling buyers market for the smart ones.

I often get asked “When will this market will turn?”.  You can imagine that I closely tract my teams sales numbers.  From January to June of 2007 – I have not begun to match the sales numbers we achieved in 2007.  Aha!  My first month of higher sales numbers will arrive this month in July of 2008.  Therefore, you could say our team – has got the “hang” of successfully navigating our home sellers and home buyers our current real estate market.

So why do “you need my pep talk”?   Because too many of us are allowing the negative news and “fears” that the 24/7 news culture is feeding us to dominate our thoughts and in turn our actions.   We face major challenges in our government and the upcoming election.  This is nothing unusual – we’ve done this our whole lives.

 We are just too focused on Washington right now. It’s understandable during a presidential race but not very productive.  Rather than look to Washington to inspire us – we are going to have to inspire ourselves.  Rather than look to Washington for leadership – we are going to have to lead ourselves. 

What has all this to do with real estate?  Over 70% of the  OWN a home – what a outstanding blessing of the liberty!   Many think that real estate is the backbone of our economy.   Therefore, we as Americans will have to continue to make America great in spite of who ever ends up in Washington.

Many people think we can’t do anything to affect all this, but we can.  We can learn to express ourselves to influence those around us in a positive way.  Instead of concerning ourselves with what the media says should take our mind and attention, perhaps we should get more involved more local and state government where we can truly make an impact.
 
These are just my thoughts, but I’m really more than a little “miffed” with the negative media and our preoccupation with the same.  We will be looking back at the outstanding buyers market of 2008 and wondering why we did not buy more real estate.

If you would like to visit our office to view a 15 minute presentation on current statistical facts on Raleigh real estate and Cary real estate and find the hottest real estate investments – call for an appointment. 

Until next time – take care and God Bless.  Thanks mh  

0 Comments