There is really not a whole lot more that needs to be said that my other article here has not covered. Other than the dates, some changes to the income limits and the addition of the move-up buyer tax credit the 2010 credit is same. There is one advantage to those closing after November 7, 2009 that they would not have had prior — that is the Modified Adjusted Gross Income1 for qualifying person(s) being raised.
The 2010 First Time Home Buyers Tax Credit states:
- $125,000 for Individuals (Before November 7, 2009 $75,000)
- $225,000 for Married Taxpayers Filing a Joint Return (Before November 7, 2009 $150,000)
The Tax Credit Continues
The eligibility is contiguous – Unlike the previous tax credits where there was a brief period when no credit was available (December of 2008) this one just replaces, and truly extends the tax credit to home buyers. The only difference to first timers are the income limits, so there is no fear of not being eligible. Even if you were/are over the income limits a credit may be available to you, you should advise with your tax preparer, or the IRS for details.
v2.0 of the $8,000 Tax Credit has really made one thing perfectly clear to home buyers and real estate agents. Yet I am sure there will be those that say they still didn’t know when the time has expired.
You must have the home you are going to purchase under contract by April 30, 2010.
OK folks lets go over this, because I still meet agents all the time who do not know the difference. They will call and say…
Did you get my contract?
and I always respond with..
No, but I got your offer!
An enforceable Texas real estate sales contract includes:
- Competent Buyer and the Seller
- In writing – All essential terms expressed. Until signed by both sides everything is negotiable. Once it is signed nothing is negotiable unless it is broken and new consideration is needed to modify the contract.
- Description (Legal Description, Address, Tax ID)
- Meeting of the Minds – Valid offer and an acceptance of the terms by the seller (ie. Details in the contract who is paying for what, when the purchase will close.
- Consideration – Both parties required to do something previously not required to do (ie. Seller made repair, Buyer agrees to purchase for a certain price)
- Legal Purpose – The Seller Agrees convey a clear title by way of deed for the purposes the buyer is purchasing (ie As a Single Family Residence)
- Signatures from Both Parties
Notice I did not mention a REALTOR on that contract, a real estate agent is not part of a contract. That last page is a ratification article which is used during the closing of escrow. The 2010 Tax Credit stresses that a binding sales contract must be signed by April 30th, and the closing happen by June 30, 2010.
- This does not mean an offer is submitted but not yet accepted.
- This does not mean you have a contract but still waiting to do inspections.
- This does not mean you have gotten the inspection report back and want to lower the price of the house due to repairs you want done, and not required by your lender.
- This does not mean you now need the Seller to pay some of your closing cost or else you cannot close. (unbinding and amending the contract)
What the government is trying to curtail I am sure is the same thing I discussed here, if you happen to fall in love with a short sale listing it can take as little as 45 days to an unknown amount of time. It happens — this past summer I had one take over 6 months!
These are all things I have seen come up, or received calls from non-clients wanting my advice. There are plenty more I am sure — But what I am wanting to stress — everything needs to be done, all contingencies removed except for financing, and even that I would hope if you expect to close early May should have a loan commitment issued, not just a GFE2. If your a buyer that plans on taking advantage of what is almost certain to be the last First Time Home Buyer Tax Credit hopefully ever I would encourage to get out and start looking at homes and eliminate everything on the market you are certain does not fit your interest. What’s left make an offer on — if there is nothing — then at least you are ready to see fresh listings as soon as they come on the market.
A few more things to point out about the First Timers Credit that I see searched for here:
- Short-sales — You you can purchase a short sale and still receive the $8000 Tax Credit
- No you can not and should not receive a $16,000 Tax Credit – The $8000 is for Individuals and Married Couples – Stop trying to scam the government.
- Monetizing the $8,000 - Yes you can still monetize, or use the tax credit for a down payment by approved housing agencies as discussed here.
- You have to live in the home the next 3 years as a primary residence — You will need to pay back a tax credit, due to having to move before owning and living in for 3 years. If you got a tax credit and you shouldn’t have. Follow these instructions for Form 5405 for repayment and use this form from the IRS.
- How long does it take to get my tax credit — Most of my clients have gotten their returns in 6-8 weeks. I have heard of others take more than 12 — the difference may have been because I advised my clients to send in the HUD-1 Closing statement with their tax credit claim.
- No you cannot buy Great Grandmas’ house and claim a tax credit — You cannot purchase a home from other family members, your ancestors (parents, grandparents, aunts, uncles, etc.) Your descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members.
- My wife owned a house with her ex-husband 2 years ago — No you are not eligible married couples are not eligible to claim the first-time home buyer tax credit if either spouse has previously owned a home. You may, however, qualify for the repeat home buyer tax credit.
- Home purchases in 2010 may be claimed on an amended 2009 income tax return.
- Homes priced above $800,000 are not eligible for either the first-time home buyer tax credit or the repeat home buyer tax credit.
- Persons who are claimed as dependents by a taxpayer or who are under age 18 do not qualify for a tax credit.
This will wrap it up — As always if there is anything I can help you, your friends or family with real estate related please contact me. Check out my commentary on the tax credit here, and if you are looking for information regarding the Move-Up or Repeat Buyers $6500 Tax Credit you can find it here.
Related posts:
- The Move-Up or Repeat Buyer Tax Credit Also referred to as the Homeowners $6500 Tax Credit follows...
- Updated Restrictions and Income Limits for USDA Rural Development Home Financing It has been more than a few weeks since I...
- $8000 Tax Credit used as Down Payment in Texas Coming Soon This is a question I have noticed entered on searches...
- Can you help me buy or sell real estate in…? This is a question I get far to often, and...
- Buying a Bank-owned Home is “Easy” While making the rounds to other real estate agents blogs,...
Related posts brought to you by Yet Another Related Posts Plugin.
All Rights Reserved© Jay Myers (972) 510-7800 Licensed Real Estate Agent in Texas
Keller Williams Realty 2611 Cross Timbers Rd Suite #100 Flower Mound, TX 75028
Information deemed reliable but not guaranteed 