A Recent Success Story on a Short Sale

You've Got 15 More Days To Use The First-Time Home Buyer Tax Credit

The government's First-Time Home Buyer Tax Credit program expires November 30, 2009 -- a scant 60 days from today.

Considering it can take up to 60 days to close on a home, first-time buyers have 2 weeks at most to find a home.

Buyers not under contract by October 15 have little chance of meeting the November 30 deadline and, therefore, little chance of claiming the tax credit.

This is especially true for purchases involving short sales and foreclosures.


Congress passed the First-Time Homebuyer Tax Credit program as part of the 2009 economic stimulus plan. IRS Form 5405 outlines the program criteria which include the following stipulations:

Buyer may not have owned a "main home" in the past 36 months
The home may not be purchased from a parent, spouse, or child
Adjusted gross income for the household must be below $95,000 for single tax filers and $170,000 for joint tax filers
The credit is capped at $8,000 or 10% of the purchase price, whichever is less. And don't forget -- the First-Time Home Buyer Tax Credit is a true tax credit. It's not a deduction.

This means that a tax filer who claims the full $8,000 and whose "normal" tax liability is $5,000 would receive $3,000 cash from the US Treasury when their tax return is processed by the IRS.

If you can't close by November 30, 2009, though, you can't claim the credit.

The clock is ticking. If you're planning to use the First-Time Home Buyer Tax Credit, the time to act is now.

Existing Home Supply Falls by Nearly a Year

As reported by the National Association of REALTORS®, the number of Existing Home Sales dipped last month, ending the metric's 5-month winning streak.

Newspaper headlines today are overwhelmingly negative on housing. You'd almost believe this year's housing recovery had ended.

That's hardly the case.

See, the other side of the Existing Home Sales story is that -- while the number of units sold did fall by 3 percent -- the existing supply fell by nearly an entire month.

To home buyers and home sellers, this is huge. Home prices are based on supply and demand and with supplies plummeting, it means that home prices are poised to rise.

Indeed, dwindling inventory isn't "news" to today's buyers. Multiple offer situations have been common since the start of the summer and, should supplies fall further, they may soon be the home-buying rule rather than the exception.

Since peaking in November 2008, existing home supplies are down 23%.

The Recent Foreclosure Moratorium affect on Home Purchasing and Those asking for help...

If you have been already putting offers on homes and to try to pick up that next great deal, don't expect a whole more of opportunities to come your way this summer. With the latest 90 day Moratorium of Foreclosures, there will be an even tighter lock-down on the current inventories in California. Lesser amount of homes going to foreclosure will tighten up the already decreasing inventory, making that deal harder to come by.

In simple Supply/Demand terms, the demand for homes has increased steadily over the last 4 months and the Supply of homes as sharply decreased. This bottle-necking of Foreclosures isn't going to help in a much needed Inventory increase for buyers looking to get into the market.

On the other hand, is the governors 90 day Moratorium even going to work for those that need it? Historically , those that are in Notice of Default and are getting help from their bank for a loan modification, tend to default on the loan within the next year anyways. The offerings that the banks are giving aren't what the home owners are needing. Homeowners are looking for major reduction in payment, interest rate and/or principle reduction. Yet the banks, for the most part, aren't going jumping to do major changes to the current financing. Most of these loan mods are for a temporary period and is more a band aid for people to continue in making their payments.