Update: Please read my latest post about The First Time Home Buyer Credit being extended as it contains some updates to this post.
A possible short sale homeowner will be listing her Orland Park home for sale with me soon. She is hoping that we will be able to sell it without having to do a short sale but I am not optimistic about it (she needs more than the home is worth based on comparables and the home is located on a busy street, bringing it's market value down even further). She mentioned that the $8,000 tax credit will not really benefit her because her home is out of most first-time buyer's affordability, needs and wants.
I told her that she might not get a first-time buyer for her home, but this credit will help her because a first-time buyer will purchase the property of her move-up buyers. So it's all a domino effect. This tax credit will help both first-time buyers, first-time home sellers and move-up buyers and sellers.
Here are the easy-to-understand criteria for the $8,000 First-time Buyer Credit
- A first-time buyer cannot have owned a home within the past 3 years. In the case of a couple, neither one could have owned a property in the past 3 years.
- The home must be your primary residence.
- The amount of the credit is up to $8,000 or 10% of the purchase price. Although most properties in the southwest Chicago suburbs would cost $80,000 or more, with the amount of foreclosures and short sales, there are certainly properties under $80,000. However, most of those properties need more work than the average first-time buyer would care to deal with, so most buyers in the area should qualify for the full $8,000 credit.
- You do not have to pay the credit back unless you move before 3 years. Remember, real estate should be considered a long-term investment.
- There is an income cut-off: individual buyers cannot earn more than $75,000 modified adjusted gross income, couples/joint purchasers cannot earn more than $150,000 modified adjusted gross income.
- This is for a property purchased from January 1st, 2009 through December 1st, 2009.
- This is a credit taken from any taxes owed. If you don't owe any taxes or are getting a refund, the $8,000 would be paid to you.
- You can wait until you file your 2009 taxes to get the credit or you can amend your 2008 taxes - speak with your tax preparer if you have questions on the best time to file for this credit.
Now is a great time to buy if you're a first-time buyer!
Imagine, I sell to first-time buyers every single year. None of my first-time buyers last year or before had this exact same chance. Never before have buyers had such an opportunity as this! I wish I was a first-time buyer right now!
Think about it:
- up to an $8,000 tax credit (most likely in our area)
- low interest rates (these might not stay low for much longer)
- low prices (again, we don't know when prices will start going up)
If you want an experienced agent to help you with your first home purchase give Judy Orr a call at 708-536-8200 or contact me. I have made lifetime clients of my first-time buyers because I help educate them and never push them to do anything they're not comfortable with.
Don't miss your dream home - get all and new listings in your price range sent directly to your e-mail - fill out the Home Buyers Form now.