High numbers of pending home sales suggest California’s new $10,000 tax credit for first-time homebuyers will run out as soon as next month, officials said Monday.

In an effort to spur economic growth and home ownership, President Obama signed the Worker, Home Ownership, and Business Assistance Act of 2009 into law on Nov.6. And, a special provision in this new legislation will help military families take advantage of the tax credit for at least two more years. Now, military home owners won’t have to rush to close on a new home by the old deadline of Nov. 30, 2009 in order to be eligible for the $8,000 tax credit — the new deadline is April 30, 2011.

This bill’s extension for military families is one year longer than civilian home owners’ extension — April 30, 2010 — and will also help financially strapped military personnel by making mortgage payments tax deductible.

Current home owners will also benefit from the newly signed law. If they have been in their principal residence for five consecutive years home owners will have until April 30, 2010 to buy a new home and receive a $6,500 tax credit.

Charles McMillan, president of the National Association of Realtors, and a proponent of this bill, stated on the organization’s website that the original home buyers tax credit bolstered the national housing market and will continue to do so if extended.

“This important incentive is helping to stabilize the housing market, stimulate the economy, and create new jobs in communities all across our great nation,” said McMillan in a NARS press release.

“Extending and expanding the home buyer tax credit will enable more families to take advantage of low interest rates and affordable prices to invest in their future through home ownership,” McMillan added.

Additional provisions include expanded income limits for single and married home owners. Previously, single home buyers couldn’t make more than $75,000 to be eligible for the tax credit — the limit is now $125,000. And, the income limit for couples has been raised from $150,000 to $250,000. However, you’re not eligible for the tax refund if the purchase price of you new home is $800,000 or more.

Speaker Nancy Pelosi praised the legislation stating on her website that it has “already been successful” and that the new provisions will help more American home owners and will promote further economic recovery.

“We’ve seen the positive impact — the steadier foundation in our housing market. Most significantly, we’ve watched a new generation of Americans start living out their dream of home ownership and economic security,” continued Pelosi.

If you want to learn more about using your VA Loan to buy a new home and eligibility for the $8,000 tax credit, visit Military.com’s Home Buying channel.

The $100 million allocated for California’s first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.’s Economics team. California’s Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.’s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.

Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become availablee.

REALTORS® are reminded not to give their clients any tax or legal advice, such as the availability of funds under the California tax credit program. Agents should encourage their clients to seek specific advice from an accountant, attorney, or other professional as they deem appropriate.

For more information, please refer to C.A.R.’s Homebuyer Tax Credit Chart 2010.

SIGN UP FOR TAX CREDIT WEBINAR: Join us on April 27, 2010 at 1 p.m. for a C.A.R. Legal Live Webinar on the homebuyer tax credit. In this one-hour session, C.A.R.’s Senior Counsel Stella Ling will discuss the California and federal homebuyer tax credits. Topics to be addressed will include the eligibility requirements for both tax credits, how quickly California’s $200 million allocation may run out, and potential liability issues for REALTORS®. Registration is simple, but space is limited, so sign up now at www.car.org/legal/legal-live-webinars.

There are a variety of places to go read about the latest home buyer tax credit that California is implementing starting up on May 1. As more of these credits come available from federal and state government groups, Realtors are responsible for helping buyers understand and be aware of these types of credits and whether or not they’re ready to take advantage of them.

So, to help you stay in the know about Cali’s latest fiscal endeavors and how it will affect your world, here are some links to stories that will give you the lowdown.

SF Examiner – California’s improved home buyer tax credit a day late, but still great

SF Chronicle – Some home buyers get new state tax credit

International Business Times – California Extends Home Buyer Tax Credit

$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws. C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.

C.A.R. provides REALTORS® with many other legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org are as follows:

Federal Lead-Based Paint Renovation Rule: Provides new certification requirements and lead-safe work practices effective April 22, 2010 for contractors and property owners performing renovations that disturb lead-based paint in target housing.
HAFA Short Sales Fact Sheet.
Short Sale Tips for REALTORS®.
REO Tips for REALTORS®.

Schwarzenegger signs extended tax credit for homebuyers

Nearly 32,000 California homebuyers can claim state tax breaks of up to $10,000 starting May 1 under a bill signed Thursday by Gov. Arnold Schwarzenegger.

But the hopes of thousands of Californians for a shield against state taxes on forgiven mortgage debt will have to wait until at least April 5, when lawmakers return to Sacramento.

The same day Schwarzenegger approved the homebuyer tax credit bill, Assembly Bill 183, he vetoed a bill that would prevent the state from taxing mortgage debt forgiven last year for Californians who got loan modifications or sold their homes in distress sales.

Schwarzenegger vetoed the bill over an unrelated provision regarding tax refunds for the state’s largest businesses. It was a repeat of a veto last year over the same issue.

The bill vetoed Thursday would have aligned much of California’s tax code with that of the federal government. But even in vetoing it, Schwarzenegger expressed support for one of its most widely awaited provisions – the ban on taxing forgiven mortgage debt.

“I signed a law in 2008 that forgave this debt for two years and I am supportive of extending the law,” he said in his veto message. Schwarzenegger immediately called for the Legislature to send him a bill to provide the tax forgiveness before the April 15 tax-filing deadline.

“Everybody agrees we need to do something about that,” said Schwarzenegger spokesman Aaron McLear.

Schwarzenegger objected to a provision in the bill, SBX8 32 by Sen. Lois Wolk, D-Davis, that would have penalized businesses for seeking some state tax refunds. The federal government has penalties similar to those proposed in Wolk’s bill.

Two bills that also would provide tax relief on forgiven mortgage debt remain in the Legislature. Lawmakers are expected to pass one when they return.

“We will not hold people in desperate need hostage,” said Alicia Trost, spokeswoman for Senate President Pro Tem Darrell Steinberg, D-Sacramento. But she called the governor’s Thursday veto of a bill that promised relief “an unfortunate and ill-advised decision.”

Thursday’s tax credit launch got the most attention. The governor signed the bill in Fresno, a city hard hit by foreclosures.

The real estate industry immediately praised the governor’s action, saying it would move buyers off the fence.

Liz Snow, chief executive officer of the California Building Industry Association, said in a statement, the tax credit will “jump start the home building industry, which will help create jobs and reinvigorate the state’s economy.”

The legislation allocates $200 million to new buyer tax credits. Half will fund credits for buyers of new unoccupied homes. The other half funds credits for first-time buyers who buy resale homes.

California Association of Realtors President Steve Goddard said the tax credit “will incentivize first-time homebuyers to purchase homes that have been abandoned, foreclosed upon, and returned to the lender, or have been sitting on the market for extended periods of time.”

In both cases, buyers can waive whatever state taxes they owe – up to $3,333 – in each of the three years after buying. The program begins with escrows that close May 1 or after. Buyers who close escrow before then, and those who closed after a similar 2009 tax break ended last July, are ineligible.

Schwarzenegger expected to sign new $10,000 California homebuyer tax credit

Homebuyer tax credits are almost certainly returning.

Sacramento-area buyers can begin claiming $10,000 tax credits starting May 1 under a bill expected to be signed soon by Gov. Arnold Schwarzenegger.

The legislation allocates $200 million for more state tax credits – twice what was offered last year to 10,659 buyers of new, unoccupied homes. The state’s newest housing stimulus will grant $100 million in tax credits to first-time buyers of existing homes and $100 million to anyone who buys a new, unoccupied home.

The state Franchise Tax Board on Tuesday estimated nearly 32,000 homeowners statewide might get the tax breaks. Buyers must close escrow or reserve a credit on or after May 1 and before or on Dec. 31 to qualify.

The bill, AB 183, passed both houses of the Legislature by near unanimous votes. But one local lawmaker, Assemblyman Roger Niello, R-Fair Oaks, voted against it.

“I think it’s a lot of money in a deficit situation that doesn’t have the desired benefit,” Niello said Tuesday, noting that housing prices are still depressed despite earlier credits designed to stimulate the market.

Niello’s view was clearly a minority one, however.

“This tax credit has a proven track record,” said Assemblywoman Anna Caballero, D-Salinas, who authored the bill along with Sen. Roy Ashburn, R-Bakersfield. Caballero said California’s construction industry reported a 39 percent increase in building permits after the first round of tax credits began in March 2009 and proved more popular than expected. It ran out last July 2.

Schwarzenegger spokesman Mike Naple said Tuesday the governor supports the bill “and is expected to sign it.”

The governor signaled his intent Monday while signing two other budget bills. In a signing message, he commended the Legislature for approving the tax credit bill, saying it will stimulate “the housing industry, creating jobs for thousands of Californians.”

Schwarzenegger proposed the housing stimulus in his January State of the State Address to help revive the California economy. The new state tax credit would take effect one day after expiration of a federal $8,000 tax credit for first-time homebuyers.

As was the case last year, buyers won’t be eligible for the full $10,000 credit if they owe the state less than that amount over a three-year period. Buyers can get up to $3,333 off their tax obligation in each of the three years after buying a house.

Buyers must be at least 18 years old and be unrelated to the seller. They must live in the home they buy. First-time buyers are defined as those who have not owned a home in the past three years.

The Franchise Tax Board estimates the tax credit will cost the state $6 million for the fiscal year ending June 30 and $69 million next year. For three years after that, it will cost the state treasury $67 million, $54 million and $4 million.

This year’s legislation is different in that it allows buyers of new homes to reserve a tax credit in advance. A buyer signing a sales contract in June can claim the credit in November when the house is completed, a capital-area building industry official said Tuesday.

“In our parlance, that allows dirt sales,” said Dennis Rogers, a vice president at the Roseville-based North State Building Industry Association. “We’ll be able to build new houses now and get jobs going.”

Home Front: Foreclosures’ collateral damage widespread

If you’re among the thousands of Sacramento-area homeowners who played it conservative during the housing boom, who didn’t refinance or flip to a bigger house, everyone else’s foreclosures reached out and smacked you anyway.

Sales prices are lower. There’s less home equity to tap into. Local services have been shredded by falling property tax revenue.

Such repo collateral damage is why so many owners who pay their mortgages on time are so grouchy.

Rob Wassmer hasn’t been affected so much. Fourteen years ago he bought an east Sacramento house – in the Fab 40s – cheaply at the very bottom of the last housing bust. His older neighborhood has largely escaped the brunt of 52,000 foreclosures across the Sacramento region since 2007.

But Wassmer knows the financial whipping people have taken in Lincoln, Elk Grove, North Highlands and Yuba City. Being an academic, he knew there had to be a number for the carnage.

“I knew this kind of research had been done. I wanted to do a study of Sacramento,” said Wassmer, chairman of California State University, Sacramento’s department of public policy and administration.

Wassmer analyzed $9 billion in sales prices from 36,822 home sales in Sacramento, Yolo, Yuba, Sutter, Placer and El Dorado counties between January 2008 and June 2009. Almost half were homes sold by banks. The other half were sold by regular folks.

He concluded that the foreclosed homes cost this one region of America $2.7 billion in price cuts and lost equity over just 18 months.

• The repos sold for $659 million less simply because they were bank-owned and differed from normal sales. They took $1 billion more in price cuts because they were near other repos.

• Both reductions then stripped $1 billion from sale prices of nearby homes never in foreclosure danger.

Collectively, these foreclosures cost local governments $27.1 million in property taxes. Reassessments will likely take more.

Said Wassmer, “This is a call for regulation.” He suggests a federal law to make lenders and borrowers meet in “structured mediation” at least once before foreclosure.

Few ideas have proved so far to be the solution. See the research directly at: >www.csus.edu/indiv/w/wassmerr/ResForeclosure.pdf

State tax credit confusion

Tax preparation season is already disappointing some 2009 California home buyers who aren’t getting a full three-year, $10,000 tax credit for buying a new home.

A Lincoln buyer called Home Front saying his 2009 credit will be about $300 – well short of the $3,333 he’d expected to get for each of the next three years.

Spokeswoman Brenda Voet of the California Franchise Tax Board told Home Front that the size of the credit depends on the buyer’s specific tax situation. “It’s a dollar for dollar credit for taxes owed,” she said.

That means if you owe $300 in state taxes you get a credit for the $300 and don’t owe it. If you owe $4,000 in state taxes you get a credit for $3,333 and pay $667.

No one gets money from the state above what they owe, Voet said.

Existing Homes For Sale – A New Record Set

Are you a first time buyer with a tax credit? Then you will want to know the sales, existing homes recorded this year. In 2009, all first time buyers where driven by their tax credit to buy homes at affordable prices. The sale of existing homes showed a bigger gain in October with a steady increase over the previous months. But the performance of inventories for new constructions continued to minimize.

The sales of existing homes included single homes, condominiums and townhomes. These sales were recorded at 10.1% showing 6.1 million units in October as against 5.54 million units in September. This new score in October 2009 is said to be 23.5 percent above the 4.94 million units recorded in October 2008. Many buyers were seen rushing to get hold of good homes before the first time buyer’s tax credit deadline would terminate. When the tax credit expired by the end of October, robust sales was also seen in November. But the dawn of December saw a decline in the sales.

But now, the tax credit has been extended till April 30th 2010. A large demand for existing homes prevails among the first time buyers. This can be easily tapped before the tax credit period ends. The extension of tax credit limit for first time buyers has created unusual conditions like getting multiple bids on lower price ranges and quickened sale of foreclosed property. This is also a busy time for realtors to negotiate satisfactory deals. First time buyers are feeling the need for good realtors to get them the best home affordable by them. The thirst for existing homes among first time buyers has recorded a steady decline in the sale of housing inventory.
The median price for all home types in October 2009 was $173,100. This was 7.1% less than the median prices of October 2008. It is expected that the prices of existing homes for sale should stabilize by the second half of 2010. If that happens, the home sales will remain at healthy levels, normal to the economy and there will be no more price overcorrection worries among the buyers. This decrease of the home prices are going to create extremely favorable conditions for affording homes. These factors are applicable to all types of homes including single homes, condominium and all other existing homes.

The NAR chief was found saying that home loan interest rates were lowest in the month of October. But the fixed rate loans fell to 4.95 percent in October from 5.06 percent in September.
With tax credit extended to 2010 and affordable homes for sale, there is no reason to wait longer to buy your dream home. This is the right time to invest in property and make the most of the current economic conditions. To help you make wise decision, hiring an experienced realtor will get the best negotiable deals in your hand. Visit www.greatwestgmac.com to get in touch with some of the best real estate professionals in the Sacramento region.

For additional resources and information please visit the following sites.

Resource Links:

http://www.gmacrealestate.com

Bill Fields All Star Coaching Program: http://www.AllStarCoaching.net
GreatWest GMAC Search all MLS Listings: http://www.LocalHomeLink.com
GreatWest GMAC Consumer Buyer/Seller Blog: http://www.GreatWestBlog.com
T. Sami Siddiqui (Broker/ Owner) Buzz About Sacramento Blog: http://www.samisiddiquiblog.com
Brodie Stephens (Executive Vice President) One Stop Blog: http://www.brodiestephensblog.com
GreatWest Podcasts- Weekly Updates on new REO, Short Sale, Bank Owned Foreclosure Listings: http://www.HouseTalkOnline.com
GreatWest Videos: http://www.youtube.com/brodiestephens
Facebook Brodie Stephens Profile Page: http://www.facebook.com/brodiestephens
Facebook GreatWest Profile Page: http://www.facebook.com/searchmlshomesforsale
MySpace Brodie Stephens Blog: http://www.myspace.com/brodiestephens
MySpace GreatWest Blog: http://www.myspace.com/greatwest
Picasa Web Album: http://picasaweb.google.com/brodiestephens
GreatWest Real Estate Careers- GMAC is looking for Professional Realtors to Join Us: http://www.CareersWithUs.com
Global Employee Relocation: http://www.employeerelocation.blogspot.com
Apply for a Loan: http://www.choice1funding.com
ActiveRain Blog Brodie: http://activerain.com/blogs/brodiestephens
ActiveRain Blog Company:http://activerain.com/blogs/greatwestgmac
Sacbee:http://www.sacbee.com

Company WordPress Site:http://www.thehomeholders.com
Real Living:http://www.realliving.com

Existing Homes For Sale – A New Record Set

Are you a first time buyer with a tax credit? Then you will want to know the sales, existing homes recorded this year. In 2009, all first time buyers where driven by their tax credit to buy homes at affordable prices. The sale of existing homes showed a bigger gain in October with a steady increase over the previous months. But the performance of inventories for new constructions continued to minimize.

The sales of existing homes included single homes, condominiums and townhomes. These sales were recorded at 10.1% showing 6.1 million units in October as against 5.54 million units in September. This new score in October 2009 is said to be 23.5 percent above the 4.94 million units recorded in October 2008. Many buyers were seen rushing to get hold of good homes before the first time buyer’s tax credit deadline would terminate. When the tax credit expired by the end of October, robust sales was also seen in November. But the dawn of December saw a decline in the sales.

But now, the tax credit has been extended till April 30th 2010. A large demand for existing homes prevails among the first time buyers. This can be easily tapped before the tax credit period ends. The extension of tax credit limit for first time buyers has created unusual conditions like getting multiple bids on lower price ranges and quickened sale of foreclosed property. This is also a busy time for realtors to negotiate satisfactory deals. First time buyers are feeling the need for good realtors to get them the best home affordable by them. The thirst for existing homes among first time buyers has recorded a steady decline in the sale of housing inventory.
The median price for all home types in October 2009 was $173,100. This was 7.1% less than the median prices of October 2008. It is expected that the prices of existing homes for sale should stabilize by the second half of 2010. If that happens, the home sales will remain at healthy levels, normal to the economy and there will be no more price overcorrection worries among the buyers. This decrease of the home prices are going to create extremely favorable conditions for affording homes. These factors are applicable to all types of homes including single homes, condominium and all other existing homes.

The NAR chief was found saying that home loan interest rates were lowest in the month of October. But the fixed rate loans fell to 4.95 percent in October from 5.06 percent in September.
With tax credit extended to 2010 and affordable homes for sale, there is no reason to wait longer to buy your dream home. This is the right time to invest in property and make the most of the current economic conditions. To help you make wise decision, hiring an experienced realtor will get the best negotiable deals in your hand. Visit www.greatwestgmac.com to get in touch with some of the best real estate professionals in the Sacramento region.

For additional resources and information please visit the following sites.

Resource Links:

http://www.gmacrealestate.com

Bill Fields All Star Coaching Program: http://www.AllStarCoaching.net
GreatWest GMAC Search all MLS Listings: http://www.LocalHomeLink.com
GreatWest GMAC Consumer Buyer/Seller Blog: http://www.GreatWestBlog.com
T. Sami Siddiqui (Broker/ Owner) Buzz About Sacramento Blog: http://www.samisiddiquiblog.com
Brodie Stephens (Executive Vice President) One Stop Blog: http://www.brodiestephensblog.com
GreatWest Podcasts- Weekly Updates on new REO, Short Sale, Bank Owned Foreclosure Listings: http://www.HouseTalkOnline.com
GreatWest Videos: http://www.youtube.com/brodiestephens
Facebook Brodie Stephens Profile Page: http://www.facebook.com/brodiestephens
Facebook GreatWest Profile Page: http://www.facebook.com/searchmlshomesforsale
MySpace Brodie Stephens Blog: http://www.myspace.com/brodiestephens
MySpace GreatWest Blog: http://www.myspace.com/greatwest
Picasa Web Album: http://picasaweb.google.com/brodiestephens
GreatWest Real Estate Careers- GMAC is looking for Professional Realtors to Join Us: http://www.CareersWithUs.com
Global Employee Relocation: http://www.employeerelocation.blogspot.com
Apply for a Loan: http://www.choice1funding.com
ActiveRain Blog Brodie: http://activerain.com/blogs/brodiestephens
ActiveRain Blog Company:http://activerain.com/blogs/greatwestgmac
Sacbee:http://www.sacbee.com

Company WordPress Site:http://www.thehomeholders.com
Real Living:http://www.realliving.com