$7,500 Tax Credit for First-Time Home Buyers

On July 30, 2008 the Housing Assistance Tax Act of 2008 was signed into law offering a $7,500 Refundable Tax Credit to first-time home buyers purchasing a single family residence, condominium or townhome.  This is a great advantage to those first-time buyers who have or who are looking to purchase a home in the near future.   According to the law a “first-time home buyer” is defined as an individual who has not owned a principal place of residence for the last three years.   To be eligible for this tax credit, a home must be purchased on or after April 9, 2008 and before July 1, 2009 and used as the buyer’s principal residence. 

A first-time home buyer may qualify for the tax credit if their modified adjusted gross income (MAGI) is less than $75,000.  For married couples filing a joint return, the income level doubles to $150,000.  A buyer may also qualify for a partial credit if their MAGI is between $75,000-$95,000 or $150,000-$170,000 for joint returns.   

This incentive is not a deduction but a one-time tax credit.  It is essentially an interest-free loan, repaid over a 15 year period.  So if a buyer receives the full $7,500 credit, they would technically owe $500 per year for 15 years.    However, a buyer would not have to begin repayment until two years after the tax credit is claimed.  So if a buyer claims the credit in 2008, they would not begin repayment until 2010 taxes are filed. 

How does the tax credit work?  Let’s say a first time home buyer owed $5,000 in taxes for 2008.  The buyer would not write a check to the IRS, but would receive a check back for the remaining $2,500. If a buyer instead owes $10,000 in taxes, after taking the credit they would owe $1,500. 

For additional information and frequently asked questions check out: www.federalhousingtaxcredit.com.

Buyer Representation

Do I need a buyers agent?

Urbancondospaces.com

Buying Real Estate in the Seattle market can be challenging and overwhelming.  Urbancondospaces.com was created to assist Seattle Condo buyers in this difficult decision.  Urbancondospaces.com not only provides the most current information, but believes in good buying representation.

Buyers agents help you with the following: 

1.  No Cost Representation
One of the biggest myths’ associated with buyers agents are that the buyer could get a better price without an agent.   This is rarely ever the case.  The price you pay for a unit at the sales center will be the same if you are buying the unit with or without representation.   Most sellers/developers need and encourage the work of a buyers agents to drive traffic through the site and to eliminate the liability of representing both parties during the transaction.     

2.  Understanding
Buying in this market requires an extensive knowledge of the market conditions, locations, and site specific information. Using a buyers agent will help you to analyze and research the important facts before making a purchase.   Buying will require an understanding of the cost per square foot, the current comparables in the marketplace, the best floor plan that suits your needs, the developer and their track record, and the quality of the finish work.  Bottom line, having someone in your corner to help educate you throughout this process will help to give you confidence in your decision. 

3.  Support
The sales staff at each project has a vested interest in selling as many units as possible for their developers.   Most “site agents” have an extensive knowledge of their project, but will not provide an objective view on other projects and what may be in your best interest as a buyer.  A buyers agent on the other hand, will be paid once you find the unit that is right for you, regardless of where it is located.  Use a buyers agent to your advantage!  It will allow you to view many different projects, which will build your confidence in making the right decision.  They can handle the pressure from each sales agent and that will allow you to have think clearly throughout the whole process.

4.  Details
A buyers agent will prove to be a jack of all trades.  Throughout the process, you will need help with many details–picking your upgrades, choosing the right storage unit, parking stall, negotiating un-advertised incentives and managing the important timelines in the closing process.   In addition, not all experiences in buying a condo are perfect.  Many times with new construction, delays can occur.  If you are delayed and have to sign an extension, you can lose your rate lock, and the sales staff that continue to represent the developer, will not always look out for your best interest.   Its important to have someone to give you support.  Be attentive, engaged and invested in your purchase, but lean on the expert to handle what they do best–making sure that you get to the closing table with all the details handled effectively and with ease.     
 
If you have any questions, and or concerns, feel free to contact us.  We will be happy to go over our process of representation or answer any questions that may come up as you search for your new home.