Home Sales Down in January

The latest report from the National Association of Realtors says that existing homes sales were down 7.2 percent in January 2010.

Hmmm.... I think I may know why.............a picture is worth a thousand words!

Being one of the snowiest winters on record certainly has an effect on the real estate market.

The good news is that they were up 11.5 percent compared to January 2009.

Come on Spring Time!

Home Buyer Tax Credit, the Countdown is on!

With a mere 60 days left to find your dream home and enter into a written contract to purchase it's "game on"!

I can't imagine that this far into the program there would be anyone that doesn't know the details, but just in case, I'll recap.

$8,000 First-time Home Buyer Tax Credit

•The $8,000 tax credit is for first-time home buyers only; someone who has not owned a principal residence during the three-year period prior to the purchase.

•The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years of the purchase.

•The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

•The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. In cases where a sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

•For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit

•To be eligible to claim this tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.

•The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

•The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

•The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. In cases where a sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

•Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Also worth mentioning, you will not have to wait to file your 2010 return to receive your credit. Home purchases in 2010 may be claimed on an amended 2009 income tax return.

For additional details please visit the following site brought to you by the National Association of Home Builders:

http://www.federalhousingtaxcredit.com/home

The Risk of a Lease Purchase

I have noticed a recent rise in the number of buyers who ask me about the possibility of a lease purchase. Usually people who are not quite ready to commit to a purchase due to bad credit or lack of funds.

The truth of the matter is that there is an unmanageable level of risk involved with entering into a lease purchase contract.

While the specifics of every lease purchase may differ, the concept remains the same; the buyer/lessee moves into the property while the seller/lessor continues to "own" the property. Rent is paid monthly and normally a designated portion of that rent is set aside toward the purchase. The contract includes a date on which the renter/lessee will complete the purchase, usually one year or the end of the lease term. This type of contract is really a hybrid of an Agreement to Purchase and a Lease Agreement. In Pennsylvania there is no approved form by the Association or Realtors for such a transaction. In my opinion, creating a Lease-Purchase agreement is really beyond the scope of what any licensed real estate agent is qualified to do and I always recommend that the client consult with an attorney.

Maybe so far this doesn't sound too bad..........but what if during your occupancy of the property the seller has stopped paying their mortgage, what if that seller is in serious default and the property is headed for foreclosure or sheriff sale? What if all of this is happening and you are completely unaware of the situation and continue to hand over a rent check month after month, a rent check that is not paying the mortgage or taxes on the home which you are living in and preparing to purchase.

In an effort to try and offer some degree of protection, the attorney who drafts the contract will include wording stating that the seller must immediately make you aware of pending legal action on the property, etc. However, is this really protection? Lets face it, if a home owner is not paying his mortgage he most likely has huge financial problems. You will probably not learn of any problems until the sheriff slaps a notice on the door! You can always hire an attorney and file suit against the home owner, but the likelihood of recouping any of your money is slim.

When it comes to a lease purchase proceed with CAUTION, especially in the current economic climate where so many home owners are headed into foreclosure everyday due to job loss and loans that they just cannot afford.

You are better off working hard to save and spending your money on cleaning up your credit!