NAR Frequently Asked Questions On The Homebuyer Tax Credit Changes – Dec.1st 2009

National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
Here are some of the most frequently asked questions on the changes nges to the Homebuyer Tax Credit
Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who
meet all eligibility requirements will qualify for the $6500 credit.
Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a
new home. I have lived in my current home for more than 5 consecutive years and
am within the new income limits. I will go to settlement on November 20. If
President Obama has signed the bill by the time I go to settlement, will I qualify for
the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment
(when the bill is signed). There is no reference to the date of contract for the new credit. The
provision looks solely to the date of purchase, which is generally the date of settlement.
Question: I am a firsttime
homebuyer but was not within the prior income limits at the time I
entered into my contract to purchase on October 30, 2009. I will be covered,
however, by the new income limits. If the new rules have been signed into law by the
time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.
The income limit and other eligibility rules will look to your status as of the date of purchase,
which is the settlement date. So if the new rules have been signed when you go to settlement,
you should be eligible for the credit (or a portion of the credit if you’re within the phaseout
range).
Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I
have found a home with a nonnegotiable
price of $825,000. Will I be able to use any
of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount
above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an
absolute ceiling.
Question: I owned my home for 10 years, but sold it two years ago year and have been renting
since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the
other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you
will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000
and lived there until 2008 when he got a divorce. Whether John has been renting or bought in
the interim, he WOULD INDEED be eligible for the credit because he owned a home and
occupied it as his principal residence for 5 consecutive years out of the last 8 years. The
keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he
did since 3 years doesn’t impact eligibility.
Question: I am an eligible firsttime
homebuyer. I entered into a contract to purchase on
November 1, 2009. Do I have to go to closing before December 1? How does the
extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as
if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30
(or July 1, worst case), the purchaser will be eligible for the credit.

Maine Real Estate Buyers – Still On The Fence?

Did you know that timing the market is impossible?

The longer buyers wait for the real estate bottom, the more likely it is that they’ll miss it. As Jay Papasan, co-author of Your First Home, and a member of Gary Keller’s expert writing team, said in a recent article in the Boston Herald, “Many desperate sellers are slashing prices, paying buyers’ closing costs and throwing in home improvements. [But] once a few (potential buyers) get off the fence . . . you lose your leverage.”

Let’s repeat the end of that last sentence again.”…YOU LOOSE YOUR LEVERAGE”

I cannot express enough that leverage is the most important part of your negotiation. Sellers are motivated, inventory is at an all time high, Interest rates are still very low and for the first time home buyers, there is the 2009 tax credit up to $8000. It doesn’t get any better than this. Start your home search with the Maine MLS, get preapproved or read up on Maine real estate information at our blog at http://www.mainerealestateexperts.com

So, are you still saying….

  • “I don’t feel comfortable buying right now.”
  •  “Let’s hold out to get the best price.”
  • “We’re going to wait for the market to turn around.”

We can help you find the right home.  Unsure of where to begin or don’t understand the home buying process? We got that covered too. Visit http://www.HowToBuyAHomeInMaine.com, the home buyers online resource to the home buying process. Still have questions? Call us at 207-784-2525. We’ve got answers.

Meservier & Associates offers exclusive buyer agency for your protection.

Maine Real Estate – 1st Time Home Buyer Tax Credit 2009

LINDA GIFFORD ON “207”: Here’s the 5-minute video of Linda Gifford on last night’s “207” television program, explaining the $8,000 First Time Home Buyer Tax Credit – http://www.wcsh6.com/video/default.aspx?aid=47674