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Downey Farmers Market - Check it out!

by Southern Californias Top Producing Mother & Son Te

City of Downey Farmers Market -

2nd St at New St. - 9:00am-1:00pm

The city of Downey sponsors a farmers market every Saturday morning right in downtown Downey.  Visi the market for fresh fruits and vegtables; gourmet breads and cheeses' eggs; specialty oils; and fresh flowers.  You can reach the market by sending an email to farmersmarket@downey.ca.org, visiting the cities website or calling the city hall at (562) 904-7284

Every Saturday Morning!

Another Reason for you to BUY a HOME right now - New Tax Credit!

by Southern Californias Top Producing Mother & Son Te
New $7,500 Tax Credit for First Time Buyers

The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers.  Call everyone you know who wants to buy their first home (or who hasnt owned one in three years), this is too good to miss - its a $7,500 tax CREDIT (not deduction but a credit).

If you have not owned a home in three years, you are a first time home buyer.  If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for a credit.  Call your friends who just bought a home since April 9th and tell them they may take $7,500 off their tax bill if they qualify.  It has to be your principal residence, so rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500.  So, if the home costs $100,000, you would get a credit of $7,500.  This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit.  In other words, you take $7,500 off your tax bill.  What if your tax bill is only $5,000?  The IRS will send you the additional $2,500 as a refund.  When was the last time the IRS sent you a refund because you bought something?

The loan has no interest, and will be paid back over 15 years.  You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment.  You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year.  If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house?  You pay the balance back at the closing.  So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.

What happens if you do not make enough money when you sell your house?  They forgive the rest of the debt.  In other words, get $7,500 now and pay back nothing if your house only breaks even, or loses money, at closing.  When was the last time you got a loan on a speculative venture where the person who gave you the loan forgave the rest of the loan if you did not make enough profit on the sale? 

The risk of loss in buying now is on the government.  In other parts of the country where real estate is going down in value, you can lose 10% of the value of the home (up to $7,500) and the loss is covered by the fact that you do not pay back the tax credit.  The Portland real estate that first time buyers can afford is going up in value, so we are not as worried about the risk of loss. In fact we have been involved in many homes with multiple offers due to this program.   

Similarly, if you die before repaying the debt, it is forgiven.  There are special rules for sales as a result of divorce or if the government takes your property by condemnation.

There are restrictions on the amount of income that you can make and still get the credit.  But the restriction is $75,000 per year for a single person and $150,000 for a couple filing jointly, so the vast majority of people qualify.   If you make more than that, you can still get some of the tax credit, but there are complicated rules about phasing out the credit as the income goes up.  If you make that much money, you can afford to hire someone to figure out the formula.

There are minimal restrictions on the financing.  If you use a loan that is supported by mortgage revenue bonds, you do not get the tax credit.

What is the catch?  You have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.

If you know someone who wants to buy a home, call them.  If they want to buy in the Downey area, Los Angeles, or North Orange county, have them call us and we will take exceptional care of them.  If they want to buy anywhere in the US, call us and we will find them an exceptional agent anywhere in the US. 

The government gives tax credits to huge companies, here is one for the little guy.  Don't miss it. 

See it for yourself.  http://www.federalhousingtaxcredit.com/

August Market News!

by Southern Californias Top Producing Mother & Son Te

Home values seem to have leveled off for the summer months of June and July.  The average sales price in June was $390,355 while the average sales price of July was $393,025.  Compared to last year at this time, the average sales price of homes has decreased over $108,000 in the south east region of Los Angeles and North Orange counties.  Home values have continued on a steady decline since the beginning of this year but many experts believe that this continuous decline may come to an end toward the end of this year.  Of course there's no way to predict exactly when home values will continue to rise again, but one thing is for certain, being heavily involved in our real estate market day in and day out, we are finding that banks are not giving properties away like many people may believe.  

 We've encountered many situations where banks are not willing to negotiate on price, even when the property is heading to foreclosure.  We had a transaction where the was a cash offer for $459,000 but the bank turned it down wanting $500,000.  Even though this was a sure sale being that it was a cash offer, the bank wanted no less than $500,000.  The property remained on the market with no bidders.  Banks are still doing their research through comparable sales in the area and many times are not willing to take lower than market value. 

In summary, don't wait longer if you are thinking about buying.  Every day it's becoming more difficult to buy as a result of tightening bank guidelines.  As we stated above, properties have already droped over $108,000 since a year ago.  Look at the graph below for the figures.   

If you or anyone that you know is interested in buying or selling, please give us a call so that we can educate you on the best way to buy in this market. 

 

 All figures above were derived from SOCAL MLS reports. 

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Photo of The Mother & Son Team - Maria Palacios & Chris Gon Real Estate
The Mother & Son Team - Maria Palacios & Chris Gon
Berkshire Hathaway HomeServices, California Properties
16911 Bellflower Blvd
Bellflower CA 90706
(877) 883-1003
Fax: 562-381-9113