Home Is Where the Tax Credit Is | The Big Money

Home Is Where the Tax Credit Is The Big Money

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This opinion piece was titled, "Just let the homebuyer tax credit die", when I saw it this morning on the MSNBC homepage.

Recently, there has been an increase in media coverage of the Federal Housing Tax Credit, which is to be expected, given the proposed end of this program on November 30, 2009.

The incentive to first-time homebuyers is not exactly a bad idea, but, other than the issues mentioned in this piece, there are other caveats to be aware of. For instance, in a recent article written for real estate professionals, one real estate broker commented that he is telling buyers this is a tax REFUND. Come April 15, he is probably going to get numerous angry phone calls from buyers when they find out they're not getting a huge refund!
It's a simple case of understanding how the IRS defines "credit" and "refund", which I strongly suspect are the same in ANY dictionary.

For the REAL info, all first-time homebuyers are urged to visit this site for accurate information on the Housing Tax Credit:

www.FederalHousingTaxCredit.com

Along with qualifying criteria for this tax credit, such as income limits and length of ownership requirements, pay close attention to the deadline of November 30.

IMPORTANT: If you are a first-time homebuyer looking to buy distressed real estate and get the benefits of the tax credit, STOP looking at SHORT SALES. You will not close by November 30. Look instead at properties that are truly available for timely close: bank-owned (aka foreclosures) and regular sales are where you should focus your time at this point.

Great deals are out there and they aren't confined to SHORT SALES or even FORECLOSURES. There are numerous motivated sellers in this buyers market.

Check out my weekly list of bank-owned properties in this local area- updated each week!

www.MyPinellasParadise.com

Foreclosures and Short Sales- Learn the Lingo!

Many prospective real estate buyers are looking for a “deal”. Most of them are speaking of distressed properties; homes that have been through the legal foreclosure process, are bank owned, and/or known as “short sales”.

To become a savvy buyer in this complex market, it’s crucial to distinguish between these terms, and they are quite different. Many buyers interchange the terms “short sale” with “quick sale”, and this couldn’t be farther from the truth.

The majority of short sales are technically “pre-foreclosures”, where the owner usually has a hardship, the mortgage payments are in default, and the lender has started the foreclosure process, sometimes filing a Lis Pendens (public notice of intention to begin formal foreclosure). Many lenders will not pursue a quick foreclosure if there’s a chance the real estate can be sold first, as foreclosure is the most expensive option for a lender.

The length of time a lender may allow a property to be sold as a short sale will vary from a few months to more than a year. The next step for an unsold short sale is foreclosure.

Foreclosure means title has been transferred to the bank holding the defaulted mortgage, through the proper legal channels, and is now owned by the bank as a non-performing asset.
These properties are usually vacant, or, in some cases, the bank allows a tenant to remain in the home until it can be sold.

So, what if you want to buy distressed real estate? Where do you start?

Stay tuned for my next blog. You can also visit my website: www.MyPinellasParadise.com