Q&A

Buying a home is one of the biggest investments you will make in your lifetime. Selling a home in tough times is a challenge to say the least. There are so many questions we are asked from both buyers and sellers, we have compiled this section to assist you in the home buying or selling process. Please feel free to post your questions and we will do our best to provide you with the information to help you make an informed, educated decision whether you are buying or selling a home. In addition, we have created this form to assist you in determining what is important to you in your home purchase. Take a moment to download the form and complete. Please save the form and give it to your Agent of Possibility to assist you in finding the home of your dreams! aopworksheet

Daily Interactive Question

What is the $8000 Tax Credit I keep hearing about?

Update! The tax credit was set to expire November 30, 2009. Congress has extended the tax credit into 2010 and now has also included an incentive for homeowners who have owned a home for 2 years of the last 5 years! Now in addition to a First Time Buyer having the ability to take advantage of this program, so will those of you that either currently own a home or have in the past!

Take advantage of this unique opportunity by having a home in contract no later than April 30, 2010 and closing no later than June 30, 2010. This credit will also be extended one additional year for those Veterans that are currently serving our country in the fight against terrorisim.

GREAT QUESTION!! This is a fantastic opportunity for First Time Homebuyers (anyone who has not had ownership interest in a property in the last 3 years) to receive a tax credit of up to $8000 for the purchase of an owner occupied residence. Any home with a purchase price over $80,000 will qualify for the $8000 credit. If the home is priced below $80,000, the credit is 10% of  the price: $75,000 would be eligible for $7500 and so on. The purchase of the home must occur between January 1, 2009 and no later than December 1, 2009. Credits will be claimed on the 2009  tax return and will reduce your tax liability dollar for dollar. The tax return is prepared as normal, after all exemptions are taken to figure amount of tax due. Once to total tax due has been calculated, the tax credit is applied to reduce the total tax due. So for example, if the total tax due is $6000, after the tax credit of $8000 is applied, the tax payer would receive a check from the IRS for $2000. There is no repayment of this tax credit required. However, to avoid flipping, the government has placed a 3 year recapture feature in the bill that would require repayment of the entire amount if the home is sold within the first 3 years of the purchase date.  There is no prepurchase authorization required for this program and is filed with the 1040 tax return on form 5405. This form may be found at www.irs.gov There are income limitations to the program; to receive the full credit, individuals filing single are limited to$75,000 and married filing joint is $150,000. Incomes over these limitations up to $95,000 and $170,000 respectively may receive partial credit and the law provides a formula to gradually withdraw the credit. The closer a buyer comes to the phase out amount, the smaller credit will be. Please ask your Agent of Possibility for complete information regarding this calculation. All in all, this is a fantastic motivation to find the home of your dreams!

What should I do to prepare my home for sale?

Selling your home in any market is a tough decision. You have spent many wonderful years in this home and to you, the home has proven itself priceless! But, you have made the decision and now you want to get top dollar for your home.

What is my home worth?

The most frequently asked question any seller has is home much money will I receive from the sale of my home.Your Agent of Possibility will help you determine the best price to list your home for based on comparable sales in your neighborhood. There are a few tips we can give you in helping your home show better to potential buyers.

What can I do to help my home sell for the highest price?

There is not a science to selling your home. Your Agent of Possibility will assist you in determining the areas needing attention once you have decided to place your home on the market. We will help you review the homes in your neighborhood, what they have sold for and how they compare to yours. We will provide you with a complete analysis of your neighborhood in the San Diego area to assist you in making the most informed decision when determining what the best price will be. It is important to you to sell your home quickly with the highest net in your pocket. We will explain to you the costs of selling your home as well as how to avoid the property sitting on the market for an extended period of time.

There are a few tips we CAN provide here in order for your home to appear attractive to your potential buyer.

check this out!

Can I use this $8000 Tax Credit for a Down Payment?

Announced Tuesday, May 12, 2009, Shaun Donovan, Secretary of the U.S. Department of  Housing and Urban Development stated that FHA is going to allow their lenders to use the $8000 tax credit as a down payment! This is great news! Originally, most people were only able to claim the $8000 on their tax return which deferred some people from taking advantage of the credit.  “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment” Donovan says.<

FHA approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will enable buyers to utilize the funds at the time of closing. Please talk to your FHA lender for further details.

What is earnest money? asked by Charity in Imperial Beach

An earnest money deposit is the money provided upfront from a buyer to show a seller of a home the buyer is serious about their offer. In the state of California, this money will be placed into an escrow trust account held by either the real estate broker until escrow is opened (after the offer is accepted) and then by the escrow company. The money then will be applied toward the downpayment upon the close of escrow. We are frequently asked how much of an earnest money deposit is required? There is no “requirement” for a specific dollar amount. The earnest money deposit, just as many other parts of the contract is a negotiable item. We typically see anywhere from $1000 to about 1% of the purchase price of the home. Ernest money would only be released to the seller if the buyer were to breach the contract after the offer has been accepted. If the contract were to fail to no fault of the buyer, the money would be returned in full to the buyer.

Should I get a Home Inspection? asked by Emily in Santee

To be short and sweet, ABSOLUTELY!

There is no requirement that you get a home inspection, however, we highly recommend to all of our clients to hire a professional home inspector to inspect the home of your dreams in order to avoid it becoming the home of your worst nightmare! A home inspection will vary in price according to the size of the home. The price will range anywhere between $200 and $600. For specialty properties with outbuildings, horse property or multiple units the price may be higher. A good home inspector will be able to identify potential problems with plumbing, heating and air or structural concerns. The inspector will walk the home, front to back, top to bottom, side to side.They will provide you with a detailed report on everything from the appliances to windows and doors. A home inspection is worth every penny and will assure you are purchasing a sound investment.

I am in a bad position right now with my home, I think I owe more than my home is worth. I do not want to lose it, but I am strugglig with my payment. Is there any hope?

The Obama Administration has introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis and get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels.

The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.

The consumer website provides homeowners with detailed information about these programs along with self-assessment tools and calculators to empower borrowers with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration’s program. Through this website, borrowers can also connect with free counseling resources to help with outstanding questions; locate homeowner events in their communities; find a handy checklist of key documents and materials to have ready when making that important call to their servicer as well as FAQs from borrowers in similar circumstances; and much more.

sourced from the Home Affordable Webstie http://www.makinghomeaffordable.gov/