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Written by Jeff Zures, Sanchez & Zures
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Monday, 13 July 2009 |
The rules for the $8,000 First-time Homebuyer's Credit recently changed. Under the new guidelines, if you are a qualified purchaser (click here for basic IRS information on the credit) you can take the credit in one of three ways:
1. Amend your 2008 tax return
2. Claim the credit on your 2009 tax return
3. Monetize the credit at the time of settlement
This third option allows you to realize the economic benefit of the credit at the time of purchase instead of waiting months for a tax refund. At the time of settlement, a short-term loan is provided from an FHA-approved lender or state housing finance agency. This loan is usually interest free, however the rate cannot be higher than 2.5%. You can use the $8,000 towards closing costs, paying down your mortgage or you can simply keep the money. You will still need to claim the credit on your 2008 or 2009 tax return. Once you do this you will have the $8,000 in hand to repay the short-term loan.
There are additional considerations when monetizing the credit. Be sure to consult your tax advisor. If you have any questions, please do not hesitate to contact Jeffrey J. Zures, CPA, CFP of Sanchez & Zures, LLC at Jeff.Zures@SZadvisors.com or 703-349-0330, extension 2.
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Wednesday, 01 July 2009 |
 Happy 4th of July!! The Cook and Zook Team would like to share with you about where you can find some great places to view the fireworks this coming Saturday. Most notably is the fireworks show at the National Mall. There is nothing more patriotic than watching the red, white, and blue fireworks shoot off with the Capital and the Washington Monument in the background. Every year, the US government throws in all the bells and whistles to put on a great show. If you are planning on checking out this spectacular event, make sure you steak out your seating area EARLY. The fireworks are planning on starting at dark around 9:15ish!
While the fireworks show at The National Mall tends to be the most popular fireworks shows in the area, it is by no means the only show. There are other events throughout Virginia and Maryland. Almost every major city will have its own fireworks display as well as other events to celebrate Independence Day. Check out the links below to find the closest fireworks display in your area. Again, Happy 4th of July!
Map of All Fireworks Shows
National Mall Fireworks Display and Day Time Activites
Fireworks Displays in the Northern Virginia Area
Fireworks Displays in the Maryland Area
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Written by Patrick Powers, Cook and Zook Team
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Friday, 26 June 2009 |
Matthew Woolsey of Forbes.com scoured the nation for the most expensive homes in America. These elite homes were in a category that most can’t even fathom. Last year, the cut off to make the list was $75 million. Due to market conditions of the past year, the price has fallen to $68 million (A mere $7 million dollars!). On the top end of this list is the Fleur de Lys in Beverly Hills, California. Listed at $125 million, this 53,000+ square feet home was modeled after Louis XIV’s palace at Versailles. The five acres lot is meticulously manicured with multiple attractions throughout the grounds. Did I mention the home was over 53,000 square feet!?! With 15 bedrooms and 16 bathrooms, it would take well over an hour to preview the inside of this home. Click the link above to see other properties on the list!
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Written by Ryan Zook, Cook and Zook Team
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Friday, 19 June 2009 |
To start, here is a little background on appraisals... A lender requires an appraisal to be completed to ensure the home value is greater than or equal to the sales price. It makes sense; banks don't want to loan money at a higher amount than what the home is truly worth. An appraiser is a licensed professional who develops an unbiased opinion of the property's market value. They complete standardized checklists as they evaluate the property and neighborhood. They obtain land values from county sources, sales information for nearby comparable properties, and estimate building replacement costs using building valuation manuals and professional cost estimators. Once the appraiser is finished with their data collection, they analyze and evaluate the information in a written report outlining methods by which the fair market value was estimated. To view an example of a home appraisal report, click here.
In the last few months, the appraisal process has changed drastically. Legislation requires that appraisers be appointed by third-party entities instead of lenders, in an effort to minimize fraudulent activity. The Home Valuation Code of Conduct went into effect May 1 (click here for an outline of the Code). While the Code has good intentions, the business has shifted from experienced appraisers to appraisal management companies (AMC's), resulting in appraisers assigned work in unfamiliar locations, a disregard to time constraints of the real estate transaction, and more. Appraisal prices have gone up while quality has gone down. Experienced appraisers are leaving the business because they cannot earn a living with decreased business and commissions. As realtors®, we've noticed a huge change... New rules for appraisers cause concern among Realtors.
"Appraisals are becoming one of the biggest obstacles for Americans trying to sell their homes, refinance their mortgages or tap into home-equity credit lines..." quoted in the Wall Street Journal article, Appraisals Roil Real Estate Deals. Agents on our team have run into appraisal issues on conventional, FHA, and VA loans and in some cases, we've had a second appraisal ordered and the results have yielded a $60,000 difference in a $300,000 price range. That's a 20% difference. We've had multiple contracts over list price only to run into an appraisal issue down the road. Unfortunately, lenders, realtors®, buyers, and sellers are all at the mercy of the appraiser... This article from the Seattle Times sums up appraisals in today's market, New appraisal rules may hurt homebuyers.
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Written by Ryan Zook, Cook and Zook Team
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Monday, 01 June 2009 |
Several weeks ago we wrote a blog post entitled, "$8,000 Tax Credit Just Got a Little Sweeter." After HUD announced the news, they pulled the information off of their website to discuss how to "pay" for the credit at closing... Well, they figured it out and announced the news (again) on Friday. Here is the article from the National Association of Realtors®... Consumers across the country can now take advantage of a Federal Housing Administration program to allow qualified home buyers to apply the $8,000 tax credit when purchasing a home. FHA will now permit its lenders to provide a short-term bridge loan that will let qualified home buyers use the tax credit to either make a larger downpayment above the FHA required 3.5 percent, cover closing costs, or buy down their interest rate.
“A true housing recovery depends on buyers returning to the market and reducing inventory,” said National Association of Realtors® President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Since many of the homes available are lower priced starter homes, the ability for individuals to use the tax credit at closing should have a meaningful impact on home sales and values and will allow thousands of families to achieve the dream of homeownership.”
Shaun Donovan, secretary of the Department of Housing and Urban Development, announced the change today. In an address to several thousand Realtors® gathered two weeks ago at NAR’s Real Estate Summit: Advancing the U.S. Economy, Donovan announced HUD’s plan to offer the tax credit as downpayment assistance. Donovan detailed the modifications to that original proposal and announcement.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans allowing eligible home buyers to access the funds immediately at the closing table.
NAR has supported monetization of the tax credit, which was part of an Obama administration housing stimulus plan enacted earlier in the year. NAR petitioned HUD to allow home buyers to use the $8,000 tax credit to help them cover downpayment or closing costs to bring new home buyers to the market and stimulate home sales.
“We think this is a good program; our members have been getting many inquiries from potential buyers about it,” McMillan said. “NAR is pleased that this enhancement has been made to the administration’s housing recovery program. As we have heard before, there can be no economic recovery without a housing recovery. With an abundance of inventory, reduced home prices, historically low interest rates and now the availability of the tax credit at closing, we expect to see the housing market further stabilize and improve.” |
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