What an exciting time for real estate buyers and sellers!

We truly are living in interesting times. Here are some recent tax breaks to help stimulate the economy, give home buyers and sellers a break:

• California’s Mortgage Protection. On April 2, 2009, the California Association of Realtors announced, through the Housing Affordability Fund Mortgage Protection Program, that first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. 

• First Time Home Buyer Credit. A tax credit of up to $8,000 is available for eligible first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

• Tax Credit for NEW Home Purchase. A tax credit of 5% of the home’s purchase price or up to $10,000 is available for qualified buyers who purchase on or after March 1, 2009 and before March 1, 2010, a principal residence that is new construction and has never been occupied. This is not a loan and does not have to be repaid as long as owner lives in the house for 2 years after buying the home.

• Mortgage Forgiveness Debt Relief Act of 2007 allows tax payers to exclude as income the discharge of debt through mortgage restructuring as well as mortgage debt forgiven in connection with a foreclosure. This applies to debt forgiven in calendar years 2007 through 2012.

And don't forget....some programs offer first time buyer discounts in loan fees, escrow fees, etc.

Source:http://www.federalhousingtaxcredit.com/2009/index.html

More good news for the first time home buyer!

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Where to use your $8,000 Tax Credit with your FHA loanIf you are an eligible for an FHA loan and you are a first time buyer, you can:

• Use the $8,000 tax credit for closing costs, escrow charges, higher downpayment, or to "buy down your interest rate so that you can have a lower monthly payment

Eligibility.   Here's how you can determine if you qualify:

• You must be a first time buyer in the sense that you have not owned a primary residence during the last three years
• Your household gross income cannot exceed $95,000 if you are a single taxpayer, or $170,000 if you are a married couple filing jointly
• You are submitting an offer on a house you can afford to buy
• You are applying for a mortgage through an FHA-approved lender
• Your home purcase must close escrow between January 1, 2009 and November 30, 2009.
• And you must invest a minimum of 3.5% of purchase, from your own funds (which can be from your savings and gifts from relatives)

What you need to do: Complete your FHA application

• Complete the IR form 5405 --- this is your request to the federal government to send you a tax credit check.
• You can also file an amendment to your 2008 return to get your tax credit or file it on your 2009 taxes. You can download Form 5405 at www.IRS.gov
• Prove that you have no outstanding civil judgments, liens, unpaid taxes and other obligations that may eliminate the tax credit
• Prove that you are not subject to having your wage garnished that may affect how much of a tax credit you will receive

Frequently Asked Questions About the Home Buyer Tax Credit  For more information, check out the Frequently Asked Question from http://www.federalhousingtaxcredit.com/2009/faq.php

KEY TO EARNING ENERGY-EFFICIENCY TAX CREDITS

Homeowners now can claim up to $1,500 in expanded energy-efficiency tax credits for remodeling their principal residence to reduce energy consumption. Available until the end of 2010, the revamped Existing Home Retrofit (25C) Tax Credit helps consumers save two ways: on their costs and on their utility bill

WHAT QUALIFIES?

Go to National Association of Home Builders for the Facts on Energy Efficiency Tax Credit 

"Remodelers can help find the best methods of saving energy in your home with an assessment, like a home energy audit," explained Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. "Tightening the house to reduce air leakage by adding insulation, fixing ducts, and installing a more efficient heating and air conditioning system can help save on energy bills today while also reducing next year's tax bill." 

The expanded federal tax credit refunds 30 percent of the product replacement cost up to a total of $1,500.

In some cases, installation costs may also be used to claim the tax credit. As long as the new products meet IRS qualifications.can be used for:

• HVAC systems
• insulation
• water heaters
• windows and doors
• insulation Home energy audits can cost as little as $500, which remodelers say is an expense that pays for itself - and more - with savings from efficiency upgrades. And homeowners may be able to combine federal tax credits with local and regional incentives to maximize savings.

Here's one example: Insulation improvements may be one of the easiest and most affordable ways to save on energy costs. Upgrading inefficient insulation (from R-19 to R-38) in the attic of a two-story, 2,000-square-foot Chicago home might cost around $1,000, but the tax credit brings that down to $700. Add that to Chicago's MidAmerican Energy residential energy efficiency rebate program, which can return up to $600 spent on insulation or other energy-efficiency upgrades, and the cost drops to $100 - meaning a two-year payback period for the $51 estimated annual utility savings for this project.

Inspecting the ductwork, caulking and heating and cooling systems for possible upgrades or enhancements also help to provide additional energy savings, Miedema said.

See: Federal Tax Credits for Energy Efficiency as outlined by Energy Star. Click HERE

Homeowners also can use the tax credit for heating and cooling components.

For example, upgrading a standard 10-year-old air conditioner to today's federal minimum 13-SEER (Seasonal Energy Efficiency Ratio) model may cost about $5,500 in Phoenix, but does not qualify for the tax credit. Spending as little as $2,000 more for a higher-efficiency air-conditioner (such as 16-SEER) earns the homeowner the $1,500 energy-efficiency federal tax credit. Plus, the local power company provides a rebate starting at $425. With the tax credit and utility rebate, the cost difference can be paid back in a couple of years, while the homeowner may enjoy utility bills savings for years to come.

With the credit, tankless water heaters are comparable in cost to traditional gas water heaters, but last as long as 20 years and are 30 percent more efficient. When the credit is included, homeowners can save $100 per year on their water heating expenses, he added.

In addition to expanding the 25C tax credit, the Wind, Solar, Geothermal and Fuel Cell (25D) Tax Credit for renewable energy products now provides larger incentives for installing

• geothermal heat pumps
• solar panels
• solar water heaters
• small wind energy systems
• fuel cells.

Although the upfront costs are high for these products, the tax credit is 30 percent and there is no cap on their cost through 2016. Taxpayers can claim the credits on IRS Form 5695.

OTHER LINKS TO USEFUL SITES

• Homeowners can use an energy-savings simulation from the NAHB Research Center at http://energysim.toolbase.org/ to determine likely costs of upgrades and savings.
• Information on rebates from utility companies and other state and local government incentives is available at Database of state incentives for renewables and efficiency at http://www.dsireusa.org./
• Alliance to Save Energy at http://ase.org/content/article/detail/2654
• Home Channel News at http://www.homechannelnews.com/story.aspx?id=104655&menuid=305
• HGTVPro.com http://www.hgtvpro.com/hpro/nws_ind_nws_trends/article/0,,HPRO_26519_5943221,00.html

Good luck!

Foreclosure doesn't have to be a dirty word if you're an investor or home buyer. We are encouraged to help stimulate the economy, and one way we can do this is to buy homes in distress. Neighbors would appreciate having new owners to care for homes that have been neglected by property owners who no longer have the means for upkeep.

To find out what's happening in specific areas in California, or to see what may be coming up for sale in the future, here's a glimpse, click on this link to take you to the tab on ForeclosureRadar.com.
 

Recently, my company, Gallagher & Lindsey held our awards ceremony for the fourth quarter and for the year 2008.

We prepared to applaud the same guy, Moon Tam, who wins as number one, year after year for more than 10 years. As far as we can see, he broke the mold. He doesn't even prospect anymore. All his business is purely by referrals. He's reached that stage where he can turn down requests for his service. We could only aspire to be in his shadow.

Nonetheless, I was pleased to say that I'm in that shadow since I started as a realtor in 2003, and having attained a measure of success as either number 3 or number 2 in 2005, 2006 and 2007.

In 2008, in spite of the doom and gloom as the economy seemed headed for a meltdown, I knew I did well in my fourth quarter. Heck, it constituted half of my entire year's volume. So I was delighted that I garnered first place for the 4th quarter 2008.

Then they announced the number one sales producer for 2008.

It's me!
 

ImageChef.com

With so much information on real estate, where should one go for information?

Lately, I've been very active on Active Rain. This is a very active community of realtors, lenders, escrow officers, coaches, and more. We share information, observations, opinions. We give advice. We help each other out. Truly, a community!

So here is where I blog. Click on the logo which will take you to my blog: Pacita's Quick Bytes of Real Estate.