an ongoing conversation place for everything real estate

CBSHOME Real Estate for the 11th year participated in the United Way of the Midlands Campaign.  The CBSHOME team leaders in all 9 office locations encouraged, taught, and  shared the spirit of United Way by highlighting the lives, and programs the campaign benefits within the metro area.  This year the donors to the CBSHOME Campaign were able to increase by 27% last years giving total .   I would like to thank the many associates and employees who participated.  Thank you for caring about those in need.

We are CBSHOME the Leaders, God Bless and a safe and Happy Thanksgiving Holiday to all.

Tagged Under : CBSHOME Cares

NAR Frequently Asked Questions

Homebuyer Tax Credit Changes

National Association of REALTORS® Government Affairs Division

500 New Jersey Avenue, NW, Washington DC, 20001

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

Tagged Under : Buying Houses, Omaha Market Update, tax credit

After a couple of week delay the Senate voted 98 – 0 on the Unemployment Insurance Bill that contained the provision to extend and expand the Homebuyer Tax Credit.  The next step is for the legislation to go to the House for a vote and then on to the President for his signature at the end of this week or beginning of next week. 

As a recap of the provisions as they now stand in the legislation.  The tax credit for first time buyers was set to expire on November 30 of this year and will now be extended until April 30 of 2010.  First time home buyers who are currently in the process of making a purchase would not need to worry about qualifying for the credit if they close after November 30 of this year. 

Move up buyers as well as first time buyers are included in this bill with $8000 still being the threshold for first time buyers and $6500 for move up buyers whose income combined does not exceed $225,000.  Move up buyers will be required to have lived as primary residence in their home for five of the last eight years.  Current home does not need to be sold to qualify but credit can not be used for purchase of a vacation or investment property. 

WIth interest rates still at a record low level and prices very reasonable I would suggest consulting with your CBSHOME Realtor and start looking. 

As this proceeds through the House of Representatives I will keep you informed.

Tagged Under : 8000 tax credit, Buying Houses, Omaha Market Update

Everything is looking more promising that the extension and new provisions as noted below will be passed by the Senate and the House possibly by weeks end.  The President has stated that in its current form he will sign the legislation.  I assume the concession on the combined income from $300,000  then to $250,000, to now $225,000 was a concession made to insure this and that the combined income will be far enough away from that wealthy income definition of $250,000 as indicated in previous discussion by the administration. 

Please see the highlights of the amendment below as published in update from National Association of Realtors

Extending the Credit — Almost There

The extension and expansion of the home buyer tax credit is the pending business in the Senate. After a long week of negotiation on the credit, an agreement on the scope of both expansion and extension has been reached. The extension is part of a larger bill that has not yet gone to a vote, however. A Senate vote on the underlying bill will occur in the Senate during the week of November 1. The package will then go back to the House. The House is expected to accept the Senate amendments, vote on the package and send it to the President for signature. The underlying bill is an extension of unemployment benefits. Other provisions in the bill include expansion of the net operating loss carry-back rules, new requirements for some tax return preparers and noncontroversial provisions that “pay for” these changes.

The agreement on the extension and expansion of the credit is as follows:

• Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
• Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
• New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
• Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.

• New anti-fraud limitations are imposed.

Tagged Under : 8000 tax credit, Buying Houses, financing a home, first time home buyers

I have the pleasure of serving the Realtors of Nebraska as a Director at  the National Association of Realtors.  There has been a flurry of activity the last 48 hours pertaining to the potential extension of the First Time Home Buyers Tax Credit as well as an adjustment to whom the updated legislation would apply.  The current truth as last update from Washington and stated below is where this legislation stands as of 12:00 p.m. on October 29th 2009.  It could change at any time and I will do my best to keep everyone informed as I receive updates.

Washington Update NAR:                                                                                                                      

Senate leaders of both parties, key Senate Finance Committee members and staff, and the homebuyer tax credit sponsors Sen. Chris Dodd (D-CT), Sen. Joe Lieberman (I-CT, and Sen. Johnny Isakson (R-GA), have reached an agreement on extending and expanding the housing tax credit.  However, right now, there is no agreement on how to attach this tax credit to the pending Unemployment Insurance bill, or whether to offer the tax credit agreement as an amendment to another bill, or whether to bring the agreement to the Senate floor and vote upon it as a separate, stand alone bill.

After Senate action – if passed – the legislation must still go to the House of Representatives for consideration.  There are still a number of steps to take before anything is final.  We will continue to keep you updated as we receive additional information.

A good read and we will keep pushing for passage.  If you are so inclined please contact your representative and express your support.

Thank you.

Tagged Under : 8000 tax credit, Buying Houses, first-time buyers

Why buy or list a home in 2009 compared to 2010?

As you can read from other blogs the importance of the first time homebuyer tax credit expiring Dec 1^st of 2009.  Many people do not realize what is going to happen to mortgage interest rates after December.  The Federal Reserve announced on November 25^th, 2008 and again on March 18^th they were going to buy Mortgage Backed Securities – these securities are backed by Fannie Mae, Freddie Mac and Ginnie Mae and allow mortgage companies like CBSHOME Mortgage and others to issue conventional, FHA and VA loans to borrowers.

The Federal Reserve has committed to buy $1.25 Trillion dollars by the end of the year.  With this weekly purchase of 20 to 30 Billion dollar’s a week has really helped subsidize mortgage interest rates.  What will happen to interest rates once a demand of $1.25 trillion dollars is out of the market?  Some economist’s have estimated that the Federal Reserve purchase of MBS has kept interest rate 1% below normal market.

With the opportunities of the tax credit, it is a great time to list your home if it is in the first time homebuyer’s price range and take advantage of these low interest rates to upgrade to another home.  We may never see interest rates these low again.

If you have not owned a home in the last 3 years- you will probably never see an incentive as strong as $8000 tax credit and these low of interest rates ever again.

Tagged Under : financing a home, Mortgage

With every real estate contract be it to sell, or to purchase, you have the option whether to or not to purchase a home warranty.  Increasingly we see this option being passed over to the not to.  When I ask our sales professionals at CBSHOME their view on why this is occurring the answer it seems always go back to cost.  One sales professional stated, “ My seller’s equity is really tight on this listing”, another stated, “The Buyer asked the seller to pay along with other costs and it was countered out of the agreement”, as you can see it is a cost issue whcih is understandable in this time.

Let me turn this around a little.  Most home warranties in the Metro Omaha area range in cost of $390.00 to $535.00 as a base price.  This may go up depending on the amount of additional HVAC units, Water Heaters within the property, plus other amenities such as hot tubs, swimming pools, excessive number of bathrooms, septic system, wells etc. Home Warranties also have associated with them a service fee ranging in price of $65.00 to $100.00 for service calls per item mostly dependent on what state you reside in the metro area. So from either a Buyer or a Seller viewpoint the expenditure for coverage is less than the cost of replacing one Water Heater within the subject property on a basic policy.  As a matter of fact the average replacement of a water heater is around $525.00 for a mid grade you install yourself scenario.  Sounds like a break even plus without worry of install burden, time, and materials.

Ok, I know there are always special reasons for not purchasing this coverage, such as I have so much disposable cash that I can cover any expenditure necessary, or the house I am buying is only 5 years of age and the inspection did not show any appliance or mechanical approaching its maximum life expectancy right?  However this coverage from the consumer point of view is about peace of mind “yours”.  So I encourage you to take a look into this when you are getting ready to market and or purchase a home or just plan on staying where you are at.  I have always been a big advocate in my twenty plus years in this business, and CBSHOME is proud to have two of the leaders in this industry providing coverage for our clients that being HMS North Central and Service One.  These providers offer the consumer excellent coverage at reasonable pricing with their warranty policies.

I guess you can tell that I am a big proponent of this coverage as the cost of goods keep increasing and the coverage cost remains fairly stagnant I believe that over time the policy will more than pay for itself.  If I am selling my house then I will know that the price I have placed for the sale is good and if something stop functioning during this stressful time I do not have to worry about additional out of pocket expenses.  The buyer of my home will also look at my home with a little more ease knowing that they too will have coverage extending a year from the closing of the transaction.  The other added benefit in today’s market is that my Realtor may advertise this additional benefit separating my home from the other sellers with whom I am competing.   The best I am saving for last.  I have no responsibility to purchase the warranty unless we close the sale, and I will then be billed as part of my closing expense.  \

So my vote is to have home warranty coverage be it when I am selling or buying.  What are your thoughts?

Henry Kammandel Jr.

Associate Broker/ Directoir of Business Development CBSHOME

Tagged Under : home warranty