Another Day in the Real Estate Office

August 5, 2008

The big news today is the new Tax Law ---- Mandy, our comptroller, did a detailed study of the Tax Credit section----I will share with you the information that Mandy shared with me. It is most important that you understand what is happening with this. It is much bigger that I originally thought.

Housing Assistance Tax Act of 2008:
Highlights ---------

New Tax Credit for First Time Homebuyer

Qualifying home purchases in the U.S. after 04/08/08 and before 07/01/09 -- This act gives eligible first time homebuyers a refundable tax credit equal to the lesser of 10% of the purchase price of a principal resident up to $7,500 ($3,750 for married filing separately).

First-time homebuyer --- definition

Qualifies if he (or spouse, if married) had no present ownership interest in a principal residence during the 3 year period before the purchase of the home to which the credit applies. Unmarried persons buying a home together can qualify.


Qualifying Home Purchase:
-- any home purchase used as a principal residence (presumably to include coops and condos)
-- contracts written before April 8 qualify as long as closing takes place after April 8
-- a home under construction is treated as purchased on date buyer first occupies. This date must fall between the eligible dates
-- if purchase is made between Jan. 1, 2009 and July 1, 2009, buyer can accelerate the credit and take it in 2008.
-- cannot be acquired from related party
-- cannot be acquired as a decedent

Recapture Rule:
Credit is recaptured ratably over fifteen years, with no interest, beginning 2nd tax year after the tax year in which the home is purchased. Recaptured as additional income tax of 6.2/3% of the credit. ($500 per year on a $7500 tax credit) Again, no interest.

Please read over the above infor and be sure you understand it ---- then use it --- do mail outs, put ads out, put on flier for your listings ----- this can be really big ---- can jump start the economy.

Another big change ----

Reduced Homesale Exclusion for Nonqualified Use Periods

The 2 year primary home ownership has changed --- New law applies to people who did not use their qualifying residence as a principal residence for all of the previous 5 years of ownership. $250,000/$500,000 exclusion is prorated based on time of qualified use.

You should always recommend to the buyer to consult their tax professional to verify how the rebate affects their tax position before buying -- there may some circumstance where they may not qualify. Do Not Put Yourself Out to be A Tax Advisor.


Kim Peasley-Parker from our Sumter office writes: " Liz, With it being so close to the end of the year, I was thinking about talking to my sellers and asking if they would like to market their property as not only offering closing cost (yeah so is everyone else), but also offering to pay 2008 property taxes complete for the buyers. Since we are so close to the end of the year, it wouldn't be that much more for the sellers, but it might be something to entice a buyer. Do you think this would be a possible incentive? Also could it just be included on the HUD 1 at closing. " I responded to Kim that I thought it was a great idea and she may also want to talk with them about the seller 2nd mortgage and/or temporary 2-1 Buy Downs.

In the office today at Johnnie Dodds --Joe Eddleman, Stan Huff, Lane Baker, Amee Baker, Ed Ball, Susan Bryant (gave me tips on how to stop Nellie from biting - thanks, Susan), Michael Whitfield, Tim Rogers

IOP Office -- yesterday, I was at the IOP office and saw JoAnn Leigh and John Beall (John got a sign call while I was there --- thank goodness, at least some business going on). Today, I understand from Linda that the IOP office was buzzing ---John Beall, John Kennington, JoAnn Leigh, Melinca Mitchell, Jim Raih, Debra Duffy, Kathleen Emery and Bambi Magraw were all in there at the same time.

June came thru knee replacement fine --- actually she called the office herself --- she spoke with Kim and Kim said she was not very coherent --- understandable.

Big News: We are in process of having your listings appear on 13 or 14 different sites --- such as, Google, Yahoo, Trulia, Zillow.com, AOL Real Estate, Homescape, MyRealty.com, hotpads, com, Vast, CLR Search.com, cyberhomes, FrontDoor, oodle, Propbot in addition to CTAR, Naviga, and Realtor.com

Yeah!!! Susan Aviles, Kim Beall and Deepa Patel had closings
Yeah!!! Marilyn Durkee turned in a sale with Rob Donaldson as closing attorney ---- Fantastic!! -- great work, Marilyn.
Yeah!!! Lennie Woods has a listing sold.

Don't forget Focus Group tomorrow am on Jumbo Loans ---- and Ed Ball's birthday lunch.

Until later----------

Liz Loadholt