As it pertains to the First-Time Homebuyer Tax Credit, you are deemed a First-Time buyer and qualify if you, or your spouse, have not owned a principal residence in the three years immediately prior to your purchase… even if you have previously owned a home. There are really two programs now… the Credit as created July 2008 that applies to all qualified purchases on, or after, April 9, 2008, and the Revised Credit, effective for purchases on, or after, January 1, 2009. There are many similarities between the two programs, and some critical differences. We will focus here on the Revised Credit for Buyers who bought after January 1, 2009, or will buy before December 1, 2009.
The best part of the Revision for Buyers is that now the credit need not be paid back … unless the home is sold within three years. A sale within three years on homes purchased in 2009 will require that the entire amount of the credit be recaptured on sale. Another benefit from the Revision is the maximum amount was increased to the lesser of ten percent of the cost of the home or $8,000. Values in our region are such that you can pretty much figure on receiving the maximum of $8,000 here. There are income limits - the full amount is available for individuals with adjusted gross income of no more than $75,000, $150,000 on a joint return. It phases out above those caps up to $95,000 and $170,000 where it is then not available.
Interestingly, IRS rules say your principal residence can take a wide variety of forms including “houseboats, housetrailers, cooperative apartments, condominiums,” among others. This affords new investment opportunities for the broad thinker. How can you make it work for you?
Pay attention to changes or refinements that may be enacted in the future that modify the Act and how it is applied. The legislation happened quickly and there are certainly going to be questions of applicability that arise as individual case studies are addressed. Idea – buy now, close escrow, and file your Credit request with your 2008 return before things change too drastically.
Our Advice: Don’t count on this credit for help with closing costs. This is a tax credit that will help you pay your tax obligation, not something you receive at the close of escrow. If your tax liability is less than $8,000, however, you will get a refund for the balance. You can elect to claim the credit on your 2008 tax return which makes sense considering the basic economic principal that “money sooner is worth more than money later.” Renting with a roommate you like? With the low home prices and good interest rates we have these days, you can partner up on a home with a minimal down that will give you a payment not much more than you are paying in rent … plus get $4,000 tax credit each!
Remember that you will enjoy significant tax benefits with your new home ownership, and now you also have Great Pricing … Great Interest Rates … and a Great Federal Incentive. What are you waiting for? Control your destiny and buy the home you want now. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. carsonvalleyland@hotmail.com, www.carsonvalleyland.com
There are upsides to this real estate market!While the present economic situation is causing heartache and pain for many … there are some silver linings to these dark clouds. Our youngest son, turning 22 in June, is about to close escrow on a wonderful home. He and his two friends – hence the “Three Amigos” will be moving next weekend into a very tidy three bedroom home in Carson City, Nevada. The three (Chad and Leah 50% and Chris 50%) are high school friends and college roommates. They are buying a 1,400 Sq. Ft., three bedroom home with a nice fenced yard, living room, family room, big open kitchen, and two car garage. It’s and REO but in perfect shape, clean, tidy, and the yard is all alive! They are financing with a new 3.5% down F.H.A Loan … and their total payment, including taxes and insurance, will be just about equal to what they’d have to pay in rent. Now … for the best part … under the new first time buyer tax credit … They can close this week, file their 2008 taxes, and get up to $8,000 back. This is a wonderful opportunity for young American entering the work force! It’s also a pretty good source of potential buyers for us. Win Win! That’s the way we like it!
It is common practice in this region to compare and buy homes on a square foot basis, but that can often lead to some confusion. If you are looking at a 1,500 square foot home, for example, you can find anything from two to five bedrooms. The garage can be non-existent, or have a three car capacity. And of course there is the matter of location.
A 1,500 square foot home in Monte Carlo will cost you $6,630,000! In Dayton that can be under $150,000 today. Minden – roughly $255,000. Location does matter! Some local location aspects to consider include: a. street frontage … is yours a busy street? (If you are a Buyer, remember, busy relative to our local market, not the big city you are moving from.) b. Distance to medical, schools, and shopping.
The spectacular price per square foot they get in Monte Carlo, $4,420, is even more astounding when you consider the average home is on a very small lot, the proverbial “postage stamp” lot. In our region one can easily find a home on five acres as on a quarter of an acre. When comparing per-square-foot prices in this area one must consider the size of the lot and allowable uses. Can you have horses? Can you store your RV on your lot? Conversely, can your neighbor – not all positive answers here are positive to all people.
There are many intangibles that impact the value in a very real manner such as the C.C.&R.’s of your development, if any. Are you in a Homeowner’s Association and, if so, how is the management? Are they oppressive? Is it expensive? What government structure affects you – not only County, but TRPA? Improvement District? Regional Action Committee?, etc. All hard to measure, but definitely can add cost to your ownership, or affect the manner in which you, or your neighbors, utilize your property. This can be good, or bad, depending on the property and what your intended uses are.
Our Advice: Don’t rely simply on the numbers, it is important to interpret them. Garages aren’t included in the square footage figures, but there is certainly added value if you have a two car garage versus a carport. A 2,400 sq.ft. “toy box”, shop, certainly adds value, but it isn’t reflected in the price per square foot number unless you interpret it to understand why that home is higher priced … if it is. If it isn’t … can you spell v-a-l-u-e? New paint & carpet; granite vs. formica; landscaping vs. dirt - all must be considered and compared before making a buying or selling decision. The square foot price will get you close … your agent will get you closer by working with you to gain a better overall perspective on “true” value for a specific property.
Prices are relative to your market. A 3,500 sq.ft. home in Monte Carlo will cost you $15,470,000. It won’t cost you that much here … but how much are you going to pay … and what will you get for it? Have fun … that is the challenge of buying in our wonderfully diverse regional market. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. carsonvalleyland@hotmail.com, www.carsonvalleyland.com
Interesting times these are! Yes, we are seeing fantastic prices on properties … and then they drop. The pricing frenzy reminds us of the time we were returning from a hunting trip in O’Neil Basin in Elko County. Access to the Jarbidge Wilderness from the east is via a very long dirt road … a good opportunity for an eight year old to get some driving experience. We told our oldest son, “keep up with Uncle Jerry” and he did that as we followed his uncle and grandpa along the road. After about 15 miles we noticed we were doing 40 miles an hour … with an eight year old at the wheel and a huge turn approaching.
We implored him to “SLOW DOWN”, but reaching the pedals was difficult for an eight year old. Finally we skidded to a stop behind his uncle as they, too, had decided to stop. It was then that we found out that grandpa had told uncle to, “stay ahead of Adam”. That situation is like today’s real estate market. Sellers are being told to “stay ahead”, or “keep up”, as we speed down this perilous economic course together… the windy dirt road. When we agreed to travel around 25 miles an hour we had a reasonable trip to the highway. We believe a reasonable “25 miles an hour” approach will help Sellers and Buyers find their way in this Market. Until that happens keep your cool in the chaos.
Home prices are falling as Buyers are making offers and Sellers are accepting them. It takes a willing Buyer and willing Seller to make Market Value, and not all Sellers are “willing” these days. Though they accept offers, we feel that prices are actually lower than value in many cases due to many Sellers’ varying levels of what can only be called duress. A property may be worth more, but the Sellers can’t realize a higher price right now. Given the dearth of Buyers the lack of demand is like having diamonds on a desert island … they have value, but ….
Many homes are bank-owned and we know that banks sell by the numbers, not emotion. Good buys to be made there. A few are Short Sales, usually priced artificially low to attract a Buyer. Traditional Sellers are competing if they can … if they have the equity and motivation to do so. Pricing can no longer be a “let’s try it … we can always come down” approach. Properties must be aggressively priced to get sold … today. Watch for the turn, however, as it is looming. Not right away, but the indicators are out there that it is coming.
Our Advice: It’s a great time to be a Buyer, but it’s hard to say how long this will last given the many changes that seem to be on the horizon. There is an effort in Congress to double the first time homebuyer incentive and forgive the payback. There have also been governmental efforts to lower interest rates to 4 or 4.5%. As these and other incentives or stimuli are implemented to turn real estate around look for real estate pricing to get some traction. When it does the free fall will stop and Buyers will have competition for the good buys. Act now while its great and don’t try to time the market … we all know that is like catching a falling knife.
Whether first time home buyer, moving up, or investor … look hard at your options right now … you’ll like what you see. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. carsonvalleyland@hotmail.com, www.carsonvalleyland.com
Real Estate auctions have been around a long time, but rarely have they occurred in our market … until now. We participated in two different local real estate auctions last weekend. Are they a substitute for a traditional selling process? That depends on your specific ownership status and property situation.
One of our bank-owned listings was part of a 300-plus home auction based out of Las Vegas. Advertised opening bids were low - some in Southern Nevada as low as $500 and $1,000. Our listing opened at $89,000, list price is $229,415. The low opening bids generated interest, but the proverbial “fine print”, the Terms and Conditions, revealed the “catch” - an undisclosed reserve. A reserve means that the Seller has a minimum price they will accept. After substantial advertising, three weekend open houses, and a lot of fanfare … it didn’t sell at Saturday’s auction.
We attended another auction last Saturday that did result in a sale. The property was spectacular -10.7 acres, magnificent views, over 3,775 square foot home with a 3,775 sq.ft. basement, 2,400 sq.ft. shop with four roll up doors, etc. Well constructed and maintained, the property cost the Seller over $650,000 to build and was owned free and clear. After extended traditional marketing at well over $700,000 without a sale the Seller hired an auction firm from Missouri to hold an absolute auction. An absolute auction means the property will sell at the highest bid price with no minimum, reserve, or other “catch”. The auctioneer worked with a local real estate agent in marketing, staging and conducting the auction.
The absolute auction attracted around ten bidders including our investor/friend that we were representing. The auctioneer did a great job of disclosure and informing the participants of how the process would work. At the advertised time, 10:07 a.m., the sale started. After bids stalled at $350,000 there was a three minute break so people could consult with their real estate agent, spouse, partner, etc. Bidding resumed and soon there were but two active bidders. The successful bid was $400,000, effectively $440,000 as the Buyer had to pay a 10% auction fee (5% in the auction for our listing – pay attention to fees!). The Seller sold his house.
Our Advice: If you are considering selling or buying a property at auction do your homework. As a Seller you need to decide what kind of auction you will hold, reserve or absolute, and what the ramifications of each will be. Ideally, auction frenzy will grip a bidder and they will pay too much … isn’t that why you are thinking auction? Your home hasn’t sold at a realistic market value so you want to find the greater fool? Buyers at real estate auctions are quite savvy and are actually looking for something better than what they can get in the traditional marketplace. We were pleased to see the number of people with money to invest. Sure, they were typical Buyers in today’s market looking to make a great buy … but they were there with money in hand ready to spend it. That’s refreshing.
Different than foreclosure or tax sales, themselves auction-based sales processes, these real estate auctions have a different feel to them. Your personal situation and property specifics will determine if such an auction will work for you. Consult with your real estate agent to see if it will help you meet your objectives. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. carsonvalleyland@hotmail.com, www.carsonvalleyland.com
