The first-time homebuyer federal tax credit expires on November 30, 2009, so if you’re considering buying a home, but haven’t started the process, the time is now!
On average, a residential closing takes about 45 days from contract to signing the papers; so even starting your search now may be cutting it a little close. It’s not a short process – you need to get a Texas Realtor, find your dream home, negotiate the terms of the contract and sign on the dotted line. Then there’s a host of details to take care of before closing the transaction. Better get going.
What it is
Under the American Recovery and Reinvestment Act, enacted in February, first-time homebuyers may qualify for a tax credit on their 2009 tax return of 10% of the purchase price of a home. The maximum benefit is $8,000, which means that any home above $80,000 qualifies the buyer for the full amount of the credit.
If you have a $3,000 tax burden and qualify for the full amount allowed under the program, you’ll actually get $5,000 back.
The official definition of a first-time homebuyer is someone who has not owned a home as a primary residence for the past three years. That’s it.
Interestingly, if you’re renting an apartment but you own a vacation home that is not your primary residence, you’re still eligible to claim the credit on your 2009 tax return.
The income qualifications are fairly straightforward. If you’re single and your modified adjusted gross income (MAGI) is less than $75,000 per year, you qualify for the full value of the tax credit. The credit for individuals begins phasing out at $75,001 and is unavailable to those whose MAGI exceeds $95,000 per year. Couples whose MAGI is less than $150,000 can take advantage of the full credit, with the phase-out beginning at $150,001 and ending at $170,000.
Get help right away
I strongly recommend you find a Texas Realtor. Time is of the essence with this tax credit, and you can rely on your Texas Realtor to keep things moving and ensure you meet the qualification deadline.
In addition to keeping the transaction on track, your Texas Realtor provides a high level of expertise and service, as well as being bound by the National Association of Realtors Code of Ethics.
Make a list
Do you know what you’re looking for in a home? Having a good idea what area of town you want to live in and which amenities are the most important to you gives your agent a solid starting point. Do you need four bedrooms, a home office, and a three-car garage? Want an open floor plan and a covered patio but are willing to compromise on one to get the other? Let your Texas Realtor know.
Get the ball rolling
There’s a lot to do after you find the house you want and have a signed contract with the seller. You’ll have to get the property appraised and inspected, repairs may have to be made, the title search has to occur, deadlines must be met, and more. There’s a specific order in which things must happen, delays are almost inevitable and the whole process can be a bit overwhelming. Remember – talk to your Texas Realtor.
Why you shouldn't wait?
There’s speculation that the program may be extended, but if you wait, you’re taking the risk of missing out. As of now, there’s no provision that will allow the credit to be issued if a delay pushes your closing to Dec. 1.
This is a good deal. Take advantage of it if you have the opportunity.
For more information about buying and selling real estate in the Lone Star State, I invite you to visit TexasRealEstate.com. For your real estate needs, please contact RE/MAX Genesis at 830-833-2000.