First Time Home Buyer Tax Credit

The clock is ticking on one of the most enticing features of the American Recovery and Reinvestment Act of 2009: the first time home buyer tax credit. The act authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence between January 1, 2009 and December 1, 2009.

Before you stop reading this because you have owned a home in the past, note that the definition of ‘First time home buyer’ is a buyer who has not owned a principal residence during the three-year period prior to the purchase. So even if you have owned a home in the past, but have been renting for the past three years, you would qualify!

What does the credit really mean? Plain and simple, it is cash back to you from the government. It is a dollar for dollar reduction in what you owe. If you owe $8000 in taxes for 2009, the credit would be applied and you will owe nothing. If your tax liability is only $1000, then you will receive a check for $7000.

What types of properties qualify? Any property that you will use a primary residence will qualify, including but not limited to single family homes, and condominiums. You will even qualify if you build a new home and occupy it before December 1.

Only 7 months remain in which to take advantage of this credit. Don’t miss out.

Source for this article and for more information: www.federalhousingtaxcredit.com/2009

Spring Into Lawn Care

It is late April and spring lawn care is important for lush, thick grass.

If you have a lawn, here are some quick tips you may want to follow:

1. Rake the lawn to remove all dead leaves that the blustery winds of winter blew onto your lawn. If there are no leaves, rake the lawn thoroughly to remove dead grass. Raking removes thatch, a build up of dead leaves and grass which prevents the proper growth of individual blades of grass.
   
2. If you have mossy type plants growing in your lawn, you may want to apply lime to ensure the soil acidity is proper for grass. Not every lawn needs lime so exercise caution and read instructions.
   
3. Seed the lawn. If you have bare spots that need to be seeded or a part of the lawn is worn after being used as a walkway during the winter, get out the rake again. Pay special attention to these areas with the rake to make sure all thatch is removed. Then, use a garden rake to create grooves for the seed. Spread the grass seed. Ask your garden center expert about which seed is best for your location.
   
4. Once the lawn is raked and seed planted, buy a multi step fertilizer and weed killer. Spread this over the entire lawn. Follow the instructions and make sure you don’t over apply. If you use too much fertilizer, it will burn the grass causing more harm than good. Make sure your fertilizer is a cool season fertilizer depending on where you live.

A typical time to start spring lawn care is now if you have warm weather. You can wait as until late April providing the weather is cool. Temperature for spring lawn care should be consistently in the 50’s.

Once you follow these simple steps, you too, can enjoy tall glasses of cool lemonade while standing.

Staging to Sell

Spring selling season is upon us and it’s time for a refresher on staging tips. With inventory still high, and so many properties competing with yours, you will want to do everything you can to help your property stand out from the others.

Real estate expert Barbara Corcoran said recently during an interview that a buyer decides if he or she has interest in a property within 8 seconds of walking through the door. That doesn’t leave much time to make a good impression! Use every second wisely by considering some of the following suggestions.

1. Curb appeal is important. When a buyer approaches your house, he or she makes the first judgment. Make sure your house is nicely painted. Repair that broken screen door. Tidy the front yard and plant some flowers. The buyer should feel drawn into the house and made to feel welcome by a warm and inviting entry hall.
   
   
2. Clear your house of clutter and personal belongings and scrub the house to within an inch of its life. Since your goal is to move out of the house, start packing today. Eliminate as many knick knacks as possible. Pack away any collections and replace photos of friends and family with neutral artwork. As far as cleanliness, everything should sparkle.
   
   
3. Straighten your closets and cabinets. Expect that buyers will open every door and cabinet. If your closets are packed to the gills, it will leave the buyer with the impression that the house does not have enough storage space.
   
   
4. Take the packing a step further and put extra furniture in storage. A sparse and simple approach to furnishings will make your rooms appear larger. Define a use for each room and furnish it accordingly. If you have a bedroom that has become a ‘junk room,’ pack the junk away and make the bed with inviting linens. It is important to show the buyer how the space can be used. When rearranging furniture, pull pieces away from the walls and keep in mind that you want to have a clear walking path between rooms.
   
   
5. A fresh coat of paint is inexpensive and goes a long way to making your home feel clean and fresh. Keep the colors earthy and neutral to appeal to the broadest audience. If you have a brightly colored room, consider re-painting it.
   
   
6. Shed some light on the subject. Open the blinds and turn on all the lights for showings. Bright spaces appear larger and overall create a positive impression. If you have heavy or dark drapes, consider replacing them with light colored window treatments.
   
   
7. Remove evidence of pets. When you are expecting a showing, pack up the pets and take a drive. That includes stowing away dog beds, crates and food dishes.
   
   
8. Make sure the house smells nice. Baking cookies before a showing makes the house smell yummy and inviting. This bit of advice is an oldie but goodie.
   

The common thread behind all of these suggestions is to present your home in as neutral a manner as possible so that the potential buyer can envision him or herself living in the property. While it is possible to achieve these goals on your own with very little expense, don’t rule out calling a professional stager to assist you if you are feeling overwhelmed. Being a proactive seller will ensure that you have done everything possible to help your property rise above its competition.

First Quarter Recap on Cape Cod

Here's information on properties sold, under agreement and for sale in Provincetown, Truro and Wellfleet ...


Property Sold: January 1- March 31, 2009

Provincetown

• Homes = 5
• Condominiums = 8
• Ave Days on Market = 324
• Ave Sales Price = $531,664

Truro

• Homes = 4
• Condominiums = 2
• Ave Days on Market = 177
• Ave Sales Price = $466,767

Wellfleet

• Homes = 8
• Condominiums = 1
• Ave Days on Market = 139
• Ave Sales Price = $420,333
  

Property Sold: January 1- March 31, 2008

Provincetown

• Homes = 5
• Condominiums = 31
• Ave Days on Market = 193
• Ave Sales Price = $424,344

Truro

• Homes = 4
• Condominiums = 4
• Ave Days on Market = 237
• Ave Sales Price = $515,713

Wellfleet

• Homes = 8
• Condominiums = 2
• Ave Days on Market = 300
• Ave Sales Price = $600,250
  

Property Under Agreement as of April 8, 2009

Provincetown

• Homes = 4
• Condominiums = 11
• Ave Days on Market = 241
• Ave Sales Price = $527,920

Truro

• Homes = 1
• Condominiums = 12
• Ave Days on Market = 149
• Ave Sales Price = $448,954

Wellfleet

• Homes = 4
• Condominiums = 0
• Ave Days on Market = 288
• Ave Sales Price = $609,475
  

Property On the Market for Sale as of April 8, 2009

Provincetown

• Homes = 74
• Condominiums = 162
• Ave Days on Market = 274
• Ave Sales Price = $685,532

Truro

• Homes = 80
• Condominiums = 56
• Ave Days on Market = 334
• Ave Sales Price = $878,063

Wellfleet

• Homes = 85
• Condominiums = 23
• Ave Days on Market = 290
• Ave Sales Price = $763,135

Is Mortgage Insurance the Latest Incentive to Attract Buyers?

President Obama announced last week from the G20 Summit that the recession has turned a corner. With rescue packages in place for struggling homeowners, interest rates as low as they’ve been in years and the stock market performing favorably, we are hoping he is right. A little spring sunshine in our economy may be just around the corner.

However, with the jobless rate the lowest it has been in 26 years, consumers are not motivated to buy a home out of fear of losing their jobs. Builders have identified this as the number one issue in selling new construction. Not having the resources to pay a mortgage due to a lay off ranks among the top anxieties in the United States today. Developers have stepped up to the plate and are now offering targeted incentives to overcome this obstacle.

Free upgrades like granite countertops, swimming pools and finished landscaping are a nice touch, but seem to have no impact on a buyer’s decision. These finishes are practically expected in today’s market and major developers recognize this.

Major builders are offering to pay for the buyer’s mortgage unemployment insurance as an added amenity to overcome the buyer’s fear of losing a job. Typically, this policy is valid in case the homeowner loses his or her job within the first two years of the purchase date. Up to six months worth of payments can be made while the buyer looks for a new job. The estimated cost of the insurance is around $450 to $900 per customer. 

This is definitely a bold marketing move and numerous builders are adopting this strategy daily. As with any sales promotion, time will tell how effective this program will be.

Calculating your Cost Basis

As tax time approaches, those who sold property in 2008 are faced with figuring out their capital gains or losses incurred. The task is less daunting than it seems. In order to calculate your profit or loss, you must subtract your cost basis from the sale price. The formula for calculating your cost basis is as follows:

Purchase price
+ Costs associated with purchase (attorney’s fees, title fees, escrow fees, real estate agent commissions …if you paid a Buyer’s Agent, etc.)
+ Improvements (Capital improvements like replacing the roof or furnace, etc. Interior painting, for example, does not qualify)
+ Costs associated with selling (attorney’s fees, real estate agent commissions, etc.)
- Accumulated depreciation (for example, if you ever took the office in the home deduction)
= Cost Basis

Then, if you subtract the cost basis from your sale price, you arrive at your taxable gain or loss incurred.

Don’t forget, the Taxpayer Relief Act of 1997 outlines a huge deduction available to individuals and couples in the sale of their primary residences. It states that if you lived in the property you sold for 2 of the past 5 years, individuals are entitled to deduct $250,000, and couples are entitled to deduct $500,000, from the total taxable gain. This tax break is a huge benefit for homeowners. (There are some exceptions to the 2 out of 5 rule based upon health concerns or other unforeseen circumstances. Seek professional guidance in these cases).

Two bits of advice: 1- Always consult your accountant and your attorney before buying or selling real estate to understand all of the tax ramifications. 2 - Keep good records of all of your capital improvements in order to assist your accountant with the task of determining your cost basis when it’s time to sell.