Real Estate Information

Home Buyers Tax Credit Extended

In November the President and congress passed an amended extension of the Home  Buyers Tax Credit.  The extension allows for First Time Homebuyers as well as Previous Home Owners to receive a tax credit for purchasing a home.  Below are a few of the guidelines for qualifying for the tax credit.

 Who is Eligible

-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their primary residence may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program. 

Income Limits

Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income is less than $125,000.

-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose adjusted gross income is greater than $145,000 and married couples with a adjusted gross income that exceeds $245,000. 

 Effective Dates

-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

Sealing Air Leaks

Warm air leaking into your home during the summer and out of your home during the winter can waste a lot of your energy dollars. One of the quickest dollar-saving tasks you can do is caulk, seal, and weatherstrip all seams, cracks, and openings to the outside. You can save on your heating and cooling bill by reducing the air leaks in your home.

Tips for Sealing Air Leaks

How Does the Air Escape?
Air infiltrates into and out of your home through every hole and crack. About one-third of this air infiltrates through openings in your ceilings, walls, and floors.

• First, test your home for air tightness. On a windy day, carefully hold a lit incense stick or a smoke pen next to your windows, doors, electrical boxes, plumbing fixtures, electrical outlets, ceiling fixtures, attic hatches, and other locations where there is a possible air path to the outside. If the smoke stream travels horizontally, you have located an air leak that may need caulking, sealing, or weatherstripping.
• Caulk and weatherstrip doors and windows that leak air.
• Caulk and seal air leaks where plumbing, ducting, or electrical wiring penetrates through walls, floors, ceilings, and soffits over cabinets.
• Install foam gaskets behind outlet and switch plates on walls.
• Look for dirty spots in your insulation, which often indicate holes where air leaks into and out of your house. You can seal the holes with low-expansion spray foam made for this purpose.
• Look for dirty spots on your ceiling paint and carpet, which may indicate air leaks at interior wall/ceiling joints and wall/floor joists. These joints can be caulked.
• Install storm windows over single-pane windows or replace them with more efficient windows, such as double-pane. See Windows on page 18 for more information.
• When the fireplace is not in use, keep the flue damper tightly closed. A chimney is designed specifically for smoke to escape, so until you close it, warm air escapes-24 hours a day!
• For new construction, reduce exterior wall leaks by installing house wrap, taping the joints of exterior sheathing, and comprehensively caulking and sealing the exterior walls.
• Use foam sealant around larger gaps around windows, baseboards, and other places where warm air may be leaking out.
• Kitchen exhaust fan covers can keep air from leaking in when the exhaust fan is not in use. The covers typically attach via magnets for ease of replacement.
• Replacing existing door bottoms and thresholds with ones that have pliable sealing gaskets is a great way to eliminate conditioned air leaking out from underneath the doors.
• Fireplace flues are made from metal, and over time repeated heating and cooling can cause the metal to warp or break, creating a channel for hot or cold air loss. Inflatable chimney balloons are designed to fit beneath your fireplace flue during periods of non-use. They are made from several layers of durable plastic and can be removed easily and reused hundreds of times. Should you forget to remove the balloon before making a fire, the balloon will automatically deflate within seconds of coming into contact with heat.

Sources of Air Leaks in Your Home
Areas that leak air into and out of your home cost you lots of money. Check the areas listed below.

US Department of Energy-Energy Savers

Heating and cooling your home uses more energy and drains more energy dollars than any other system in your home.  Typically, 46% of your utility bill goes for heating and cooling. No matter what kind of heating, ventilation, and air-conditioning you have in your house, you can save money and increase your comfort by properly maintaining and upgrading your equipment.  But, remember, an energy -efficient furnace alone will not have as great an impact on your energy bills as using the whole house approach.  By combining proper equipment maintenance and upgrades with appropriate insulation, air sealing, and thermostat settings, you can cut your energy use for heating and cooling, and reduce environmental emissions, from 20% to 50%.

Heating and Cooling Tips

*Set your Thermostat as low a is comfortable in the winter and as high as is comfortable in the summer.

*Clean or replace filters on furnaces once a month or as needed

*Clean warm air registers, baseboard heaters, and radiators as needed;make sure they're not blocked by furniture, carpeting , or drapes.

*Bleed trapped air from hot water radiators once or twice a season if in doubt about how to preform this tasks, call a professional.

*Place heat-resistant radiator reflectors between exterior walls and the radiators.

*Turn off kitchen, bath and other exhaust fans within 20 minutes after you are done cooking or bathing;when replacing exhaust fans consider installing high-efficiencies, low-noise models.

*During the heating season, keep the draperies and shades on your south facing windows open during the day to allow sunlight to enter your home and closed at night to reduce the chill you may feel from cold windows.

*During the cooling season, keep the window coverings closed during the day to prevent soar gain.   (U.S.Department of Energy)

The first step to taking a whole-house energy efficiency approach is to find out which parts of your house use the most energy. A home audit will pinpoint those areas and suggest the most effective measures for cutting your energy costs.

Energy Auditing Tips:

*Check the insulation levels in your attic, exterior and basement walls, ceilings, floors, and crawl spaces. Visit www.energysavers.gov for instructions on checking the insulation levels.

*Check for holes or cracks around your walls, ceilings, windows, doors, light and plumbing fixtures, switches, and electrical outlets that can leak air into or out of your home.

*Check for open fireplace dampers.

*Make sure your applianecs and heating and coooling systems are properly maintained. Check your owner's manuals for the recommended maintance.

*Study your family's lighting needs and use patterns, paying special attention to high-use areas such as the living room, kitchen, and outside lighting.  Look for ways to uselighting controls-like occupancy sensors, dimmers and timers-to reduce lighting energy use, and replace standard (incandescent) light bulbs and fixtures with compact or standard flourescent lamps. (US department of energy)

Stay tuned weekly for more energy saving tips. 

Some deals are tough and no fun. Some are tough and a lot of fun. This one was great fun because of the buyers.

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The question keeps coming up, "what is in the future for the real estate market?' No one has a crystal ball, but here are some thoughts. Right now we have a large inventory of homes on the market that are either bank-owned or short sale properties. They are pretty much homes that were purchased through the "0% down or no documentation of income" type loans. We are probably seeing a slow down of those types of homes.

What does the future hold. Research data indicates that the next round of homes coming on the market will be those that were purchased with ARM (adjustable rate mortgage) loans and with the huge jump in interest rates that they include, these will also, to a large part, become bank-owned and short sales.

The general wisdom is if you don't have to sell, wait for a couple of more years. Eventually we will get out of this mess. Meanwhile, if you are an investor, or a 1st time home buyer, now is the time to get serious about purchasing a home at a great deal!

There is always a silver lining at the end of a storm. In this real estate market, the silver lining is for investors and 1st time home buyers. We loved working with these investors. Here is their story.

While working on earning my National Association of Realtors Green Designation, I learned about something called HERS (Home Energy Rating System), and how it can be determined by a Home Energy Evaluation. This intrigued me because I have some areas in my home that are "hot spots" during the summer months and I knew was affecting my utility bills.

I had the Evaluation done and I am looking forward to the printed results. As it was, it was amazing to see them use a special infrared camera that identified the areas where heat was coming into the house. What an eye opener.

Stay tuned for the results and the energy savings that can be achieved with some simple "fixes".

The signing of the American Recovery and Reinvestment Act, better known as the    stimulus package, contains several positive provisions to energize the housing market.  The stimulus is expected to play a significant role in the recovery of the housing market.

PROGRAM HIGHLIGHTS:

*First time home buyer tax credit was raised to $8000: If you purchase your home between January 1, 2009 and December 1, 2009.  Home buyers must live in the home for 3 years without selling in order to be eligible.  Use of credit reduces the purchaser's income tax liability. 

*Tax credit 2^nd loan option:  If you qualify for the first time home buyer credit and want to use it to purchase your first home in 2009, Idaho Housing has a new program that will allow you to borrower the credit as a down payment on your new home.  Call for details

*Mortgage rates are expected to continue to fall based on the buying of another $200-300 billion of mortgage papers from the GSEs, this will free up agencies to purchase additional mortgages: Falling mortgage rates, as the result of improving liquidity and credit in the mortgage market, will lower monthly mortgage payments for buyers and home owners.

*Fannie Mae has raised its total of investment properties financed to 10: The higher limit means investors can now obtain financing on up to 10 properties versus the previous 4.

*Mortgage Interest deductibility, Real estate tax deductibility, and the $250,000/$500,000 cap on tax free gains were all preserved.  The preservation of these important tax breaks continue to underscore that buying or selling a home remains a great tax  shelter for individuals and families.

*Loan limits up to $729,750 have been reinstated in high cost areas:  This allows borrowers to avoid a higher cost “jumbo” loan and instead allow them to get conforming loans with lower rates.