the best of times?

by Dec 29, 2009ModMarket0 comments


“It was the best of times, it was the worst of times”, A Tale of Two Cities, Charles Dickens

“Potter isn’t selling, Potter’s buying!” George Bailey in Frank Capra’s ‘It’s A Wonderful Life’

I have taken to quoting the above lines in recent months when discussing the current economic climate and it’s effect on the real estate market.  No one has seen anything like this before.  With my 15 years in the mortgage industry and Susan’s 6 years in real estate we have witnessed this crisis from the front row.  We have seen friends, clients, colleagues and companies suffer personally, professionally and financially.  We empathize deeply with all those who are struggling in these trying times.

While it is certainly a time to hunker down, fortify your perimeter and focus on weathering the storm there is also opportunity afoot.  The extended and enhanced home-buyer tax credit combined with unprecedented low mortgage interest rates make this an excellent time to buy if you are in a position to do so.

Here are the tax credit highlights.  Please call or e-mail if you would like more detailed information.  The tax credit was originally slated to end November 30, 2009. It has now been extended into 2010. If you have a signed purchase agreement by April 30, and close the transaction before July 1, you’re eligible for the credit.

First-time homebuyers are eligible for a credit of 10 percent of the price of the home, up to $8,000. (Married couples filing individually can receive $4,000 each.) You are considered a first-time buyer if you haven’t owned a principal home in the U.S. in the last three years.

The tax credit has also been expanded to buyers who have owned a home at some period during the last three years and used it as their principal residence for five consecutive years in the last eight. They can receive up to $6,500 – or $3,250 for couples filing as individuals.

Individuals who earn up to $125,000, and couples who earn up to $225,000, are eligible for the full credit. Individuals who earn between $125,000 and $145,000 – and couples who earn between $225,000 and $245,000 – can receive a percentage of the full credit.

If you qualify for the tax credit and are in a position to qualify for a mortgage, harder than ever but with fixed rates in the 4’s and adjustables in the 3’s, you might want to give it some serious consideration.  Things are slowly improving but it is still a buyer’s market.  Your buying power will probably never be greater.  Don’t forget if you do get the itch to start home shopping, if you are like most people you will probably need to sell your home before you can buy another.  If you are not prepared to sell, it’s likely you will find a home you love and lose it because you weren’t able to pull the trigger because of your present home.

Is it the best of times?  Is it the worst?  Are you selling like the masses or are you buying like Potter?  If you want to talk about it with someone, don’t hesitate to contact us.

-Arlen Rissover


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