Battling the Known and Unknown to Get to the Closing Table

A real estate transaction is a complex process that involves a number of professionals from a variety of industries.  At the heart of it all, however, is a seller who wants to sell and a buyer who wants to buy. 

If only it were an easy process to fulfill the simple wants of these two parties.

Unfortunately, there are key moments in the timetable of a purchase where all can come crashing down and neither buyer nor seller has his or her desires fulfilled.

The first key moment occurs during the initial contact negotiation.  Offers and counter offers can fly back and forth before both buyer and seller are satisfied with the resulting price and terms. Very often all can go awry. . .buyers trying to find a steal encounter sellers who are firm on price and neither is willing to budge.  Or, in this current market, competition for lower priced homes creates a multiple offer situation and a better buyers snags the deal.

The second crucial hurdle that must be overcome occurs during the inspection period.  The private home inspection can unearth potential issues with the property.  Repairs can be negotiated in some circumstances, but with the glut of bank owned properties and short sales in the Joliet area real estate market, an "as-is" purchase is becoming more common.  Additionally, FHA and VA loans are gaining in popularity and availability.  Both require that the home be in livable condition, with VA being more stringent still.  Navigating the potential inspection problems requires foresight and problem solving skills.  However, sometimes property condition is a deal breaker.

And even if the contract is negotiated to everyone's satisfaction, and the inspection issues are settled, very often unforeseen issues arise halting the progress toward closing.  Last minute underwriting conditions, PMI requirements, title issues. . .the list is endless and constantly changing.

Buying or selling a home is naturally a stressful process, getting to the closing table requires patience, perseverance and often a bit of creativity.  But when all the documents are signed and keys are exchanged, the effort is worth the end result.

Buy a House. . .Collect $8000 Bucks!

First time home buyers are facing a fabulous opportunity thanks to the American Recovery and Reinvestment Act of 2009.  A key component of this new legislation is a tax credit available to first time buyers.  For those of you unfamiliar with the credit, individuals who have not owned a primary residence in the last three years may be eligible to receive a dollar for dollar income tax credit of 10% of the purchase price of a home up to $8000.  This credit may be claimed in full by individuals whose modified adjusted gross income is $75,000 or less, for married couples filing jointly the income limit is $150,000.  For individuals over these income limits, the tax credit is reduced.

This credit applies to purchases on or after January 1, 2009 and before December 1, 2009 and never has to be repaid. If the home is sold in the first three years after it is purchased the entire credit is recaptured on the sale, but if the buyers live in the home for three years, there is no recapture.  In essence, this is free money available to first time home buyers who are purchasing a home and intend to live there longer than three years.

What many do not know or understand is that the $8000 first time home buyers tax credit can be claimed on 2008 tax returns.  The law allows for qualified home purchases made in 2009 to be treated as if the purchase occurred on December 31, 2008.  Even if the purchaser has already filed his or her 2008 tax return, an amended return can be filed to IMMEDIATELY claim the $8000 credit.

This is a true tax credit, a dollar for dollar reduction in what the taxpayer owes. For example, if you owe $1000 and claim the $8000 credit, you would receive a nice fat check for $7000 as a tax refund.  A qualified tax professional can assist in filing the proper forms to ensure full credit.

First time homebuyers have a unique opportunity.  This newly enacted tax credit, coupled with historically low interest rates and moderately priced housing inventory, has created a great buying opportunity for those who are willing to act quickly.