You Dont Have to be A First-Timer for the Extended Home Buyer Tax Credit

The current first-time home buyer tax credit, due to expire at the end of November, has been extended through April 30, 2010 by Congress and is on its way to the president for his signature. Realtors have reported that the first-time home buyer tax credit has had the same positive effect on home sales that the "cash for clunkers" program had on automobile sales.

The legislation expanded eligibility for the home buyer tax credit to include people with higher incomes and those who have already owned a home for at least five years so long as they sign a purchase contract by April 30, 2010 and close on the purchase by June 30, 2010. The $8,000 maximum first-time buyer tax credit will continue and now be available to individuals with incomes up to $125,000 and couples with annual incomes up to $225,000. Home buyers with incomes up to $145,000 and couples with incomes up to $245,000 will be eligible for reduced tax credits.

Under similar income limits, a $6,500 maximum credit will be available to those who already own a home and presumably wish to move up to a larger home.

Under the new income limits, two-thirds of all American families who own their own home may be eligible to buy a new home. While buyers will not be required to sell their current home to qualify for the new tax credit, the money must be used to buy a new "primary residence", not a vacation home or investment property.

To keep speculators out of the program, people who claim the credit but then sell the home or no longer use it as their primary residence within three years will be required to repay the credit. The intent is to exclude from the program speculators who might purchase a home intending to flip it for a fast profit, according to Max Baucus, chairman of the Senate Finance Committee.

Here's a "heads-up" to those who may have considered buying a first home under the prior program but didn't get around to it.

"Contact a Realtor and get started now. You only have until April 30, 2010."

Legislators in both houses of Congress have indicated that this costly program will not be extended again. Critics point out that only about one-fourth of the homes purchased under the prior program would not have been bought anyway without the costly tax-credit program. There are also concerns that the previous tax credit program encompassed high numbers of fraudulent transactions. In this version of the program, the Internal Revenue Service has been given much wider authority to oversee the process to root out fraud.

Home Sales in Sarasota Take Off in September, 2009

Sarasota home sales soared in September, 2009 surpassing even the most optimistic forecasts.. The median price pf homes and condos, being held down by foreclosures and short sales certainly helped produce the high volume the sales..

Real estate expert Barbara Corcoran on a recent Today Show declared Sarasota Florida to be the #1 city in the entire U.S. in which to buy a home right now, citing dramatically lower property prices (as much as 30% off the highs reached two years ago). The sales volume and reduced prices have resulted from lots of foreclosures and short sales in the area in recent months. Ms. Corcoran also noted, however, that prices have just begun to swing back upward.

She also praised the unique Sarasota attractions and amenities including sports, arts, cultural facilities as well as the excellent health care and schools in Sarasota Florida.

Sarasota home and condo property sales in September rose by nearly 35% in September 2009, compared to September, 2008, and nearly 10% over August of 2009.

Those who have been dreaming of one day owning a seasonal golf course or waterfront home for now, planning to move to Sarasota permanently when you retire, need to come to Sarasota right now, as Barbara Corcoran suggested, to see and take advantage of bargain prices that haven't been seen for several years.

Don't Lose Out on Your Capital Gains Exemption

For those who have already bought their retirement home or condo in Florida, it seems like an obvious move to change your legal residency to Florida to avoid paying income taxes on your earnings from up North. Many people do this even while maintaining their homes up North until they decide they are ready to move to Florida full-time.

But beware, you may be setting yourself up for a "big" tax bill.

The home seller's capital gains tax exclusion on the sale of your home up North is only applicable if that home was still your "principal residence" for at least 2 of the past 5 years before you sold it. Put simply, once you become a Florida resident, which is usually accomplished by doing things like registering to vote in Florida, registering your auto in Florida and then spending more than 6 months and a day in Florida each year, you only have 3 years to sell your home up North before the capital gains exemption on the sale of the home up North expires.

Once you lose that capital gains exemption, you will be hit with the standard 15% federal capital gains tax on the gain on the sale of that home as well as any state taxes that may also be due on that gain.

If you have questions or concerns about this, contact a knowledgeable real estate attorney or your accountant to assure that you don't give away a lot of money to your state and federal governments..

Sarasota Florida Ranks High as a "Smarter City

Sarasota Florida has just been ranked at the Number 4 spot on its list of the top small “Smarter Cities.” The rankings of :smarter cities" was done by the The Natural Resources Defense Council (NRDC). Sarasota was recognized for the quality of its air and water as well as its environmental standards and participation in programs like green buildings, green space and recycling. "Smarter Cities" are considered to be more efficient, more environmentally conscious,and cleaner and therefore more enjoyable communities in which to live.

Sarasota was scored by www.smartercities.nrdc.org, an NRDC-affiliated website. The city of Sarasota ranked 4th after Bellingham, WA, Mountain View, CA and Norwalk, CT in that order among "small" cities; those with populations between 50,000 and 100,000. No other Florida city made the top 10 list of "Smarter Small Cities."

The SmarterCities.nrdc.org website said “... Sarasota has involved its residents through environmental education at schools, community groups including the local women’s club and Boys & Girls Club, and outreach programs like Sustainability Advocacy Volunteer Educators, which provides green internships for high school and college students."

Sarasota had begun a water-quality program as early as 1989 in the interest of water conservation and protection. The city’s water system now reclaims 70% of waste water annually. Conservation-pricing is used to encourage consumers and businesses to use less fresh water. Lawn and garden watering is limited to one day per week.

Sarasota has even started a "rain-barrel demonstration" project at City Hall for watering flower beds without sprinklers, and created a how-to guide for residents to use at home. To protect local landscapes and irrigate efficiently as well as to promote native growth and wildlife, the city encourages Florida-friendly landscaping.

“The city’s Environmental Management Task Force was formed in 2007. In April 2008, the city created a full-time Environmental Services position. The city government now expedites permits for Green Development and Green Building.

A few examples:

• Since initiating a "tree-planting" program in 2000, over 100,000 trees have been planted in City right-of-ways. Sarasota has committed $1.5 million in the next 10 years to the "Green Canopy Partnership" tree-planting program.
  
• The North Sarasota Public Library was only the second library structure in the nation to be certified as a "Leadership in Energy and Environmental Design" LEED Gold structure for its use of low-VOC paint and carpeting, water-wise landscaping, and use of recycled building materials.
  
• The city government helped found the "Sarasota Bay Estuary Program," dedicated to protecting Sarasota Bay and its connecting waterways.
  
• Sarasota has a "Green Business Directory" giving visibility to those businesses which provide green products and services.

There is a lot to like about Sarasota Florida including its warm balmy climate, abundant sunshine, golf courses of every type and level of difficulty, soft white beaches, and a vibrant assortment of recreational and cultural activities for every taste and budget. Sarasota offers big-city amenities with a small-town way of life, but its also refreshing to live in a community so actively involved in assuring that the quality of life currently enjoyed by residents stays that way and even improves over time.

The $8000 First-Time Home Buyer Tax Credit

Will It be Extended or Not

Capitol Hill may be vacant right now as Senators and Congressmen are home listening to their constituents, but real estate and home builder lobbying group[s are actively working on a full-bore campaign to extend the $8,000 first-time home buyer tax credit currently scheduled to expire on November 30, 2009.

As you may know, the American Recovery and Reinvestment Act of 2009 (the stimulus package) authorized a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence between January 1, 2009 and November 30, 2009. The program has been quite successful in reducing the inventory of unsold homes while helping many afford to buy a first home.

The National Association of Home Builders (NAHB) and the National Association of Realtors (NAR) are both hoping to persuade Congress to pass legislation to extend the tax credit as soon as possible after Congress returns to Washington next week. The two associations are contacting members of Congress even while they are in their home districts during their congressional recess. One of the things they are pushing for, in addition to an extension of the first-time home buyer credit, is to expand the program to cover all home buyers through the end of 2010.

Senate Majority Leader Harry Reid recently indicated that he believes “it's something we can get done.” Senate Banking Committee Chairman Democrat Chris Dodd and Republican Johnny Isakson are sponsoring a bill that would extend the credit through 2010 and expand it to a $15,000 maximum. In the House, two bills have been introduced to extend and expand the credit for either 6 or 12 months. Both the NAR and the NAHB organizations are strongly supporting these initiatives.

With this impetus, it seems likely that in one form or another, the tax credit will be extended into next year, but...

As we've come to understand, there is no such thing as a "sure thing" in Washington. NAR spokesman Walter Molony recently justified his organization’s support for the tax credit saying that it is reducing the inventory of unsold homes and stabilizing pricing, benefiting the economy since in his judgment house prices “overshot to the downside.” But, the NAR also estimates that 1.8 million to 2.0 million first-time buyers will take advantage of the $8,000 first-time home buyer tax credit before the current version expires. the program, as it now exists is expected to cost about $15.20 billion.

Viewed another way, however, NAR's own estimate is that only 350,000 of the homes sold under the program would not have been sold without the tax credit. If you now divide the $15.2 billion the program cost by only those 350,000 homes that would not have been sold without it and you get a whopping $43,000 per additional home sold. And, critics say, the numbers will only get worse if the program is extended and expanded to cover all home buyers.

These negative views of the program could lead many fiscal conservatives in both the Democratic and Republican parties to complain that any extension will only add to the ballooning national debt. Legislation that looks, at any given moment, as if it will clearly be enacted can be delayed, watered down, or frustrated in the House and filibustered in the Senate.

Don't assume this program will be extended. If you are in the market for a home, and particularly if you haven't owned a home in the past three years, so you qualify for the current $8,000 tax credit, you should be working with a Realtor right now to buy the home you've been wanting so you can close on it before the November 30th expiration of the current program. If you aren't already involved, contact a Realtor and get started toward owning your piece of our Sunny Southwest Florida paradise.

All About Short Sales

Now that you're hearing so much about them, you may be wondering what exactly a "short sale" is. In most cases, it is a property for sale whose owner is facing foreclosure and trying to preserve his/her credit rating.

Short sales are different from other property sales. Instead of only involving two parties, the buyer and seller, a short sale also involves the holder of the mortgage loan. The seller has approached his or her mortgage holder requesting to sell the property for less than the balance owed on the mortgage, thus the expression “short” sale. The mortgage holder may reject that request and proceed into foreclosure, but many banks are ready now to accept less money for a property than is owed on it because a short sale will likely cost the bank less than putting the property through foreclosure. A short sale can be a good deal for the seller and it can also make the property a good deal for a buyer.

If you are a buyer looking for a great deal, a short sale properties can be an attractive option although you need to understand the differences between a normal real estate purchase and a "short sale." In a short sale, the buyer and seller negotiate and agree on a price as with a normal real estate transaction. The differences are as follows. You will have to offer to buy the property "as is." The seller is very unlikely to agree to pay for any repair needs uncovered during a home inspection. You also will not be able to stipulate any contingencies. At this point, the process moves out of the seller’s hands to the bank’s loss-mitigation department.

To increase your chances of a successful offer, make your offer price reasonable and include a substantial earnest money deposit. If you plan to use a mortgage to pay for the home, include a lender approval letter with your offer.

A buyer's offer usually takes about 30 or more days to get through the bank's loss mitigation process. Mortgage holders seldom make counter-offers and some banks will not notify you or your Realtor if the offer has been rejected... only if it is accepted.

If you are a prospective short sale buyer, any licensed Florida Realtor will work with you to get you the best possible deal.

$1.8 Billion In Stimulus Funding Coming to Florida

The U.S. government just released $1.8 billion in stimulus money for education to Florida, two weeks after the state applied for a waiver required because the state underfunded education in previous years.

"The $1.8 billion Florida will receive today is part of the single largest boost in education funding in recent history," Secretary of Education Arne Duncan said in a statement. 'Florida can now utilize these funds to save jobs and lay the groundwork for a generation for education reform."

Although the money is expected to plug holes in school-district budgets to save jobs, South Florida's school districts might still see layoffs. Some observers fell, however, that contrary to all the rhetoric about `how it's to save all these layoffs, the reality is it's only going to help the state have fewer layoffs.

School districts won't be getting the funds directly from Washington. Florida law makers, confident the state would get the money, allocated funds to shore up the education portion of the 2009-10 budget the Legislature approved last week. That means that legislators could tout a small increase in per-student spending in Florida. But they reshuffled and reduced other parts of the education budget to do so, leaving school districts with less money than they had last year.

In addition to the $1.8 billion in so-called state stabilization funds, Florida has received almost $600 million in education stimulus dollars -- including about half the money the federal government designated for low-income schools, programs for disadvantaged students and other grants. Another $891 million in stabilization money will also become available this fall.

To receive the funds, the state had to assure the federal government that it would closely track education statistics, including annual student improvements, the effectiveness of state standards and assessments, and interventions in turning around under performing schools.

Florida will also have to report how many jobs will be saved using the stimulus money, how the funds are used and what state and local tax increases are avoided because of the federal dollars.