I've got a lot more information for those of you who are either contemplating buying your first house, or who recently bought one. This tax credit is retroactive back to April 9th of this year!

If you've got additional questions on any of this, please get in touch!

• The amount of the federal tax credit is for 10% of the cost of the home, up to a maximum credit of $7,500. In essence, this is an interest-free loan that enables consumers to receive a tax credit on a dollar-for-dollar basis on their personal income tax return in the calendar year following the year of closing on their home. They begin paying the tax credit back the year after that and make equal installments during the next 15 years. If the homeowner sells the home at any point during the 15-year payback period, then the remaining amount is recaptured, unless they sell the home at a loss, at which point the balance is forgiven.
  • e.g., If a home costs $65,000, the allowable credit would be $6,500. If a home costs $120,000, then the allowable credit would be $7,500.
• Eligibility is for first-time homebuyers only. In this case, a first-time homebuyer is defined as an individual who has not owned a primary home at any time during the past three years, but who may have done so previously. Although certain income limits do apply, the amount of the credit is the same for all taxpayers, married or single.
• Individuals whose Form 1040 filing status is single (or head of household) are eligible for the tax credit if their income is no more than $75,000. Individuals who file a joint return may have no more than $150,000 in income.
• Individuals with incomes between $75,001 and $94,999 (single) or $150,001 and $169,999 (joint returns) are eligible for a partial tax credit.
• Individuals with incomes greater than $95,000 (single) or $170,000 (joint return) are not eligible for this tax credit.
• The federal income credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home between April 9, 2008 through July 1, 2009. Individuals should consult a professional tax advisor for exact tax calculations.
  • e.g., If an individual’s actual tax liability was $5,000, then after the tax credit is applied the purchaser would receive a total refund of $2,500. The refundable amount is the difference between the $7,500 tax credit and the amount of one’s tax liability.
  • e.g., If an individual’s actual tax refund was $2,000, then after the tax credit is applied the purchaser would receive a total refund of $9,500.
• This tax credit is required to be repaid without interest in equal installments of 6.67% of the total credit each year for 15 years beginning the year after the tax credit is claimed.
  • e.g., If a homebuyer claims the $7,500 credit in 2009 on their federal income tax return for a closing that occurred in 2008, then the credit is received in 2009, so repayment begins in 2010 with an annual repayment amount of approximately $500 a year.

In Commonwealth Magazine, the publication of the Virginia Association of REALTORS, there is an article this month that discusses the effect of impact fees on home affordability.

It quotes a study from the NAHB of saying that each $1,000 increase in the costs of home ownership reduces the number of prospective buyers by 217,000.

The implication of the article is that fees such as higher construction permit fees, tap fees, proffers required frombuilders and such things as the new taxes contemplated by some northern VA counties to pay for infrastructure are a bad thing.

Here's the problem with that implication. All of these fees, taxes, etc. are, in their own way, a way to offset the increased infrastructure required as new homes are built and new residents are added to an area. Increased population requires additional roads, schools, hospitals, sewers, etc.

Since all of these things have costs associated with them, the money has to come from somewhere. If you're not going to get that money from the builders making money off selling those homes, or from the new homeowners who, after all, will be the people utilizing those new services, who should pay?

The only people left, it would seem, are the existing homeowners. They would see an increase in their own taxes to help fund new infrastructure for the benefit of other people. It's hard to see anyone jumping on that bandwagon!

No one likes fees or taxes, regardless of their political persuasion, regardless of whether they use the services that those fees fund. But you can not simply continue to add population without infrastructure. And you can't expect existing home owners to absorb the entire burden. You're asking for an anti-growth backlash!

"Even modest impact fees can have a dramatic effect on housing affordability," says Jerry Howard, the CEO of NAHB.

I'm still waiting for his suggestion on who, then, should pay for the infrastructure!

I think we've all seen what happens when no one pays and construction continues and the services aren't there for the newcomers. Is everyone enjoying their commute from this area into northern VA and DC?

So, what do you think? How do we pay for infrastructure?

Some of my clients were telling me this week about teasing their neighbors that it was a competition in the neighborhood to see who could sell first! It was just good natured ribbing and I thought it was funny.

But I've been thinking about it since and that's actually exactly right!

If only 20% of the houses currently on the market are going to sell, at all....

And, if there are a very limited number of buyers out there....

Every seller is absolutely in a competition to get their house sold as quickly as possible! If there is one buyer looking in the neighborhood, that might be the only one around for quite awhile! You are absolutely competing against your neighbors for the attention of that buyer. And this is definitely a beauty contest!

And, you're competing to sell yours first because the Days on Market number matters to buyers. In this market I know it doesn't seem fair. But every day your house is on the market gets you closer to when buyers start to wonder what's wrong with your house.

So you'd better be playing to win!

I just got back from a three day conference sponsored by the Women's Council of REALTORS. It's one of the oldest professional organizations in the real estate world, started when the good old boys from the National Association of REALTORS wouldn't allow women to join!

Now women are welcomed into all the organizations and men are also members of WCR!

But I didn't so much want to talk about this organization or conference in particular but rather, why it's good for my customers and clients that I attend such events.

First of all, I learn new things! Sometimes I'll pick up a new marketing strategy that will help me with getting a client's house sold! Sometimes I'll pick up information on fraudulent things that are showing up on contracts and that I need to be aware of. There's always something that ends up benefiting both my clients and myself.

A second reason for going to conferences is to meet other REALTORS from all over the country. This helps my clients when they move to other areas. I often already know someone where they're going. And I can make sure they have an agent who will take good care of them! And, if I don't already know someone, the professional organizations I belong to provide potential agents who may be able to help my client. If I don't know someone I will interview them before sending a client to them. I want to make sure first of all that they're a professional I'd feel good about dealing with. I also want to make sure that in terms of background, personality and specialty they're a good match for my clients. There are agents who specialize in senior citizens. I'm not going to send that young family being relocated across the country to work with that agent. It's just not a good fit.

The goal is, since I can't take care of them myself, to get them the same level of service as if I could!

If you know someone moving out of the area, make sure you ask them how they're choosing their real estate agent in their new location. Throwing darts or choosing randomly from a web site probably isn't the best bet! I'm always happy to help them find the right individual.