Editorial
Front Page - Friday, April 9, 2010
Buyers ‘on the fence’ urged to get on board before deadline
Erica Tuggle
Elaine Boyd-Osby is the manager of the Prudential Realty Center in Hixson and has answered many buyer and seller questions about the tax credits. Above, she stands in a gazebo of one of her properties on 5100 Hunter Trail that is eligible for the credits.
- Erica Tuggle
The homebuyer’s tax credits, both expiring April 30, came at the right time to stimulate the worrisome economy, Elaine Boyd-Osby, the manager of the Prudential Realty Center in Hixson, says.
“It allowed us to turn the corner on a difficult year,” she says. “Home sales are a critical part of how our economy progresses, and we were in a very downward trend. Without the credits, this trend would have continued as the changes in the lending guidelines got tighter, making it harder for buyers to qualify.”
Area home sales are up in the first quarter of this year versus the same quarter last year in several price ranges, she says. Homes up to $100,000 have seen a 28 percent increase, with homes in the $100,000 to $150,000 range up 17 percent and homes $150,000 to $200,000 up 15 percent, as well as the days on the market for homes decreasing.
The first time homebuyer’s credit of $8,000 began to be offered last year to those who met the guidelines on income and the home price range. The $6,500 credit for repeat homebuyers began to be offered Jan. 1 of this year.
Randy Durham, the president of the Chattanooga Assoc-iation of Realtors and a Keller Williams agent, says the main purpose of the credit was to get those who would otherwise not make the leap into home buying to react to this offer.
“I don’t think there is anyone out there who is thinking of buying a home that is not aware of this,” he says. “Offers on properties show that they are reacting to the deadline.”
Although the deadline for eligibility for these credits is quickly approaching, Boyd-Osby says there is plenty of time to get on board.
“We can still show properties and find buyers a property of choice between now and the end of April, and as long as they are under contract by April 30, we’ve got sufficient time to close them out until the deadline on June 30,” she says.
Boyd-Osby says getting the credit is very simple. Once the house has been contracted and closed, the only things needed for the 2010 tax filing to obtain the credit is the IRS Form-5405 and the settlement statement. Although, she does warn that if you owe anything to the IRS it is going to be subtracted from the tax credit received.
Yet buyers don’t have to wait till next year to receive their credit. If they closed on their house before April 15, they can put the return on this year’s taxes or can amend their tax statement after April 15 to receive the credit this year, Durham says.
In the Prudential offices, Boyd-Osby says, they have been displaying reminders about the credits’ deadline on the message board as well as using word of mouth and general advertising to raise public awareness. Last year, the office had two first time homebuyer’s seminars where the public was invited to meet a mortgage lender and credit counselor as well as receiveinformation packets on the home-buying process.
Although, rumors were heard at the end of last year that the credit was going to be extended, Boyd-Osby says she is not hearing them as frequently now as she did then.
“We are still uncertain as to whether this credit is going to be extended again or not, but I sure hope it is.”
Only homes purchased between Jan. 1, 2009 and April 2010 are eligible for a credit. A first time homeowner is not limited to those who are first time purchasers of a house, but rather anyone who hasn’t owned a home in three years Durham says.
Some of the guidelines on the credits include that it cannot be claimed for homes over $800,000 or for inherited or gifted homes; those who sell the new home or stop using the home they purchased within three years have to repay the credit; and members of the armed forces can take advantage of this credit until April 30, 2011. These credits also cannot be applied to the down payment or upfront loans, he says.
“I’ve been a realtor for 22 years, and nowhere in my career have I seen the conditions so condusive to home buying, with the low interest rates, a great inventory of homes to choose from and the homebuyers credit,” Boyd-Osby says. “Those who are sitting on the fence need to get off the fence quickly.”
“You may not see this again for years,” Durham says. “In addition to, the credit offers there is the best supply to choose from because inventory is bloated.”
In addition to, restarting the home industry, Durham says, the credit should also further the economy in general.
“The homebuyers are getting their credits and spending the money on the house and other items in a way that is helpful in simulating economy,” he says. “Buyers know what they want to spend it on, and it’s not just housing. I had a buyer that knew as soon as he received his credit, he was going to put up a privacy fence.”
With this credit, buyers have unknowingly encouraged sellers to list because of the quick turnover rate possible for listing a home in a popular sales area and a popular price range. Durham says as the medium sales prices continue to fall, sellers see this is the time they have the best chance of snagging a buyer.
“We have the largest number of sales now since the year 2002 and back,” he says. “We are seeing the return of the market that has been in recovery. We are well on our way to normalization for the Chattanooga housing market if this continues.”
Boyd-Osby says that if anyone is even remotely interested in the credit, and are in a position to buy, they need to get with an agent and start looking at homes.
She says, “It takes a few days or weeks to decide on your home and negotiate a contract with a seller. Make an appointment with your mortgage lender, bank or credit union of choice so you will be in a ready position when you do make an offer to a seller on his home.”
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