President Obama has signed into law the expansion of the program for granting tax credits to home buyers. Now it’s time for both current Baltimore homeowners and first-time buyers who are considering a home purchase to work with their Baltimore Realtor® on a plan for taking advantage of this financial opportunity.

To help you get started, here are the 12 things home buyers need to know about the tax credit:

• A first-time home buyer is defined as an individual or married couple who has had no owernship interest in a principal residence in the United States for three years before making the purchase for which they plan to claim the tax credit.
• Existing homeowners are those who have lived in their current home for at least five consecutive years over the previous eight years.
• For first-time buyers, the tax credit is equivalent to 10 percent of the purchase price of a home, up to a maximum of $8,000.
• Current homeowners are eligible for a tax credit of up to $6,500.
• The tax credit applies only to primary residences purchased for less than $800,000.
• For both first-time buyers and current owners, the annual income limits for receiving the full credit are a maximum of $125,000 for singles and $225,000 for married couples. Above those levels, the credit begins to phase out. To calculate the credit for buyers making more than those maximums, subtract the amount of the initial phaseout threshold from total earned income and divide the answer by by $20,000. Then multiply that ratio times the maximum amount of the credit. For instance, an individual who earned $135,000 would get a $4,000 first-time home buyer credit ($135,000 minus $125,000 = $10,000. $10,000 divided by $20,000 = 1/2. $8,000 times 1/2 = $4,000.)
• To claim a credit, both first-time buyers and current owners must have a signed sales contract before May 1, 2010, but they have until the end of June 2010 to actually close the transaction.
• For first-time buyers, the credit applies to purchases made on or after Jan. 1, 2009. For current owners, the purchase must have been made no sooner than Nov. 7, 2009.
• Buyers won’t have to pay back the credit if they use their new property as their primary residence for at least three years after the purchase.
• Buyers can claim the credit on their 2009 taxes, even if they buy their new home in 2010. They just have to file an amended return.
• To help prevent fraud, the legislation requires taxpayers to provide documentation — such as a copy of the buyer’s HUD-1 Settlement Statement — proving that they purchased a home. It also requires taxpayers to be at least 18 years old to claim the credit.
• Members of the military get a later deadline and will be allowed to sell their home without having to repay the credit if they are deployed to another location within three years of purchasing the home.

This may seem complicated at first, but it’s something we’re dealing with every day. If you have any questions, or want some help finding your way through this maze, give us a call, and we’ll be happy to help.

In the Baltimore real estate market, it’s no longer unusual to come across an asking price that is clearly too low for the home’s neighborhood. Often, it’s a short sale, which means the seller’s lender is accepting a discounted payoff to release an existing mortgage.

Should you buy a short sale house?

Yes, if….

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Every Baltimore Realtor® has met people who like the idea of selling their home without using a real estate agent. Who wouldn’t want to save the 6 percent on a home sale? But if that’s all there were to it, why did for-sale-by-owner (FSBO) deals account for only about 7 percent of Baltimore-area home sales last year? (That’s what the National Association of Realtors said in a report they did for the Greater Baltimore Board of Realtors.)
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Elizabeth Weintraub at About.com has some great tips for home owners who want to buy a brand new, built-from-scratch home, because they don’t like the idea of buying a “used” home. They don’t want to deal with the worn carpeting, the dings and dents of someone else’s life, or someone else’s taste in decorating.
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There are entire books written about buying a house. Here are a few tips to help you get started.
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First impressions are everything in selling a home. People make decisions about whether to look inside a house based on curb appeal. People make decisions about buying a house based solely on the color of paint in the bedrooms.

You, as the seller, are thinking, “that’s easy. It took us half a day to paint that room. Why can’t you just paint it after you buy it?”
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I’ve been in the real estate business for over 23 years, and I’ve had my license longer than that. In that time, I’ve seen a lot of trends and patterns, and learned many lessons.

One of the most important lessons I’ve learned is the importance of working with an experienced agent, whether you’re a buyer or a seller. An experienced REALTOR® has the negotiating skills needed to help you get the best value for your money.
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People often ask me if business is slow at our agency, or if the economy has affected us in any way.

While the Baltimore real estate market is down in some places, we’re actually very busy at The Harriett Wasserman Team.
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