Home Buying for Less Real Estate Blog

Steps to Closing

December 30th, 2009

So you have found the property you want to buy. You and the seller have agreed on a price. What happens next? Though the home buying and selling process is a complicated one, here is a general step-by-step guide of what to expect on the way to home ownership.

The Contract

On the first step toward Closing, your HomeBuyingForLess agent will work with you on an ‘Offer to Purchase’ contract. Along with the agreed-on price, this document specifies the closing date, a description of the property, any contingencies that you as a buyer might prefer, and other details. Your HBFL agent will review this document carefully with you. It reflects the entire agreement between both parties, and once signed by buyer and seller, is legally binding. Typically earnest money is provided by you to demonstrate to the seller a sign of ‘good faith’. As a HBFL client, you also sign a rebate letter after the final agreed upon purchase price. This rebate letter allows you the buyer, working through your lender, to receive a portion of our commission at Closing. This can mean thousands of extra dollars for you when your home purchase is complete!

Make Official Loan Application

A next step in the process is the official loan application. Even if you were pre-qualified before starting your home search, now is the time to make it official. After securing the best available interest rate and type of mortgage for your needs, the loan application provided by your preferred lender should be completed and all requested documentation provided. This can take some time, so it’s best to start early. Once approved, you will receive a commitment letter from the lender that will specify any conditions of the loan offer that must be met before Closing.

Schedule Inspections

Next, property inspections should be scheduled to ascertain the overall condition of the property and determine what repairs, if any, should be requested. Homeowners are under no legal obligation to make repairs, but these repairs can be negotiated between buyer and seller if the condition of the property is less than ideal. Sellers are obligated to disclose material facts about the property, including known defects that may not be apparent during inspection unless the Sellers choose to “Make No Representation”. Termite inspections are usually required by the lender and should be scheduled 30 days or less before the Closing date. Buyers may also chose to schedule radon inspections and, like all inspections, are typically paid for by the buyer.

Choose a Closing Attorney

A next step is to choose a Closing Attorney, someone who will handle the legal aspects of the process and perform a title search on the property. A title check confirms that the seller is the legal owner of record and that there are no unsettled liens or other claims against the property. HBFL will be happy to make recommendations if you need help in choosing a reputable firm.

The Appraisal

One of the most common conditions of the loan offer is that the property appraise at or above the contract price. An appraisal will be ordered by the lender; the buyer, however, has to pay for the appraisal as part of the final closing costs.

Homeowner’s Insurance

A mortgage lender will also need proof of homeowner’s insurance for final approval of your loan. Homeowner’s insurance protects both the buyer and mortgage lender from loss in the event the house is damaged or destroyed, and rates vary by company. Be sure to shop around for the best deal.

Final Walk-Through

Once any repair issues have been negotiated and completed, the property appraises, and your loan is approved, you are almost there! Plan a final walk-through inspection 24 hours before Closing to avoid any surprises. The property should be in the condition specified in the sales contract. If not - for example, a pipe bursts - you can ask to delay the Closing until the situation is resolved and agreed upon between the buying and selling parties.

The Closing Appointment

This is the day you have been waiting for. Your attorney will let you know the amount of money (in the form of a certified or cashier’s check) you will need to bring to the Closing appointment. Once the final paperwork is signed, this is where you realize the HomeBuyingForLess rebate. When applied to the final closing cost of your new home, you will have just come out ahead by potentially thousands of dollars! Now, enjoy the keys to your new home!!

Along with advising you on reputable inspectors, attorneys, and other professionals, HomeBuyingForLess will provide timely utilities & HOA information for your new property to help your move go smoothly. Call HomeBuyingForLess to get started at 1-888-201-8565.

: Steve Doyle, President and Head Broker

: Lisa Doyle

: Hill Matthews

: Lia Baras

Tags: closing on your home, steps to closing, the closing process, the process of closing
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The Expansion of the Home Buyers Tax Credit

November 18th, 2009

If you have recently considered purchasing a new home, added incentives are now available with the recent extension and expansion of the First-Time Home Buyers Tax Credit. The previous deadline of December 1st , 2009 has been extended for first-time home buyers, and current homeowners are now included in the tax credit savings, too.

What has changed:

The most important change is that repeat homeowners can now claim a tax credit of up to $6500 on qualifying home purchases. Income limits have also been raised for both first time and existing buyers, and purchase dates have been extended through April 30, 2010.

Under the new provisions:

· The purchase price of the new home must be $800,000 or less.

· The income limit for single buyers is now $125,000, up from $75,000; the income limit for married couples filing jointly is now $225,000, up from $150,000. There is an additional $20,000 phase out.

· In general, homes must be purchased by April 30th, 2010. According to the National Association of Realtors, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

· In the case of existing homeowner purchases, a current homeowner must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.

· The purchaser must attach documentation of their purchase to their tax record to satisfy the Anti-fraud rule. To claim the credit, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns.

What remains the same:

· First-time home buyers can receive a tax credit of up to $8000.

· To qualify, first-time buyers must not have had an interest in a principal residence for 3 years prior to purchase.

A comprehensive list of other qualifying details for first-time home buyers from the original legislation is available on prior HomeBuyingForLess posts.

If you are ready to take advantage of the extended and expanded Home Buyers Tax Credit legislation, our team of real estate experts at HomeBuyingForLess can make the process easy. You will also get a money-saving credit from us in the form of our Buyer’s Rebate!

Call us today at 1-888-201-8565.

: Steve Doyle, President and Broker-in-Charge

: Lisa Doyle

: Hill Matthews

: Lia Baras

Tags: $6500 tax credit, $8000 tax credit, first-time home buyers tax credit, Home Buyers Tax Credit, new home buyer tax credit
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What Properties Qualify for the $8000 First-Time Home Buyers Tax Credit?

September 23rd, 2009

For those who want to take advantage of the $8000 First-Time Home Buyers Tax credit before the December 1st, 2009 deadline, here are some property guidelines to consider, courtesy of the IRS .

Properties That Qualify

Qualified buyers can claim the tax credit on:

Properties that are their principal residence or ‘main home.’. A simplified definition of ‘main home’ is the one lived in most of the time. This principal residence could be a:

Single-family detached house

Townhome

Condominium

Multi-family dwelling, if it is the principal residence of the buyer

Manufactured or Mobile Home

Houseboat

Cooperative Apartment

Another requirement is that property must be located in the United States.

Also qualifying is a new home constructed by the homeowner (rather than purchased from a builder) on their own lot. This is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

Properties That Don’t Qualify

Qualified buyers cannot claim the tax credit on:

Properties acquired by gift or inheritance

Properties located outside the United States

Properties acquired from a related person. A related person includes:

A spouse

Ancestors – parents, grandparents, etc.

Lineal descendants – children, grandchildren, etc.

Properties purchased from a corporation in which you directly or indirectly own more than 50% in value of the outstanding stock of the corporation

Properties purchased from a partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest

If you would like to take advantage of the tax credit before the deadline, the real estate professionals at HomeBuyingForLess can walk you through the process. We even offer a rebate at Closing for our buyers. Call us today at 1-888-201-8565.

Tags: $8000 tax credit, Add new tag, first time home buyer, first-time home buyers tax credit
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Who Can Claim the $8000 First Time Home Buyers Tax Credit?

September 18th, 2009

The short answer to that question is qualified first time home buyers, but ‘qualified’ means more than having your finances in order. To take advantage of the American Recovery and Reinvestment Act of 2009 before the deadline, you need to know the following:

Who is eligible?
First-time home buyers purchasing a new or resale home located in the U.S. between now and December 1st, 2009 are eligible. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

For married taxpayers, both the home buyer and his or her spouse must not have owned a prior principal residence.

What if co-buyers are not married?

Unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter.

Can a buyer purchase a home from a relative and claim the tax credit?

No. You cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. IRS form 5405 also says the home cannot be acquired by gift for inheritance.

Are there any income limits for claiming the full tax credit?
Yes. The income limit for single taxpayers is $75,000. The limit for married taxpayers filing a joint return is $150,000. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. This and other information is available on the IRS and the NHBA websites.

Remember, the tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. If you’re a qualified buyer who would like to take advantage of this and other savings opportunities, the experts at HomeBuyingForLess are ready to help you find your ideal home. Call us toll-free at 1-888-201-8565.

Steve Doyle, Head Broker and CEO

Lisa Doyle

Hill Matthews

Lia Baras

Tags: $8000 tax credit, first time home buyer, first-time home buyers tax credit
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Basics of the $8000 First-Time Home Buyers Tax Credit

September 10th, 2009

As the clock ticks down on the $8000 tax credit for first-time home buyers, those who want to take advantage of this program need to move quickly. Here’s a quick overview from the National Association of Home Builders:

The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
This tax credit does not have to be repaid, as long as the buyer occupies the home for 3 years or more.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Rob Dietz, Ph.D., director of tax issues for the NAHB, discusses the tax credit in this videotaped interview:

With less than 3 months left in the program, first-time home buyers need to start the process immediately to take advantage of the savings. At HomeBuyingForLess, our licensed realtors can assist you in identifying your perfect home. Our skilled team can help you through the home buying process. HomeBuyingForLess even offers a rebate at Closing for our buyers. This can amount to thousands of dollars! Call us today - we are ready to get started!

Tags: $8000 tax credit, first time home buyer, first-time home buyers tax credit
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