A Breakdown of the Homebuyer Tax Credit

The Tennessean had a very helpful article today that breaks down the homebuyer tax credit. If you have any questions as to whether or not you qualify, or anything else relating to the credit, we are happy to help. Just email us or comment here. The article is below, or you can click here to read it on the Tennessean's web site.

Homebuyers Get Help Sorting Through Tax Credits
By Carole Feldman

If you bought a home in 2009, you could be eligible for a tax credit. Figuring out which one can be confusing. There's one credit for first-time homebuyers and another that primarily benefits homebuyers who owned a home before. But don't mix it up with the first-time homebuyer credit in 2008, which actually was a long-term loan.

There are maximum income levels and maximum sales prices. And vacation homes or rental property don't qualify. "If you want to spend two hours reading the instructions and translating them and finding out whether you qualify, yes, it's relatively simple," said Jeff Schnepper, an MSN Money tax expert and author of How to Pay Zero Taxes (McGraw-Hill $17.95).

Some questions and answers about the homebuyers tax credit:

What's the purpose of the credit?
Congress passed the tax credits in an effort to boost the struggling housing industry and fight recession. Indications are that it's had an impact. The National Association of Realtors reported that November sales of existing homes were up 44 percent from a year earlier. Although new home sales dropped in November, figures from the Commerce Department show that they're up 8 percent from the low in January 2009.

How many people are claiming the credit?
"In all, 4.4 million households are expected to claim the tax credit before it expires," Lawrence Yun, the Realtors' chief economist, said in December.

How many versions are there?
There are actually three.

The first credit, for first-time homebuyers, was really a long-term, interest-free loan that has to be paid back over 15 years. The maximum credit was $7,500 for a principal residence purchased between April 9, 2008, and June 30, 2009.

The second iteration made the first-time homebuyers credit a true credit — it doesn't have to be paid back — and raised the amount to a maximum $8,000. It applied to homes purchased between Jan. 1, 2009 and Nov. 30, 2009.

The third change extended the eligibility dates to homes purchased through April 30, 2010. It also added a credit for long-time homeowners who purchased a new residence between Nov. 7, 2009, and April 30, 2010, but at a reduced value — up to $6,500.

Do I automatically qualify if I purchased a house during those periods?
No. To qualify, the house has to be used as a primary residence. If purchased after Nov. 6, 2009, it cannot have cost more than $800,000. If you're a long-time homeowner, you had to have lived in the same house consecutively for five out of the last eight years, though you need not have lived in or owned that house at the time you buy your new home.

For homes purchased after Nov. 6, 2009, the credit also begins phasing out for individuals with modified adjusted gross incomes above $125,000, and for married couples filing jointly with incomes above $225,000.

How does the Internal Revenue Service define a principal residence?
"Your main home is the one you live in most of the time," the agency said. "It can be a house, houseboat, mobile home, cooperative apartment or condominium."

What if I'm living overseas and I buy a home there?
The home doesn't qualify unless it's in the United States.

How do I claim the credit?
There's a form, 5405, to fill out. You'll also have to submit a copy of your settlement statement, usually Form HUD-1, with the names and signatures of all parties, the property address, the sales price and date of purchase.

To avoid refund delays, the IRS recommends that longtime homeowners who purchase a new home also provide documents to show they meet the requirement for consecutive years lived in their old house. These can include mortgage interest statements, or property tax or homeowner's insurance records.

Do I have to wait until I file my 2010 taxes to claim the credit for a home purchased before the deadline in 2010?
No. "You can choose to claim the credit on your 2009 return for a home you bought in 2010 that qualifies for the credit," the IRS said.

I purchased my home in 2008 and filed for a credit on my tax returns. Do I still have to pay it back?
Yes. When Congress did away with the repayment requirement, it did not do so retroactively.

What if I purchase the property for business?
You're not eligible. The house must be used as a primary residence to qualify.

What if I want to keep my original house and use it as a rental property?
If you qualify for the credit as a long-time homeowner, nothing in the law requires you to sell the original house. However, you must make the new one your primary residence.

What if I decide to sell the house I got the credit for or convert it to a rental property?
You will have to pay back the credit if you don't keep the purchased house as your permanent residence for three years.

Introducing Germantown Station

We recently launched our newest listing: Germantown Station. This Core Development Services community is located 4th Ave N & Van Buren Street in Historic Germantown. It is just down from Germantown Cafe and City House.

Germantown Station will be 15 single-family Craftsman-style bungalows and two town homes. Prices range from $199,500 - $279,500. Completion is expected in the Fall of this year, and special pre-construction pricing is available on the next few contracts only.

Germantown Station offers incredible benefits of Green Living that lower the cost of ownership and support a sustainable lifestyle. The energy savings at Germantown Station homes will create a smaller carbon footprint, lower energy expenses, conserve natural resources, and enhance future resale value. Green features at Germantown Station include cellulose insulation, radiant barrier roofs, double glazed low-e windows, dual flush toilets, compact fluorescent lights, and Energy Star appliances.

Let us know if you'd like more information. We can send you floor plans, set up a showing of a similar home at Core's other community West End Station in Sylvan Park, or talk to you more about pricing and finishes. Email Us.

Take a photo tour of what Germantown Station will look like.

Go Green Information Seminar Tonight

You are invited to an informational seminar to learn about NES In-Home Energy Evaluations and behavioral changes that will reduce your home energy consumption. Even if you don't live in District 18, this seminar will be valuable for you.

Jim Purcell with NES will be speaking about the evaluation process, cash incentives and tax credits associated with retrofitting your home, and simple changes you can make that will save you money.

Mark Deutschmann will be speaking about the pilot program in District 18 aimed at reducing that neighborhood's energy usage by 5% at the end of 2010.

Connie Eddy with CityLife Lending will be sharing details about loan programs for retrofitting your home.

Join us at Village Real Estate's office at 2206 21st Ave S from 6-7pm TONIGHT for the seminar and wine & cheese!

Home Sales Increase for THIRD Consecutive Month

December home sales in the Greater Nashville area are continuing to show an upward trend! The fourth quarter of 2009 showed a significant increase, which is a huge improvement over the previous quarters.

According to the press release from the Greater Nashville Association of Realtors, there were 1,612 closings in December which is a 13.3% increase from the 1,422 closings in December of 2008.

Overall, the fourth quarter had 5,730 closings which is up 29.8% from the 4,413 closings in the fourth quarter of 2008. The first-time homebuyer tax credit was originally set to expire at the end of November, thus there was an increase in closings as many buyers tried to make the cut-off. However, the credit was extended so we hope to continue to see an upward trend in coming months.

Overall, there were 12.6% less closings in 2009 than 2008 though. The first three quarters of 2009 greatly affected these numbers.

Lucy Smith, the 2010 President of the Greater Nashville Association of Realtors, said that "the significant increase in closings during December and the very positive trend for all of the fourth quarter are both encouraging signs for real estate in this region. There is no questions that the first-time homebuyer tax credit had a major impact. As a result of the tax credit being extended and expanded, we anticipate positive trends possibly including more move-up activity in the months ahead."

She went on to say that "home prices have stabilized, which is a positive sign, and condominium prices are actually up more than 11% - certainly encouraging in light of the overall real estate trends of the recent past. It bears noting that at mid-year of 2009 we were virtually 30% behind the previous year. While no one is claiming that all the economic issues have been resolved, we have made some meaningful progress and this is certainly the kind of news we welcome as we begin a new year."

The CityLiving Team has certainly seen signs that the market is continuing to show growth. We have had an enormous amount of activity just in the past month. We put a home on the market right before Christmas for $1.26 million in the Otter Creek area, and had a contract within a week. We also received contracts on homes in the 12South and Belmont-Hillsboro neighborhoods listed at $799,900 and $674,900. Details about these urban Nashville resale homes.

You can read the full GNAR press release here.

East Nashville Listed Among Best Comeback Neighborhoods

From yesterday's Tennessean...

The January edition of Southern Living magazine names East Nashville one of the 10 best comeback neighborhoods in the South.

In a statement released last week, Southern Living's editors said they scoured the South in search of neighborhoods that were "once down on their luck but are now resurging with community pride."

The magazine distinguished between the kind of garden-variety gentrification that includes property changing hands and homes being remodeled and the brand of makeover that the magazine says distinguishes East Nashville.

East Nashville is among 10 Southern neighborhoods where the property transfers and transformations are coupled with a resident-driven effort to rebuild the "soul" of the community.

Read the Tennessean article here.

Go Green, District 18 Update

We have 93 neighbors in District 18 signed up for In-Home Energy Evaluations and 15 businesses signed up for commercial evaluations. This is great progress towards our goal of 360 homes and 36 businesses.

However, we are tracking those homes & businesses that upon having the evaluation make recommended changes within the 90 day window to obtain the financial reimbursements and incentives. Only FOUR homes have made the necessary updates! We are working to plan and implement a follow-up program to encourage homes that have signed up to take the next step. This is the critical piece that will ultimately have an effect on District 18's energy consumption, and help reach the true goal of the campaign which is to reduce District 18's energy usage by 5% by the end of this year.

We'll keep you updated on our progress...until then, help spread the word!

Updates to our Urban Neighborhoods

I enjoyed this article from today's Davidson AM in the Tennessean. It lays out some nice improvements taking place in the coming year around urban Nashville. Check it out.

Reflections on 2009

Dear CityLiving Supporters,

It has been a challenging year, but we’ve come towards the end of 2009 with much to celebrate. The CityLiving Team has 442 sales through December 15th. It’s not the 500 sales that we had hoped for, but not bad, considering.

Newell and Mark, the resale listing team, accounted for 56 home sales of mostly tudors, bungalows and foursquares in 37212, 37204 and 37206. We end the year with 25 fantastic listings, two of which we’ve just received contracts on. We just listed a beautiful $1.26 million home on Sewanee Road off Granny White and have a lot of pending activity which will take us into the new year. We feel very good about our listing team, and have a lot of buyer broker support on our team to help our clients find their place, as we say at Village.

The CityLiving Team has sold many great projects this year, some of which were quite popular.

Icon in the Gulch has had great momentum and success in sales in 2009, and has proven to be the best of all the condo towers due in part to its prominent location in the ever-growing Gulch. Our team has closed almost 80 condos at Icon, all new sales in 2009.

We have closed the first 20 sales at Velocity in the Gulch. We have great price points, with lots of condos priced under $200,000, and we are poised to be the project for first time homebuyers this Spring.

We are sold out at West End Station, a Core Development Services community in Sylvan Park of 45 single-family bungalows and cottages. The final touches on the project will come in the next couple months, and we will close out the two remaining homes early in the new year. I encourage you to drive through this community at 36th and Nebraska to see the wonderful work Core has done. Core hopes to create more communities like West End Station in the future.

The Lofts at Werthan Mills - Phase IV sold through an additional 22 lofts this year, nearly closing out the largest phase at this wonderful conversion of the old bag factory. Of the original 120 lofts in Phase IV, we have only three left to sell and then we’ll be on to the final phase. This project is close to my heart as it was the first project started by Core Development.

The Glen in Hillsboro Village was also a huge success. We sold the last of 38 units in June.

We worked hard with banks to bring 5th & Main back out to the community, knowing that this was the best option for this distressed project. We convinced the bank to let us sell this project out from foreclosure by working with Freeman Webb to ensure total completion and implementing an official homeowner’s association. We are pleased to announce that we have 55 contracts, and hope to have continued success selling through all 129 homes in the coming year.

Construction of Rhythm at Music Row was completed this year and we started to close units in the Spring. We have been selling about three condos per month, and look forward to selling out this boutique high rise in 2010.

Casey Zolezzi, a Buyer Broker on the CityLiving Team, worked on Werthan Lofts and West End Station. He also did a great job at Spence Enclave, where we sold 22 townhomes at very affordable prices.

We are thrilled to announce the return of Marilyn Martin to the CityLiving Team! She took a hiatus to work on her music, but rejoins the team for some great work with buyers in 2010.

CityLife Lending Group had another successful year. We believe that having them located in our Hillsboro Village office adds significant value for our clients. In 2009, CityLife Lending was ranked the 19th highest producing branch in overall volume by the Nashville Business Journal. This ranking factored in all banks, mortgage brokers, and mortgage bankers throughout Davidson County.

Our top charitable endeavor this year is certainly Go Green, District 18. We launched this campaign on November 2nd with Mayor Dean and Councilwoman Kristine LaLonde. The campaign’s goal is to reduce District 18’s energy usage by 5% by the end of 2010. We hope to have 360 neighbors and 36 businesses undergo NES In-Home Energy Evaluations and retrofit their homes and buildings.

We have 95 homes signed up, as well as over 10 businesses, including The Belcourt, FIDO, Tin Angel, Sunset Grill, Rudy Title & Escrow, Cabana and Littlejohn Engineering. Erica Tober, who essentially runs our team, has been invaluable in promoting this campaign. Neighborhood leaders in Belmont Hillsboro and Hillsboro West End are taking up the cause, and we will hope to challenge other neighborhoods to also go green. Our goals seems within reach!

We appreciate your continued support of The CityLiving Team, and would love your referrals in the coming year. Please call or email me if you know of anyone we can help with their real estate needs.

Cheers,
Mark