Main Line Homes Blog

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So where are prices going in Tredyffrin Easttown now?

With the new stimulus bill having been signed into law what effect is it likely to have on our home prices in Tredyffrin Easttown School district? Many agents are seeing increased activity among first time home buyers throughout the country and this is reflected locally as well. This being a more built up area our first time home buyers find it harder to afford homes in this district but Chesterbrook, Drummers Lane, Old Forge Crossing and Devon Green offer good alternatives for many first time buyers looking for smaller homes and willing to live in condo or home owner association developments with alternatives of one, two or three bedroom homes. There are also several twins and smaller single family homes available as well.

What needs to be realized is that many banks have tightened their qualifications and this is causing many to believe that they cannot obtain financing. Many buyers are challenged finding finance, but there are several different alternatives including FHA loans that require only 3.5% for down payments and closing costs can be paid through a sellers assist as well. Feel free to contact us to find help, we have lots of sources for finance, including loans that will alow you to do repairs and renovations where necessary.

So as these first time buyers find homes and make purchases this will filter through the market allowing sellers who need to sell first to move up. This may take time to filter through but it will eventually happen.

So how is this going to affect home prices? Currently the financial stress has caused prices to drop in some areas of the school district by as much as 25-30% over 2007 prices and sometimes even 2005 prices. We have seen many homes selling for less than they sold as far back as 2005. Prices have dropped, this will slowly stabalize that drop and many believe that we are close to bottom but prices will not rise for probably the next two years at least. What is important for the banks to maintain and even increase their lending. Whilst their criteria was very loose for several years now these criteria are too tight choking finance, as confidence returns these criteria will improve allowing funds to flow.

What about foreclosures? Our area has been relatively free of foreclosures, but this does not mean that there are not distressed sales in our area that have also affected prices in general and affect buyers attitude as well. As buyers begin to realize that there are less foreclosures in our area they are more prepared to move ahead. But whilst local companies have not been laying off large numbers of staff there has been some cutting back and this has created a nervousness among buyers who are holding back from purchasing a home out of fear of the future. So once again we need to see buyer and consumer confidence to rise for us to see consumers purchasing homes, removing excess inventory and prices rise as inventory drops.

For information on a specific development or home contact us to get a free market analysis that covers nine or ten points in selecting a price point for your home so it will sell quickly and for as much as possible.

0 comments • Nick & Trudy Vandekar • February 26 2009 09:57AM

Top 21 Questions Answered on the $8,000 Tax Credit for 1st Time Home Buyers

This is a really good blog on the $8,000 tax credit for 1st gime home buyers. It answers all your questions, so read away and if you should happen to have a question this does not answer contact me.

Via Gwenn Tanvas - Wisconsin FHA, VA Specialists (Gwenn Tanvas Patriot Mortgage Services, Inc):

The dust is settling, the ink has dried and the phones are beginning to ring. Yahoooooooooo! Spring is right around the corner and what a great home buying season 2009 will be. The opportunities for first-time home buyers are huge. As long the home purchase is complete by December 1, 2009 and the new buyer meets the criteria of the plan, they will get the EIGHT GRAND!

In the past week, there have been so many questions regarding the tax credit. As the result, I went on a mission to find the best information on the the most commonly asked questions. The results are below and definitely worth the read -

  1. Who is eligible to claim the tax credit?
    First-time home buyers purchasing any kind of single family home-new or resale-are eligible for the tax credit. To qualify for the tax credit, the new buyer must purchase the on or after January 1, 2009 and before December 1, 2009. 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.
  2. 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, the law tests the home-ownership history of both the home buyer and his/her spouse.

    For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, 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. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
  3. How is the amount of the tax credit determined?
    The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.
  4. Are there any income limits for claiming the tax credit?
    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. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
  5. What is "modified adjusted gross income"?
    Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

    To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
  6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
    Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
  7. Can you give me an example of how the partial tax credit is determined?
    Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

    Here's another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

    Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
  8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
    The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
  9. How do I claim the tax credit? Do I need to complete a form or application?
    Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
  10. What types of homes will qualify for the tax credit?
    Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
  11. I read that the tax credit is "refundable." What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

    For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
  12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
    Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax adviser to ensure you file this return properly.
  13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
    Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner 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.

    In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
  14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may notclaim the tax credit if they are participating in an MRB program.
  15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
    No. You can claim only one.
  16. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
  17. Is a tax credit the same as a tax deduction?
    No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

    A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer's tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
  18. I bought a home in 2008. Do I qualify for this credit?
    No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit.
  19. Is there any way for a home buyer to access the money allocatable to the credit sooner than waiting to file their 2009 tax return?
    Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down-payment.

    Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

    Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a down-payment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
  20. If I'm qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

    Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
  21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

information source - NHBA - Bank Rate - IRS

Gwenn Tanvas is a Certified Mortgage Planning Specialists who specializes in Government Programs such as FHA, State and Federal VA and USDA Rural Housing Loans. Visit her website for more information, on-line calculators and a secure on-line application. She is able to assist with transaction throughout the state of Wisconsin. Her offices are located in Appleton, Oshkosh and Green Bay and offers the convenience of one-stop shopping. http://www.WisconsinLoanTips.com or http://www.MortgageProsOfWisconsin.com she can also be reached for comment or to answer questions via email at gwennt@centurytel.net

 

0 comments • Nick & Trudy Vandekar • February 24 2009 07:29AM

Whoa before you use that contractor!

Contractor

 

In about five months you will be able to check out that contractor you are going to allow loose in or on your home. The new PA Home Improvement Consumer Protection Act of 2008 will go into effect. It will apply to just about any contractor doing work inside or outside a residence. All contractors will have to register with the State and provide personal and company information to obtain a state registration number. Their contracts with consumers will have to contain certain provisions relative to insurance coverage amounts, amount of any deposit, specific address of the contractor, billing procedures etc. In addition the registration number will have to appear on all estimates, advertising, invoices and contracts.

So you can now have a better picture of that contractor and his professionalism whether he is doing roofing, landscape improvements, painting, carpentry, electrical or heating and air conditioning. Local registration is no longer good enough, make sure you ask for his State registration details as well. But remember this won't go into effect for about another five months.

4 comments • Nick & Trudy Vandekar • February 11 2009 11:49AM

Tredyffrin and Easttown Townships Real Estate market recent stats

Last week we held a seminar at Easttown Library at which we covered some recent market stats for Tredyffrin and Easttown Township homes.

There are currently 140 homes on the market priced between $350,000 and $1.5 million. Average price of these listings is $691,238. The average days on market to sell a home last month were 106. That means that of all the homes sold in January the average time it took was 106 days. there are currently about 32 homes selling a month in the two townships so it will take about 4 months to sell the current inventory if no other homes are listed. And over the last 12 months there were 148 homes that did not sell and their listings either were withdrawn or expired without being relisted.

Now each market segment will vary by price segment and if you would like more detailed stats relative to your own home or a home you are considering purchasing please contact us.

Overall we have seen prices ease in our area, but homes are selling when priced correctly. There are buyers out looking spurred on by the low interest rates but they really need motivation to act and take the next step. Homes need to be in good condition, with updated bathrooms and kitchen, adjusting the price for older kitchens and baths is not causing buyers to move. Further buyers are being selective following home inspections, so maintenance is important as well. This all being said we are having success with homes selling and reaching settlement.

0 comments • Nick & Trudy Vandekar • February 11 2009 11:00AM

Is the stimulus bill going to revive real estate?

Whilst we hear all the talk from Congress that they understand real estate needs to lead the way for jolting the economy I wonder if tax credits and hand outs are going to do the job. we currently have historic low interest rates that should be encouraging buyers to act and not wait but we are seeing buyers just looking and taking no action to buy inventory that sellers are desperate to sell.

Also how fair are the credits, if you have recently lost a job and need to sell a home are you going to be able to buy something else or are you going to rent? So do the credits benefit the wealthier members of society and harm those that really need help?

Would a plan that revamps the mortgage mess, taking out of the mix those homes that are behind and re-arrange the mortgages with lower rates for those in trouble keeping people in their homes not be better. Is this the best use of the funds available? As Realtors we should be making sure homes are affordable, secure for those who have invested in them and not just pushing a bill that rewards those who can buy now and take advantage of the mess that the country is currently experiencing.

These are simply my thoughts that I am kicking around in my head, so weigh in and say what you think. I am always open to new ideas and am a great believer in keeping it simple.

3 comments • Nick & Trudy Vandekar • February 10 2009 03:15PM

Seminar Friday Feb 6th Achieving Success selling your home in a buyers' market

This Friday as part of the First Friday events in Berwyn, PA supported by the Berwyn Devon Business and Professional Association I am holding a seminar together with Kathy Scipione from our Long and Foster Devon office and Linda Sticklin of Home Staging and Organizing.

This is a free community seminar to be held at Easttown Library from 5 to 6 PM and will touch on Staging your home for sale both decoratively and financially and cover issues such as the questions you should ask before hiring a Realtor to sell your home, local market trends, does advertising work and why it is important to price your home correctly from the beginning.

We look forward to meeting you there and hope you can attend. Easttown Library is located on First Avenue in Berwyn, PA. So why not attend the seminar and then go out for dinner in the village at one of our many restaurants and attend some of the other events taking place for First Friday in Berwyn.

0 comments • Nick & Trudy Vandekar • February 04 2009 04:33PM

Great shop front in Berwyn, PA

 

Lancaster Avenue shop front

We just listed a small shop or office location right on Lancaster Ave in the heart of Berwyn Village. About 760 sq feet this would make a wonderful small boutique or coffee shop. Rent is very reasonable and the location could not be better being very close to the station and surrounded by restaurants and other retail.

If you know where Berwyn Hardware is located this is almost next door, The Art Conservatory is next door and Fritz Lumber is right across the road. It has two large windows in the front as you can see, great so your customers can see what you are selling and used to be a clock repair shop. Now the opportunity is yours to make it what you want it to be. It has bilko doors at the back for rear loading, and would make a great little antique store or something similar like a shop selling handbags and jewelry or even a flower shop. The opportunites and uses are endless. There is also parking in the rear if needed and thirty minute parking right out front.

As President of the Berwyn Devon Business and Professional Association I will also give one years free membership to what ever business or professional who rents this location so you can get involved right away in the community.

0 comments • Nick & Trudy Vandekar • February 02 2009 10:26AM