Buy a House Fast

The sky is falling, the sky is falling!

So said Chicken Little, as he concluded an acorn fell on his head.  He convinced his friends he was right, and the group ran off to tell the king of the impending disaster.  They were tricked by a sly fox who directed them to his den, where he ate them all for lunch.

As the final days of the Home Buyer’s Tax Credit tick away, thousands of potential home owners are letting $6500 or $8000 slip away from them because they fear the sky is falling –or potentially could. Buying a home is a big commitment that requires careful planning, but if you are holding off on homeownership, are your reasons legitimate or are you acting a little like Chicken Little?  Are you so convinced that the worst case scenario will befall you that you are hesitant to make the move to get a house under contract by April 30?  Is something else going on?

How stable is your job? You may have honestly told the lender about your current finances but do you secretly fear a layoff or a change in income?

Do you fear too much debt? If you have been approved for more than you feel comfortable with, there is no requirement that you buy more house than you feel comfortable paying for.

If you are buying a home with a spouse or partner, do you want to be tied into a real estate deal with them? Buying real estate implies a level of commitment you might not want to make.

Are you afraid you will make a bad investment, given the last year or so of falling home prices?

If you take a look at things and determine that you aren’t ready to move, fine – there will still be homes available after April 30.  However, you can take some steps to assure yourself that you are making a good decision to buy:

Consider the whole picture.  Aside from credit, housing prices are low and so are interest rates.

Stay well below what the bank says you can afford.

Put as much down as you can, but not so much that you use all your reserves. Getting an FHA loan rather than a conventional one can help you preserve some cash for an emergency fund.

If you are concerned about your relationship, work with an attorney to set up the deal in a way that will preserve the interests of both of you.

Anticipate an exit strategy if you have to sell.

Chicken Little would have met a different fate had he assessed his circumstances accurately.  No one can predict the future, but you can ensure yours as a happy homeowner if you do.

Express Realty Services specializes in finding affordable homes for residents of DC, eastern Maryland, and northern Virginia.  Act now to take advantage of the Home Buyers Tax credit.  Just call us at 888-306-9450 or visit our website to chat with a representative about how to get started.

Did you buy a home last year or are you are planning to buy now?  Either way, there are some important things to remember about the home buyer tax credit.

What You Might Know

• The credit applies to you if are a first time buyer or a repeat buyer.  You are considered a first-timer if you have not owned a home in 3 years. First timers can qualify for up to $8,000, while repeat buyers can receive up to $6,500.
• You must have a signed sales contract by April 30 and have your closing on the property by June 30 in order to claim the credit (If you are in the military or foreign service, you have an extra year).
• The home you buy must be your principal residence. If you are a repeat buyer, you don’t have to sell your old home, but you can rent it out or turn it into a second home while using your new home as you primary home.

For a complete summary of all criteria, see the official site.

What You May Not Know

• Unless you applied all or part of your credit to your down payment or closing costs, you will receive your funds after you have filed your taxes.
• To claim the credit, you must submit a copy of the HUD-1 settlement statement and IRS Form 5405 to claim either the first-time home buyer tax credit or the repeat home buyer tax credit.
• You can claim your refund with your 2009 return, amend it if you have already filed, or save it for your 2010 return.
• To claim the credit, you cannot E-file. You must mail a paper return because you have to send some supporting documentation (proof of residency, a signed mortgage statement and drivers license) along with the return.  If you use online tax software like TaxAct, you can use their forms but still must print them out and mail your tax return to the IRS.
• It may take up to four months to receive your refund.

Before you blast the IRS for gross inefficiency and inflicting mental cruelty, blame your fellow citizens who tried to scam the government. The rules were changed with the November 6, 2009 extension to prevent fraud.

Despite the wait, the money is a good incentive to buy a home. Express Realty Services has a great selection of pre-owned homes in the greater DC area. Visit our website to find your next home in Maryland, Virginia, or DC.  Many are newly renovated and ready for you.