In writing my blog a few days ago, I forgot to mention that there is a tax credit that will apply to first time home buyers who buy a home between now & June 30, 2009. The total amount a person may be eligible for is $7,500. The eligibility is dependent upon income. This is a great article from the National Association of Realtors (NAR) that demonstrates the credit.
The tax credit was designed to try and jump start the real estate market, as well as clearing out of unsold inventory. The government figures that now, more than ever- first time home buyers need to have an incentive to buy in today's market. The way it works is simple. Buy a house now (any house will do!). It can be new or existing. It can be in any location, in any condition. The stipulation to qualify for the tax credit is that it must be your first home, or you must not have owned a home for the last three years, and you must promise to live in the home (owner occupied). The IRS will deduct $7,500 from your tax bill (if filing jointly), or $3,500 minimum as an individual filer. You may qualify for the entire amount if you're filing individually if your income is less than $75,000 per year.
If you already own a home, sorry- you don't qualify for this tax credit. But if you sold your house and have been renting (instead of owning a home) for at least three years, you do qualify. This is essentially like a loan, that you will be required to pay back over time. Starting in the second year, and continuing through the 15th year it must be paid back. This amounts to $500 per year if you keep it for 15 years. If you sell before the end of 15 years and have no gain on the sale, you will not be expected to pay it back.
If you've been thinking of buying a home in Tucson, please don't hesitate to call me for the details of this great incentive! Please give me a call if you're thinking of buying or selling a home in Tucson.
Written by Sarah Ley,
BSBA, ABR, CRS, CNHSA
Realtor with Long Realty Company
Direct: (520) 404-0544
http://www.sarahley.longrealty.com/
sley@longrealty.com
Friday, August 15, 2008
Wednesday, August 13, 2008
Selling your Tucson Home in August 2008
Have you recently thought about selling your Tucson home? Unless you've had your head in the sand for the last eight months of the year, 2008 has been an interesting year (to say the least) for sellers and want to be sellers. It's the school of hard knocks & price drops... Here's a story for all of you tenacious sellers out there in the Tucson real estate market place. Even real estate agents are feeling the brunt of this market. Read my story!
I'm writing this post sort of tongue-in-cheek, as last week, a two story house across the street from a rental property that I own got struck by lightning & burned to the ground. "It's a total loss," I was told by the insurance adjuster who called me to try & locate the owner of that house! If I don't laugh about this, I will surely end up crying over it. Mind you, I bought the house at the market's peak in 2005, and like so many other would be sellers out there, I have seen its value sink faster than Michael Phelps' competition in the last six months. I attribute the decline mostly to a boat load of foreclosures in the neighborhood. I had the house on the market for four months of this year (before my tenant moved out in the end of July). The entire time it was listed, I only had one agent from Long Realty (thankfully) show the house! I know it's hard to show a house that's occupied by a tenant, but at the same time, it's also very difficult to compete with bank owned properties that end up selling for $40,000 less than what I was trying to sell mine for.
I decided that I am not ready to take a bath in the sale of my rental home. Like many of the sellers out there- I don't have to sell. So it made the most sense to take it off the market and set about finding a new tenant for it. That hasn't been an easy task, especially when in addition to the property values sinking, now the house across the street from me got struck by lightning & burned to the ground! I know I keep bringing that up, but it just seems to drive home the drama of what we home sellers and real estate agents face in today's challenging real estate market. The ironic thing was that that house was one of the ones trying to sell as a short sale before the lender foreclosed on it. Talk about a quagmire! I'm still scratching my head wondering whose insurance is going to pay the cost of re-building this house. Will it be the lender who was ready to foreclose and take it back from the buyer, or will it be the home owner who had no equity to begin with? Obviously the home owner has already walked away from the house, as the insurance adjuster couldn't figure out how to get ahold of him. I had to give the insurance adjuster the name of this guy's real estate company. I actually knew the agent who had it listed, so I called her to tell her & she said that the insurance adjuster had already called her. It looks like the lender is just taking the property back from the seller now. Talk about damaged goods!
So, I post & I re-post the rental every five days or so on craigslist. I get calls daily from the sign. Overall, I've had a lot of inquiries about the house, but it seems like every homeowner in Tucson who was in the same situation as me (not wanting to take a loss on the sale of their home) is now trying to rent the home instead of selling it! Wow, there are a lot of rentals in Tucson to choose from. I think this is only going to stall the real estate market from recovery an even longer time. Honestly, what incentive do people have to buy a home when they can rent one for a lot less (without any of the financial or otherwise burdensome obligations of home ownership). And can you blame them? It's a daily media storm of articles saying, "The real estate market has further to fall." Or, "It's harder than ever to qualify for a mortgage now that we are 'in a recession in Arizona' and banks have been hit hard by the wave of foreclosures."
Buyers, I make a living facilitating real estate transactions, and I have to admit, I don't blame you for showing some cautionary restraint- and maybe even not wanting to buy a house in Tucson at the moment. Buying is a good thing to do, and it makes clear financial sense in my opinion (even in a down real estate market) if you plan to 1) put a decent down payment, 2) live in the house, 3) not see it as an investment, but a roof over your head, and 4) plan to own it for at least five years. Obviously, there are still real estate investors out there, and thankfully bank owned properties are quite enticing to skilled real estate investors who have the stomach for them. Many of the deals being offered by banks are at huge cut-rate prices, some up to 30% less than what they were selling for even a year ago. These houses need work and are "As-Is" sales, so you have to roll up your sleeves (or have a great handyman) if you're going to pursue this type of property. But it is appealing to many investors, as finally some of these houses actually can have a positive cash flow.
This post was supposed to be about selling your Tucson home, so I've got to address that issue. Let's see, here are my 'words of wisdom' for prospective home sellers in Tucson in August 2008. Don't sell right now unless you 1) are highly motivated, 2) have to move, and 3) have the patience to keep your house in top showing condition & priced right for the market. Yes, it can be a test of wills, but if you have the desire, the need, and the strength of a good Realtor- you can definitely sell in this market, in any market. I have sold three houses in the past month, so I know it can be done. Please give me a call if you would like a complimentary review of your home's value in today's market- aspirin not included!
Written by Sarah Ley,
BSBA, ABR, CRS, CNHSA
Tucson, AZ Realtor with
Long Realty Company
Direct: (520) 404-0544
http://www.sarahley.longrealty.com/
sley@longrealty.com
I'm writing this post sort of tongue-in-cheek, as last week, a two story house across the street from a rental property that I own got struck by lightning & burned to the ground. "It's a total loss," I was told by the insurance adjuster who called me to try & locate the owner of that house! If I don't laugh about this, I will surely end up crying over it. Mind you, I bought the house at the market's peak in 2005, and like so many other would be sellers out there, I have seen its value sink faster than Michael Phelps' competition in the last six months. I attribute the decline mostly to a boat load of foreclosures in the neighborhood. I had the house on the market for four months of this year (before my tenant moved out in the end of July). The entire time it was listed, I only had one agent from Long Realty (thankfully) show the house! I know it's hard to show a house that's occupied by a tenant, but at the same time, it's also very difficult to compete with bank owned properties that end up selling for $40,000 less than what I was trying to sell mine for.
I decided that I am not ready to take a bath in the sale of my rental home. Like many of the sellers out there- I don't have to sell. So it made the most sense to take it off the market and set about finding a new tenant for it. That hasn't been an easy task, especially when in addition to the property values sinking, now the house across the street from me got struck by lightning & burned to the ground! I know I keep bringing that up, but it just seems to drive home the drama of what we home sellers and real estate agents face in today's challenging real estate market. The ironic thing was that that house was one of the ones trying to sell as a short sale before the lender foreclosed on it. Talk about a quagmire! I'm still scratching my head wondering whose insurance is going to pay the cost of re-building this house. Will it be the lender who was ready to foreclose and take it back from the buyer, or will it be the home owner who had no equity to begin with? Obviously the home owner has already walked away from the house, as the insurance adjuster couldn't figure out how to get ahold of him. I had to give the insurance adjuster the name of this guy's real estate company. I actually knew the agent who had it listed, so I called her to tell her & she said that the insurance adjuster had already called her. It looks like the lender is just taking the property back from the seller now. Talk about damaged goods!
So, I post & I re-post the rental every five days or so on craigslist. I get calls daily from the sign. Overall, I've had a lot of inquiries about the house, but it seems like every homeowner in Tucson who was in the same situation as me (not wanting to take a loss on the sale of their home) is now trying to rent the home instead of selling it! Wow, there are a lot of rentals in Tucson to choose from. I think this is only going to stall the real estate market from recovery an even longer time. Honestly, what incentive do people have to buy a home when they can rent one for a lot less (without any of the financial or otherwise burdensome obligations of home ownership). And can you blame them? It's a daily media storm of articles saying, "The real estate market has further to fall." Or, "It's harder than ever to qualify for a mortgage now that we are 'in a recession in Arizona' and banks have been hit hard by the wave of foreclosures."
Buyers, I make a living facilitating real estate transactions, and I have to admit, I don't blame you for showing some cautionary restraint- and maybe even not wanting to buy a house in Tucson at the moment. Buying is a good thing to do, and it makes clear financial sense in my opinion (even in a down real estate market) if you plan to 1) put a decent down payment, 2) live in the house, 3) not see it as an investment, but a roof over your head, and 4) plan to own it for at least five years. Obviously, there are still real estate investors out there, and thankfully bank owned properties are quite enticing to skilled real estate investors who have the stomach for them. Many of the deals being offered by banks are at huge cut-rate prices, some up to 30% less than what they were selling for even a year ago. These houses need work and are "As-Is" sales, so you have to roll up your sleeves (or have a great handyman) if you're going to pursue this type of property. But it is appealing to many investors, as finally some of these houses actually can have a positive cash flow.
This post was supposed to be about selling your Tucson home, so I've got to address that issue. Let's see, here are my 'words of wisdom' for prospective home sellers in Tucson in August 2008. Don't sell right now unless you 1) are highly motivated, 2) have to move, and 3) have the patience to keep your house in top showing condition & priced right for the market. Yes, it can be a test of wills, but if you have the desire, the need, and the strength of a good Realtor- you can definitely sell in this market, in any market. I have sold three houses in the past month, so I know it can be done. Please give me a call if you would like a complimentary review of your home's value in today's market- aspirin not included!
Written by Sarah Ley,
BSBA, ABR, CRS, CNHSA
Tucson, AZ Realtor with
Long Realty Company
Direct: (520) 404-0544
http://www.sarahley.longrealty.com/
sley@longrealty.com
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