Previous Provisions	New Provisions
Effective Date	January 1, 2009	November 7, 2009
Deadline	Close before December 1, 2009	Contract signed before May 1, 2010, must close before July 1, 2010 Members of the uniformed services, foreign services, and intelligence employees who served an extended service of 90 days will have until April 30, 2011 and June 30, 2011.
Amount	First-Timers: maximum of $8,000 or 10% of sales price Prior Owners: $0	First-Timers: Unchanged Prior Owners: $6,500 if lived in prior home for at least 5 consecutive years of past 8 years
Income Limit	Individual: $75,000 Couple: $150,000	Individual: $125,000 Couple: $225,000
Other Restrictions	Home must be primary residence for at least 3 years. If home is sold or buyer moves before 3 years, must re-pay full $8,000.	Buyer must be at least 18 years old and not classified as a dependent for tax purposes Home must cost less than $800,000 Home must be primary residence for at least 3 years. If home is sold or buyer moves, before 3 years, must re-pay full amount of credit. Exception for military, foreign services, or intelligence with extended 90 days service overseas.
How to claim	If purchased in 2009, by amending 2009 tax return or claiming on 2010 tax return	If purchased in 2010, by amending 2010 tax return or claiming on 2011 tax return

 

Earlier this year, KW Research conducted a study of first time-buyers and here’s a few of the findings:

1. The median age was 28, significantly down from where it was four years ago at 32.
2. Location or Neighborhood was the No. 1 “must-have” for 36% of buyers.
3. 25% saw 5 or less homes before writing an offer, the average buyer saw 10 homes.
4. 2 out of 5 first-time buyers purchased a distressed property.
5. 2 out of 3 sellers paid at least part of the buyer’s closing costs.
6. 1 in 4 had help from their family for the down payment.

If you’re interested in learning more about the new tax credit or about homes in your area, give us a call today.

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Realisation Staircase
This modern staircase was made from a 10mm thick metal sheet. Each of the adjoining steps is connected with a slanting external side beam that forms a bracket attached to the wall. With a concept of a delicate rippling ribbon is definitely one of the most unique and thinnest staircases ever seen. It was created by HSH and it is now in one the contemporary houses in Liben, Prague. Although this original piece might look fragile, each of its brackets is constructed as a firm frame, so it is sturdy enough to carry weights.

(Link | Photo)

Slide Staircase

This creative slide next to the staircase was designed by London architect Alex Michaelis at the request of his children. Not only it adds originality but a lot of fun to their new eco-friendly dream home. In the picture, one of the children throwing caution to the wind and diving head first down the slide. According to Michaelis even grown-ups can’t resist skipping the stairs. “We’ve been known after a big dinner party to use the slide”, he said. Creativity, originality and fun, what a perfect combination! (Link)

Suspended Staircase

Now, that is an awesome staircase! These original “floating” stairs were designed by Florence architect Guido Ciompi for The Gray Hotel in Milan, Italy.Thumbs up for the designer! (Link)

Samlot Staircase

From the looks of these stairs, created by Spanish designer Jordi Vayreda, you might think only cats could make it to the top. They certainly don’t look like they’d support the weight of a human. But, Vayreda confirms that they can support 200 kilograms (over 440 pounds). “Steel is the material which we use to construct the staircases, 100 mm thick and each of them is welded to a 250 mm thick beam.” (Link)

Glass Staircase

Check out these glass stairs. Forget about scuff marks and smudges, these are so cool! (Link)

Staircase at XXS House

What is so special about this staircase? Well, the design required remarkably little material and still functions as a regular set of stairs. It was created by Architect Dekleva Gregoric’s for an eXtra-eXtra-Small house located in a little historic town in Slovenia. Its dimensions were dictated by law to fall within the measurements of the preexisting house on the site, leaving just 43m-sq (approx 460ft-sq) of potential space. If good things come in small packages, then the XXS house is as good as it gets! (Link)

Bookshelf Staircase

This “secret’ staircase” belongs to a London Victorian apartment, where it is hidden from the main reception room, to access a new loft bedroom lit by roof lights. It was designed by Tom Sloan at Levitate Architects, who came up with a neat solution to a storage problem . (Link)

Floating Staircase

Those two amazing sets of stairs are from the Didden Village project by Dutch architectural firm MVRDV. The project itself is a rooftop addition in Rotterdam, Netherlands. (Link)

Space-saving Staircase

These steep and narrow stairs occupy a space hardly bigger than a closet, and were made of economical pine boxes. When designing it, creative Swedish architects at Stockholm-based TAF Architect Office, went for both an aesthetically pleasing and affordable creation. (Link)

Rolling Staircase

This spiral staircase appears to lead to nowhere as it was installed as a part of Milan’s exposition aimed to show that decor objects can be artworks.The ‘Rolling’, designed by Roberto Semprini for Edilco, draws inspiration from the ergonomic forms of natural rocks smoothed by water. The stairs look like giant river stones, but they are actually concrete blocks polished to perfection. (Link)

Hanging Staircase

Take a look at these treads that don’t even touch. Anglo-Canadian architects Christopher Blencowe and Judith Levine seem to have taken the phrase “tread lightly” literally with this design. This really looks like an interesting solution to a standard problem in renovations and additions. Doesn’t it? (Link)

Foldable Staircase

This originality was thought not only as a foldable staircase but as a ‘redefined door’. According to its creator, industrial designer Aaron Tang, it is “an element of a wall that allowed passageway to another environment when opened and restricted passageway when closed”. Using just hinges and pistons, thestaircase can fold up a wall to expand space on the lower level or restrict access to the upper level. It was designed to be closed or opened from upstairs and downstairs. (Link)

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Our Loan Officer Jim Greenie of TriStone Financial provided us with the following update.

First Time Homebuyer Tax Credit Extended Into 2010!
Plus…A New Tax Credit for Certain Existing Home Owners!

 

It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

 

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

 

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

 

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

 

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

 

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

 

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

 

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

 

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

 

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

 

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

 

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

 

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

 

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

 

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

 

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

 

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

 

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

 

• You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
• You do not use the home as your principal residence.
• You sell your home before the end of the year.
• You are a nonresident alien.
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

 

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

 

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA. Contact Jim if you have ANY questions about the tax credit.

Jim Greenie
Principal/Mortgage Planner
TriStone Financial
Phone: (678)336-5060
Fax: (678)336-5160
jgreenie@tristonefinancial.com

www.tristonefinancial.com

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1. Who is eligible to claim the $6,500 tax credit?
   Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
2. What is the definition of a move-up or repeat home buyer?
   The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
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 $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
4. Are there any income limits for claiming the tax credit?
   Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (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 the 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 of foreign-earned income. See IRS Form 5405 for more details.
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 $6,500 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 $235,000. The applicable phaseout to qualify for the tax credit is $225,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $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 $6,500 by 0.5. The result is $3,250.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $138,000. The buyer’s income exceeds $125,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $6,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,275.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? How is this different than the rules established in early 2009?
   The previous tax credits applied only to first-time home buyers and were for different amounts of money.
9. How do I claim the tax credit? Do I need to complete a form or application? Are there documentation requirements?
   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 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns).No other applications 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 repeat home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to Form 5405 as proof of the completed home purchase.
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, provided the home is purchased for a price less than or equal to $800,000. 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.It is important to note that you cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members. Please consult with your tax advisor for more information. Also see IRS Form 5405.
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 $6,500 home buyer tax credit. As a result, the taxpayer would receive a check for $5,500 ($6,500 minus the $1,000 owed).
12. 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 after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date. Be sure to check with a tax advisor in cases where a HUD-1 form is not used at settlement to be sure you have sufficient documentation to attach to IRS Form 5405.
13. 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 an MRB home buyer program.
14. I am not a U.S. citizen. Can I claim the tax credit?
    Perhaps. Anyone who is not a nonresident alien (as defined by the IRS) and who has owned and resided in a principal residence in the United States for at least five consecutive years of the eight years prior to the purchase date can claim the tax credit if they meet the income limits. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. The IRS provides a definition of “nonresident alien” in IRS Publication 519.
15. 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 $6,500 in income taxes and who receives an $6,500 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 $6,500 in income taxes. If the taxpayer receives a $6,500 deduction, the taxpayer’s tax liability would be reduced by $975 (15 percent of $6,500), or lowered from $6,500 to $5,525.
16. Is there a way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 or 2010 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 downpayment.Buyers should adjust the 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.In addition, 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. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a downpayment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 18 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.
17. HUD allows “monetization” of the tax credit. What does that mean?
    It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 or 2010 income taxes to receive a refund. These funds may be used for certain downpayment and closing cost expenses.Under the guidelines announced by HUD, non-profits and FHA-approved lenders are allowed to give home buyers short-term loans. The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent downpayment requirement.

    In addition, approved FHA lenders can purchase a home buyer’s anticipated tax credit to pay closing costs and downpayment costs above the 3.5 percent downpayment that is required for FHA-insured homes.

    More information about the guidelines is available on the NAHB web site. Read the HUD mortgagee letter (pdf) and an explanation of the FHA Mortgagee Letter on Tax Credit Monetization (pdf). An FAQ about monetization (pdf) is available at the NAHB web site.

18. If I’m qualified for the tax credit and buy a home in 2009 (or 2010), can I apply the tax credit against my 2008 (or 2009) tax return?
    Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 (or 2010) as if the purchase occurred on December 31, 2008 (or if in 2010, December 31, 2009). This means that the previous year’s income limit (MAGI) applies and the election accelerates when the credit can be claimed. A benefit of this election is that a home buyer in 2009 or 2010 will know their prior year 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 prior year tax return, but who have already submitted their tax return to the IRS, may file an amended return claiming the tax credit using Form 1040X. You should consult with a tax professional to determine how to arrange this.
19. For a home purchase in 2009 or 2010, can I choose whether to treat the purchase as occurring in the prior or present year, 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 the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount.

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Transform Unused Basement Space.

There are many charms about the Atlanta metro area. One is that we are a southern city filled
with basements.
There are a number of reasons for homeowners to convert their raw basement space into livable
quarters, virtually all of which will increase the home’s value.
Among the reasons for renovating the basement to increase the size of the home: expand or
create entertainment space, make a children’s playroom or additional bedroom, add a bathroom,
open a home theater, open an at-home fitness center, create a library, or add a wet/dry “pool
house” or “outdoor” room.
Reasons for transforming a basement to create a separate space are: a guest or in-law suite, a
semi-private home office, a garage and a rentable apartment.
There are a number of issues that need to be addressed when planning a basement conversion.
First and foremost, a budget should be set. The budget should encompass not only your ability
to pay for the renovation but what the resale market will bear. Next, financing should be
arranged. Options include a home equity loan, separate loan or simply paying for the
renovations.
Beyond financial issues, consider electrical, climate and temperature, sunlight and adding
windows, plumbing, drainage and mold, additional phone lines, a separate entrance, and a
separate kitchen.
Since most basement conversions are usually fairly large projects, we recommend that a
remodeling professional handle the job. Basement renovations that failed to use quality
construction techniques and interior design expertise can actually negatively impact your home’s
resale value. If you are creating a space to be a part of the main home, consistency is key.
Atlanta Basement Builders recommends on their Web site, “Our style is a uniform look from the
upstairs of the home to the basement creating a seamless effect.”
Another local basement specialist, Atlanta Basement Finishers’ Web site notes, “One thing is
essential for every project: a good design. We offer suggestions…materials you may not know
about, and help you avoid costly mistakes that result from a poor design.”
Be sure to find a licensed, bonded and insured contractor for your renovation. The architectural
planning process will enable a wide variety of creative options to emerge. Proper permitting and
inspections should be obtained. Many contractors will provide free estimates and financing.
Don’t expect to able to work alongside them to reduce costs, however. (Just remember how
much time it takes you to manage and teach people at your place of work!)
Whatever the reason for transforming your basement, you can be sure that it will add to the
enjoyment and use of your home for years to come.

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August 29, 2009

If you are or have a friend who is thinking about buying a home and taking advantage of the $8,000 first-time home buyer tax credit, then there are some facts you need to know, and we need to talk today. Especially since everyone and their little brother/sister knows about the current affordability index… more on that below. And this isn’t just information for my real estate clients in Atlanta, but for any home buyer out there across the USA!

Home Buyer Tax Credit info you should know:

• There is a deadline: December 1st, 2009 (Tuesday after Thanksgiving)
• The income caps for the full $8,000:

Individual Filers with a modified AGI of $75,000 (then prorated up to $95k)
Joint Filers with a modified AGI up to $150,000 (then prorated up to $170k)

• First-timers are defined as someone who has not owned a home in the last 3 years
• Primary residence only (main home)
• A fast transaction from contract to closing is 30 days
• Most lenders suggest giving FHA loans a 45 day window
• Thanksgiving is November 26th
• The Fairfax County Courthouse is closed November 26th and 27th .
• If rates change, your lender may have to give you a new estimate with a new review period.

So your strategy needs to start right now because we are seeing multiple offers on many places as buyers are rushing to beat the Home Buyer Tax Credit deadline. Work the time frame backwards for a minute because the big “crush” on mortgage companies will probably come at the end of November (code for delays). We’re going to feel a bit uncomfortable if settlement is after the 19th and will advise you of the risk. With many loans today being of the FHA variety, lets move back another 45 days meaning you need a ratified contract by early October!

So what is this affordability index? Prices are down about 15% since last year, and 30-year fixed rates that were at 6.5% last year are now lower than you may think.

For IRS details, consult Form 5405.

Time is passing quickly and we should be discussing a game plan right now or you may just miss the Home Buyer Tax Credit for 2009. Our contact information is on the right side of this page.

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We spend lots of time, energy and money making our lawns beautiful and userfriendly.
Here are some tips for making them environmentally friendly as well.
1. Mulch Your Grass Clippings when possible - Grass clippings contain valuable
nutrients taken right out of your soil. So isn’t it odd that we gather our grass
clippings in bags and ship them off to a land fill somewhere on the other side of the
county?
Did you know that mulching your grass and leaves can save you as many as two
fertilizer applications every year? Most lawn mowers come with a mulching blade
that chops grass and leaves into small pieces and deposits them right back into the
lawn.
Mulched leaves - especially sugar and red maple leaves - provide a degree of natural
weed control when mulched into the lawn. Sometimes it is not practical to mulch
your leaves because you have too many of them. But often it is - and it helps your
lawn too!
2. Plant trees, shrubs and flowers - You know that trees are good for the
environment. They help clean the air, return moisture to the air and provide shade
from the hot sun. Shrubs, flowers and bushes also have many benefits other than
just adding beauty. They help stimulate the soil, add bio-diversity to your yard, and
attract birds and other wildlife.
3. Use Fertilizer Wisely - Synthetic fertilizers almost always contain nitrogen and
phosphorous. Nitrogen is what your grass needs for healthy growth. Much of your
lawn’s nitrogen requirements can be supplied by mulching your grass each time you
mow it.
Phosophorous (the second number) is usually unnecessary for healthy lawns, and it
has some negative effects on the environment. Phosphorous that ends up in our
rivers, lakes and ponds stimulates plant growth which disrupts the habitat of fish and
other water life. Look for a fertilizer than has “0″ phosophorous.
Organic fertilizers may actually

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 current trend for your neighborhood or condo building.

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Starting a Compost Pile - Should You Consider One?

Having a compost pile keeps organic yard and household waste out of your local
landfill. It also creates a rich “natural” mulch for your flowerbeds and vegetable
garden.
Here is how to create your own compost pile:
1. Create a pile (without a container) in an out of the way corner of your yard. Or
you can, build a simple three-sided compost box about three feet tall and three feet
square. Adding a removable front to your box is a good idea too. A compost box will
allow you to pile up enough organic material so that heat builds up and
decomposition is accelerated.
2. Properly managing your compost pile will speed up the process. First, you should
regularly turn your compost over with a spade. Second you should keep it damp, but
don’t let it get soaked regularly. If you live in a dry climate you should spray your
pile with a hose every few days. If you live in a damp climate you may have to keep
it covered with a tarp between the application of moisture.
3. Your pile should be located where it can get some sun - in order to keep the
temperature up. Regardless of the season, the interior of your pile should be warm.
As the material decomposes it creates heat, so a warm interior indicates that it is
decomposing correctly.
4. Your pile should contain both “brown” and “green” components with about 2/3
being “brown”. Brown components are rich in carbon and include such things as
dried leaves, pine needles, spoiled hay, straw and paper. Green ingredients are rich
in nitrogen and include grass clippings, yard waste, coffee grounds, fruit and
vegetable kitchen waste.
5. Start with a 5 inch layer of brown components and then add a 2 inch layer of
green, and so on.
6. Don’t add meat waste to your pile because it will attract raccoons and other pests.
7. Don’t add chemically treated grass, cat litter, dog feces etc.
8. Putting weeds in the center of the pile is good because the heat will kill the seeds.
What a great way to get rid of all those weeds!
So go ahead and create your own compost pile. A properly managed compost pile
will start yielding good compost in between 4 and 10 months. Your neighbors will be
“green” with envy.

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It’s often said that the American dream is to own a home with a yard and a white picket fence. In fact, it’s become a bit of a stereotype, especially here in metro Atlanta. But like many stereotypes, it is grounded in truth. Besides the sense of security, what makes owning a home so attractive is that, for most Americans, this is their entrée into the world of investing.

Why is homeownership such a good investment? Over time, as your mortgage balance decreases, your equity increases — even if the value of the home fails to follow. And equity means money you can quite literally take out of your home to use as needs arise.

No matter how much rent you pay over the course of your lifetime, you never establish equity.  However, keep in mind that if the value of your home decreases, you could end up owing more than your house is worth.

In addition to equity, you can benefit financially from home ownership because of the tax breaks. Homeowners can claim federal mortgage interest deductions that aren’t available to renters.

In addition, the profit you get from selling your home may be exempt from the capital gains tax you would pay on profits earned from an ordinary investment.

Under the current tax code, a married couple filing jointly can pocket up to $500,000 of gain without owing any federal income taxes from a home sale if they have owned and used the home as a principal residence for two out the previous five years. Unmarried or married taxpayers filing separately can pocket a gain of up to $250,000 without owing any federal income tax.

Homeowners can also leverage their real estate investments by using borrowed money to their financial advantage. When you buy a home, you generally make a cash down payment up to a specified percentage, depending on the lender’s requirements. The balance is financed through a mortgage. Over the next few years, assuming the value of your home increases, it is now worth more than you originally paid. When you later decide to sell, after you pay off your original mortgage, you will realize a profit equal to the percent of increase in the value of the home. That’s what is known as leveraging debt to make a profit.

Mortgage Interest Deduction Basics

Most people know there are tax benefits to having a home mortgage. Here are the mechanics:

• To claim mortgage interest deduction, you must file your taxes on form 1040 and you must itemize deductions.
• You must have a legal obligation to pay the mortgage. In other words, you cannot deduct mortgage interest paid, for example, on your parents’ home unless you have a legal duty to pay.
• Your mortgage interest deduction may be limited if your adjusted gross income is over $166,800 for most taxpayers in 2009 ($83,400 for married couples filing separately).
• Your mortgage must be a secured debt, which means that the home is collateral which could be sold to settle the debt.
• The mortgage must be on a qualified first or second home. It can also be a boat, mobile home, house trailer, condominium, cooperative, or similar property, which has cooking, sleeping, and toilet facilities. Certain other exceptions apply.

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Test and clean your smoke alarms

A quick testing and cleaning help keep your family safe.

Time:

10 minutes per alarm

Difficulty:

Easy

Frequency

Press the test button once a month, clean and test them with smoke twice a year, and replace the battery once a year.

Overview

Your smoke alarms can only protect you if they work properly, so take a few minutes to test and clean them. And install a fresh battery while you’re at it (be sure to recycle the one you remove).

Pressing the test button shows that the alarm makes noise but doesn’t show that it detects smoke.  That’s why you have to test it with smoke. If the alarm fails either the noise or smoke test, replace the battery. If that doesn’t correct the problem, replace it.

Steps

1. If your home has a security system connected to a central station, contact the security company before testing the smoke alarms.
2. Every month, press the test button to verify that the unit has power and an audible alarm.
3. Twice a year, test and clean the unit:
   • Use an aerosol smoke detector tester to blow smoke into the unit. If you don’t have a tester, use a smoke stick. It should take very little smoke to activate the alarm.
   • Open the alarm’s cover and lightly vacuum the interior with a fine brush attachment.
4. Once a year, replace the battery.
5. Smoke alarms have a life expectancy of approximately 10 years.

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(Provided Courtesy of Keller Williams Realty)

According to the new legislation, a first time home buyer is defined as someone who has not owned a principle residence in the past three years.  Those three years are counted up to the date you take possession of the house you buy in 2009. This means that even if you’ve owned a home in the past, you can still take advantage of the tax credit as long as you haven’t purchased a primary residence since 2006.

The same goes for married tax payers - they must both be first time home buyers.  For non-married joint buyers, only one of them needs to be a first time home buyer, or someone who  hasn’t owned a primary residence in the past three years.

Qualifying homes include:

• New homes
• Homes that are being re-sold
• Condos
• Townhomes

The main restriction is that the credit is only for those who buy a home as their primary residence. So investors looking to buy a rental property would not qualify for the credit.  However owning a vacation home or a rental property already does not neccessarily disqualify you from taking advantage of the credit (as long as you haven’t owned a primary residence in the past three years).

A Look at the Numbers

The tax credit is equal to 10% of the purchase price of the home, up to $8,000.   The amount of the credit you can qualify for is related to how much money you earn.  Here’s how the credit is scaled:

• Single home buyers earning 95K or less qualify. If you make 75K or less, you qualify for 100% of the $8000. If you make halfway, 85K, you qualify for 50% or $4000. The credit phases out gradually between 75K and 95K of income. For example, if you make halfway between the income limits, 85K, you qualify for up to half of the credit.
• The same rate applies for married couples and joint buyers whose incomes limits are doubled to $150,000 to $170,000. Married couples or joint buyers whose incomes are less would receive the full $8000 credit.  At an income level of  $160,000, halfway between 150 and 170, the buyers would receive half the credit – or $4,000.  And the credit phases out altogether at $170,000.

This credit represent a significant amount of money. One of the biggest points of difference for the new credit from the one congress passed in July of 2008, is that the new credit does not have to be paid back.

In addition, it’s refundable, which means that if you’ve paid all your taxes as you go with an automatic payroll deduction, you would receive an $8,000 check from the IRS.

If you’re committed to buying a house in 2009 and want to use the $8000 tax credit for a downpayment, consult with your certified public accountant.

In Summary

Qualifying home buyers will need to make their home purchase between January 1, 2009 and December 1, 2009.  And the home has to remain their principal residence for the following three years.

The new tax credit coupled with historically low mortgage rates and rising affordability, offers buyers a great opportunity if they act fast.

If you’re interested in learning more about the new tax credit or about homes in your area, speak with us at 404-564-3512

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Have a pool? If so check out these great ideas:

Pool fountains are great for outdoor parties and poolside entertaining. There are fountains that easily attach to the pool’s existing pump and feature tiered and adjustable spray heights from seven feet to 16 feet. Reviewers rave about floating around in the pool and drifting under the fountain on hot summer afternoons. Other fountains include underwater light shows that radiate a kaleidoscope of color beneath the surface and come with a remote control that lets you choose from several rhythmic displays. These fountains are inexpensive and make for wonderful gifts (www.intheswim.com).

For those seeking pool recreation, there’s a regulation size pool volleyball set and a floating table tennis game that includes a buoyant tabletop surface, two oversized paddles and a net (www.alsto.com). For those wishing to exercise but find their backyard pool too small — even a 40-foot pool is not big enough to get into a swimming rhythm — Endless Pools manufactures a swim current generator called Fastlane. Similar to a treadmill, it produces a wide, smooth current of water flow so you can swim in place at whatever pace you set. The Fastlane is great for weight loss as well as aquatic therapy. For more information, go to www.endlesspools.com.

Robotic pool cleaners are all the rage. They’re very convenient and require no assembly. Simply plug it in, turn it on and drop it in the pool. Some cleaners can scrub, brush, sweep, vacuum and filter a pool up to 20 x 50 feet in just 60 minutes to 90 minutes. They’re also good for the environment. The need for backwashing and cleaning cartridges is reduced by up to 80%, saving thousands of gallons of water. The need for pool chemicals is also reduced. Robotic cleaners collect dirt, debris, sand, silt and algae into a fine mesh bag or cartridge. The filter bags of many units will filter particles as small as two microns, so they even filter out bacteria. Many models are available at www.lesliespool.com.

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For the typical homebuyer, location is everything.  Finding the right neighborhood is a crucial part of the homebuying process, and for some buyers, it is the most important element of their search.  It turns out the old real estate cliche “Location, location, location!” really does ring true.But what makes a great neighborhood?  For some, this means close proximity to work or school, high walkability scores, and easy access to public transportation.  Families with school-age children tend to want to buy in areas with the best school districts.  For many, a neighborhood’s ambience or “feel” is extremely important, while other buyers place a premium on personal preferences such as a love of historic homes or the need to be part of a thriving art community.

The following overview of the most desirable intown Atlanta neighborhoods attempts to address all of these concerns by briefly summing up the essence of each neighborhood in a few sentences.  Each area will be covered in more detail elsewhere.

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Ansley Park offers a close-in location tucked away just above Piedmont Park.  Its winding, tree-lined streets are flanked with magnificent English half-timber homes and Georgian Revival mansions, ranking it among the most desirable neighborhoods in Atlanta for well-heeled professionals.Brookhaven was Atlanta’s first country club suburb, which featured Colonial Revival homes clustered around the exclusive Capital City Country Club.  Since then, this inner suburb’s mix of architectural styles and housing types attracts families looking for more affordable options that are still located in a tranquil inner suburb.Brookwood Hills is a private, leafy enclave adjacent to Buckhead and characterized by Georgian and Colonial Revival homes situated on hilly streets and shaded by mature oak trees.  It offers the best of both worlds–seclusion in the middle of it all–making it an appealing neighborhood for those who can afford it.Buckhead offers a mix of ritzy high-rise condos and elegant single-family homes, making it attractive to a wide range of buyers, from young single professionals to power couples, celebrities, and Atlanta’s established elite, both past and present.  Tuxedo Park, a subset of Buckhead, claims the distinction as the largest concentration of Old Money in town, as evidenced by huge multi-million-dollar estates nestled on vast landscaped lawns.

Cabbagetown is an old mill town composed primarily of colorfully painted Shotgun houses with a few excellent examples of grand Victorian homes situated on its grid-patterned streets.  Its gritty industrial surroundings blend with its historic flavor to create the perfect setting for artists, young couples, and singles looking for a unique neighborhood with a strong sense of community.

Candler Park is a funky neighborhood of modest Craftsman bungalows flanking a large park with a public golf course. Located just to the east of the edgy retail area known as Little Five Points (L5P), its walkability and friendly front-porch vibe draws a mix of quirky and progressive residents including singles, couples, and young families.

Castleberry Hill is a commercial-residential district primarily consisting of converted warehouses and vintage storefronts.  Urban-industrial chic lofts and live-work complexes are complemented by a strip of funky art galleries and a few edgy bars, making this still-transitional area the closest thing to Soho that Atlanta has to offer.

Decatur maintains a quaint small-town feel centered around an old-fashioned town square, but it’s located just a short drive or MARTA ride from downtown Atlanta.  Though it is a distinct city of its own, it is closer in than many other inner suburbs, and as such is a highly desirable area.  Its famously progressive residents include students and freethinkers, as well as families who are attracted to its excellent schools and laid-back lifestyle.

Druid Hills is a lush forested oasis bordering Emory University and Fernbank Museum.  Here you can find Georgian and Jacobean Revival mansions with sprawling lawns, as well as English half-timber houses and brick Tudors, all of which create a picturesque storybook atmosphere.

East Atlanta is an up-and-coming area that is close-in yet still affordable.  Its quirky identity (local bumper stickers read “Keep East Atlanta Weird”) and active neighborhood association make it an attractive neighborhood for many first-time homebuyers, and its crowning glory is the thriving intersection of restaurants, bars, and shops known as East Atlanta Village (EAV), a microcosm of the “East Village” in the South.

East Lake consists mainly of postwar cottages and bungalows clustered around the East Lake Country Club, with some remarkably attractive newer construction infill.  It is a transitional area that offers attractive and affordable housing along with a short commute to downtown Atlanta.

Edgewood and Reynoldstown are adjacent districts just south of Inman Park and Candler Park which offer affordable housing and easy access to MARTA.  The new Edgewood Retail District forms the center of commercial activity and has drawn many newcomers looking for intown convenience to settle in these neighborhoods filled with traditional bungalows and mill cottages.

Grant Park is a beautiful historic district featuring many fine examples of Victorian and Queen Anne architecture, as well as Shotgun houses and Craftsman bungalows.  Buyers looking for antique charm often settle here, and young families love being near the Atlanta Zoo.

Inman Park was Atlanta’s first suburb and a pet project of architect Joel Hurt, showcasing some of the most impressive examples of Victorian and Queen Anne mansions in the city.  It touts itself as “small-town Downtown” and its artsy, eccentric residents come together each year to host the Inman Park Festival and Tour of Homes.

Kirkwood homes range in style from Victorian-era mansions and Craftsman bungalows to a variety of postwar cottages, many of which have been recently renovated in this transitioning area.  Many young couples and families just starting out have made their homes here.

Lake Claire is Candler Park’s older, more refined sister, offering the same mix of Craftsman bungalows, brick Tudors, and postwar cottages.  Families especially enjoy the sedate lifestyle it offers–one in which they can be in town while still feeling somewhat removed from the hustle and bustle of city life.

Midtown is the residential heart of Atlanta and is bound to the north by the city’s green jewel, Piedmont Park, and to the west by its best-known commercial artery, Peachtree Street.  This grid of streets filled with Victorian mansions, Craftsman bungalows, and American Four Square homes forms the ideal setting for people that really want to be in the thick of it all while still feeling part of an honest-to-goodness neighborhood.

Morningside-Lenox Park feels like a quaint and secluded suburb in the midst of a bustling city.  Brick Tudors and bungalows neatly arranged in a pretty park-like setting attract young professionals as well as Soccer Moms and their growing families.

Oakhurst straddles the line between Atlanta and Decatur, offering an agreeable balance of intown convenience and small-town lifestyle.  Its streets of Craftsman bungalows radiate out from Oakhurst Park, making it great for kids, and a small commercial strip keeps things interesting for the young couples who are attracted to the neighborhood’s charm.

Old Fourth Ward encompasses the area just south of Midtown, making it  one of Atlanta’s most centrally-located neighborhoods.  In recent years it has experienced a renaissance as young couples and professionals have moved in and started renovating older housing stock, and newly-constructed industrial lofts round out the offerings for edgier individuals.

Ormewood Park is a quiet area sandwiched between historic Grant Park and happening East Atlanta Village and consists primarily of bungalows and postwar cottages as well as some new construction infill.  The retail district known as Glenwood Park is still filling up with tenants but has already proven to be a selling point for the singles and young couples settling in this affordable neighborhood.

Poncey-Highland is a sliver of a neighborhood bordering the infamous Atlanta thoroughfare Ponce de Leon Avenue, sandwiched between the Victorian splendor of Inman Park and the bohemian bungalows of Virginia-Highland.  As such, it is one of intown Atlanta’s most walkable neighborhoods and has a lot to offer for residents on the go.

Sweet Auburn is technically part of the Old Fourth Ward but has a special vibe all its own as it is the historic center of African-American life in Atlanta and home to Martin Luther King’s birthplace and the church he preached at, Ebenezer Baptist.  A variety of residents feeling some attachment to the significance of the area have made their homes here in lovingly restored bungalows or historically-accurate new construction.

Virginia-Highland ranks among the most desirable intown neighborhoods and is centrally located just east of Midtown. Its Craftsman bungalows cluster around commercial strips of independent businesses, creating a trendy atmosphere reminiscent of a bohemian village, attracting young professionals, families, and individuals looking for a unique urban-suburban experience.

 

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HB 261 was signed into law on May 11, 2009 by Georgia Governor Sonny Perdue. GAR applauds House Sponsor Ron Stephens (Savannah), House Ways and Means Chairman Larry O’Neal (Warner Robins) and Senate Chairman Chip Pearson (Dawsonville) for their tireless efforts in the passage of this important legislation. Unlike the federal tax credit, the Georgia credit is not limited to first-time homebuyers, and there are no applicable income limits. The credit is only available to buyers of eligible single family residences who close between June 1 and November 30 of this year. The prompt actions of all GAR members who responded to Calls for Action on this legislation were pivotal in influencing the passage of this legislation. Below are Frequently Asked Questions regarding the Georgia Tax Credit:

 

1. Is this tax credit limited to first time homebuyers?
NO, all purchasers of an eligible single family residence in Georgia that file a Georgia income tax return can claim the credit.

2. Can the Georgia credit be combined with the federal $8,000 first time homebuyer tax credit?
YES, if buyers meet the qualification for each credit they may claim both. Each credit operates independently from the other. One is claimed on your federal income tax return, the other is claimed on your Georgia income tax return.

3. Is it true this credit is limited to the purchase of a single family residence?
YES, the tax credit is limited to the purchase of one single family residence.
Single-family residences (including condominiums) are eligible if they are:
* New residences, residences occupied at the time of sale, or previously occupied residences, if such residences:
- Were for sale prior to the effective date (5/11/09) and were still for sale after the effective date;
* Owner-occupied residences with respect to which the owner’s acquisition debt is in default on or before March 1, 2009; and
* Residences with respect to which a foreclosure event has taken place and which are owned by the mortgagor or the mortgagor’s agent.

4. Is it true that eligible single family residences must have been listed prior to May 11, 2009 in order to qualify for the credit?
YES, the original intent of the bill was aimed at reducing the housing stock that has been on the market for an extended period of time.

5. Is it true that only eligible buyers that close between June 1, 2009 and Nov. 30, 2009 can claim the credit?
YES, the intent of credit is to stimulate the market by encouraging potential buyers to get off the fence and BUY NOW!

6. How do I determine the amount of tax credit I am eligible for?
The tax credit will be for 1.2% of the purchase price, with a maximum credit of $1,800 (whichever is less). Homes purchased for $150,000 or more will receive a maximum of $1,800.

7. Can I claim all $1,800 on my 2009 income tax returns?
NO, the total amount of your credit must be claimed in one-third increments over a three year period. The maximum credit per year is $600 if you are eligible for the maximum $1,800. Any excess or unused credit may be carried forward to apply to succeeding years’ tax liability.

8. Can I amend my 2008 Georgia income tax return to claim the credit?
NO, the tax credit cannot be applied against prior years’ tax liability.

9. I am looking for investment property or a second home, is the credit available for the purchase of owner-occupied residences only?
NO, all eligible single family residences qualify for the credit. However, each taxpayer can claim the credit one time only.

10. Is there an income limit for buyers who claim the credit?
NO, there are no income limits applicable to this credit.

11. Is there a limit to how long a buyer must own the property to claim the credit?
NO, there is not a limit to how long a buyer must own the property.

12. Does any portion of the credit require repayment for any reason?
NO, if you are awarded the credit there are no penalties that would require you repay any portion of the credit.

 

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Where have all the Realtors gone?

According to the most recent NAR (National Association of Realtors) monthly membership report, Georgia Realtor membership is down 18.73% over the past year–the biggest decline in the United States. Where are they all going? Many Realtors are leaving the real estate industry due to less than optimal Atlanta real estate market conditions while others may be moving to real estate brokerages that do not require NAR membership in an attempt to save on membership dues/fees as they cut costs.

Many of these Realtors entered into the business in 2002 when membership jumped to above 25,000 to take advantage of hot Atlanta real estate market conditions. Unfortunately, most of these Realtors have no experience with difficult market conditions and do not know how to adequately prepare, market, and sell a home in this market. The previous “sales technique” of sticking a sign in the yard and waiting for calls that worked for years…simply does not work now.

Ultimately, this reduction of Realtors is a good thing for the Atlanta real estate market and for home buyers and sellers. This correction will leave the industry stronger as only the best agents and firms will continue to flourish.

On a positive note, NAR membership (which was down in 49 states) actually increased in North Dakota. In North Dakota membership rose from 1376 to 1378 over the past year. Word on the street is they are shooting for the stars and a net increase of 4 for next year. Dream big, ND!

 

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• Last year, 114,989 new people moved to the Atlanta metro area, which consists of 28 counties. Only Dallas (146,532), Houston (130,185) and Phoenix (115,978) metro areas added more new residents.

• From 2000 to 2008, the Atlanta area added 1.13 million people. We were second only to Dallas, which added 1.14 million people.

• The Atlanta metro area is now considered the eighth-largest in the country. We moved up one spot, jumping ahead of the Washington, D.C., metropolitan area.

• How big are we really? To put it all in perspective, Los Angeles County is the largest in the country, with a population of 9,862,049. That’s larger than the entire population of Georgia, which stands at 9,685,744.

• Fulton County’s population surpassed the one million mark for the first time. With a population of 1,014,932, Fulton is the largest county in the state.

• Forsyth County continues to rank as one of the fastest-growing counties in the country, with a growth rate of 6.3 percent. Its population reached 168,060.

• Georgia had 14 counties that ranked in the top 100 nationally for growth. The states with the most such counties were Texas, Georgia, North Carolina and Utah, in that order.

• In case you were wondering how the rest of the South was faring, North Carolina is growing, too. The Raleigh metro area, with a population of 1,088,765, had the fastest growth rate in the country, at 4.3 percent.

 

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Consumer Reports magazine advises home owners not to put off important maintenance projects, noting that waiting until the economy rebounds could end up making the repairs more costly while putting a family’s health at risk.

The magazine identifies five crucial maintenance issues:

• Check the gutters: Clogged gutters, broken fasteners and separations where the gutters meet the fascia board will lead to roof leaks if they haven’t already.
• Inspect the roof: Cracked, curled and mussing shingles mean a roof is nearing the end of its useful life. Cracks around chimneys, skylights, and roof valleys can also suggest the roof might be leaking.
• Look for bugs: Termites and carpenter ants can bore through a home in a few short years. Probe the sill plate on top of the foundation with a screwdriver to check for rotten wood. Also look for carpenter ants and termites along windowsills and walls.
• Avoid mold: Mold and mildew can cause musty odors, dank air, and make residents sick. Check under carpets and around windows for visible mold or mildew.
• Don’t ignore cracks: Foundation cracks wider than 3/16 of an inch can be a problem. These require examination by a structural engineer.

 

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Overview

Inspect the outdoor condenser unit of your air conditioner in spring and summer. If you find any problems, call for service; not only does trying to service it yourself void your warranty, you could accidentally release refrigerant into the atmosphere.

Here’s what to check; call a professional if the condenser needs repairs.

Steps

1. When the air conditioner is running, check the refrigerant lines.
   • Look for crimping in both refrigerant lines. They are most vulnerable where they leave the condensing unit and where they go through your exterior wall.
   • The larger tube should be cold and insulated. Check that the insulation is in good condition, without wear or cracks.
   • The smaller tube should be warm along its entire length.
2. Use the level to check whether the condensing unit is slanted.
3. Cut back plants near the unit to improve airflow.

• Do not place the air conditioner unit where walls, decks, fences and other structures restrict airflow. Either move the unit or the feature restricting the airflow. Consult with a professional to determine the best solution.
• Place the unit at least 6 feet from things that discharge heat, such as vents from water heaters and dryers. Dryer vents also discharge lint, which plugs air conditioner coils. Consult with a professional to determine which is easier to move.
• Shut off your air conditioner when mowing the lawn to prevent clippings from getting sucked into the condenser. And point the lawnmower discharge away from the condenser so it doesn’t throw stones or other objects into the condenser’s delicate aluminum fins.

 

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Whether you play up an existing interior feature or install something new simply for effect, chances are that buyers will both notice and remember unique extras about your home. The idea is to demonstrate how your home boasts special features that other homes may not. Sometimes even minor interior details, such as a window seat or kitchen wainscoting, can make a home more memorable and attractive to potential buyers.Transform Empty Space into Unique Space The creation of new spaces in a home is a great way to make your interior unique. Sellers might consider transforming unused space, such as the area beneath basement steps, into a storage closet or laundry nook. Similarly, attics might be converted into usable space, such as a bedroom, playroom or office, which can have a big payoff at sale time.Stage Spaces to Suit Several Purposes If the room already boasts an extraordinary feature like a screened porch or conservatory, be sure to play it up for dramatic effect. For instance, not all buyers

will be searching for a greenhouse; so be sure to include great patio furniture or suggest how the space might have alternative uses. A screened-in porch could be used as a seasonal dining area or a sumptuous place to relax. Include items that suggest the many uses the space offers.Highlight Unique Features with Furniture or Lighting Completely functional design elements should also be played up for the sale. Keep built-in bookcases orderly and neat. Highlight the fact that buyers can place furniture in front of them—an attractive writing desk or a chaise lounge can create the feel of a classic library. Accent high ceilings or crown moldings with an attractive lighting feature, such as a chandelier.Add Features to Complement Your Home’s Style Sellers, who are eager to install new interior features to attract buyers to their home, might consider installing an island or breakfast nook to their kitchen. Pocket doors, period fixtures, decorative arches, and large closets are good selling points for any home. Sometimes a new decorative treatment that emphasizes the home’s period or architectural style can have a significant impact. For instance, stamped tin panels might highlight an arts and crafts era home. A chrome table and chair set might set off a great 1950s kitchen.Remember, buyers want to know what makes your home special. So, the more unique features you can point out or install, the more likely your home’s interior will captivate onlookers. While some decorative and design features are subjective, if you stick to styles that match your home’s overall architecture or that are universally functional, you will give your home some added selling points.

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*Reprinted from our monthly e-newsletter House Hunter Highlights

(online @ http://news.househunteratlanta.com)

Most people believe they know everything there is to know about selling their house. They sign a contract with an agent, hold an open house, and wait for those multiple offers. But some common misconceptions about the whole process could be hurting their odds of receiving an offer. Improve your own odds with a bit of knowledge.Myth: People are buying your house, not your furniture. You might be selling only four walls and a roof, but most people looking at your house see beyond the basic structure. They are buying a lifestyle. Potential buyers will be looking at the square footage and the solidness of the structure, but they will also notice the battered sofa, the wrinkled bed sheets, and the imposing dining room set. A house might be in pristine condition, but if the furniture is threadbare and tired it will make the entire house seem run-down. Improve your furniture, and improve your chances of selling your house. Myth: The selling price of your house increases with every upgrade. While some upgrades can increase the selling price of your home, improving your home too much can price you out of the market. To set your renovation budget, research homes in your neighborhood to find out their final sale prices. Your original purchase price and renovation budget together cannot exceed the sale prices of other homes. If you decide to overspend to create a customized dream home, you may never see a return on that investment. But adding square footage to your home, through an addition or a finished basement, may pay off. Book an appointment with your real estate agent before starting any major construction to ensure that you are not overspending.Myth: An open house is the best way to sell a home. Only 5 percent of homes sell through an open house. The Internet, particularly the Multiple Listing Service, has become the fastest and most convenient way to view homes. Potential buyers see all the properties for sale in their area and compare the features of each, all without leaving their own home. Buyers can view hundreds of properties in a day using MLS, but only a handful of homes through open houses. Instead of holding an open house each weekend, try extensive advertising on the Internet and in local newspapers. And if a potential buyer wants a private viewing at an inconvenient hour, allow it. People at your open house might be curious, but someone who has requested a private viewing is interested in buying your home.Myth: Base your price on potential profit. The price of your home needs to be based on fair market value, otherwise you will never see an offer. You might need the profits from the sale to finance the purchase of a new home, or to pay off debt. Still, you can never raise your asking price to satisfy your own needs. Buyers will comparison shop. They will compare your house to other homes in your neighborhood, and if every feature but the price is equal, you will lose a sale. Remember that an asking price is not static. Considering market conditions, you may have to reduce your price to see that offer.

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It’s not surprising we get calls on a weekly basis from clients wondering what type of things would a homeowner policy typically cover and can we recomend a good insurance agent.

All policies can have differences but our sources tell us a Homeowners-3 (HO-3) is the most common
homeowners policy issued in the United States so we’ll talk about what might apply to an HO-3 policy.

Question #1:
Am I covered for direct losses due to fire, lightning, tornadoes, wind storms, hail, explosions, smoke, vandalism and theft?

Yes. The HO-3 provides broad coverage for these and other disasters or “perils,” as they are called in the policy, including all those listed in the question. You should check the dollar limits of insurance in your policy and make sure you are comfortable with the amount of insurance you have for specific items. Also, if you have property near the Atlantic or Gulf coasts, there may be some restrictions on your coverage for wind damage. Ask your agent about windstorm/hurricane deductibles. In areas prone to hailstorms, you may have a specific hail damage deductible.

Question #2:
Are my jewelry and other valuables covered?
Maybe.
The standard policy provides only from $1,000 to $2,000 for theft of jewelry. If your jewelry is worth a lot more, you should purchase higher limits. You may wish to add a floater to your policy to cover specific pieces of jewelry and other expensive possessions such as paintings, electronic equipment, stamp collections or silverware, for example. The floater will provide both higher limits and protect you from additional risks, not covered in your normal policy.

Question #3:
If my house is totally destroyed in a fire and I have $150,000 worth of insurance to cover the structure,
will this be enough to rebuild my home?
Maybe.
If the cost of rebuilding your home is equal to or less than $150,000 you would have enough coverage. The HO-3 policy pays for structural damage on a replacement cost basis. If the cost of replacing your home is, say, $120,000, then that is all the insurance you need. On the other hand if the cost of rebuilding your home is $180,000, then you will be short $30,000. If you live in an area that is frequently hit by major storms, ask your insurance company about an extended or guaranteed replacement cost policy. This will provide a certain amount over the policy limit to rebuild your home so that if building costs go up unexpectedly, due to high demand for contractors and materials, you will have extra funds to cover
the bill. If you choose not to rebuild your home, you will receive the replacement cost of your home, less depreciation. This is called actual cash value. You should make sure that the amount of insurance you have will cover the cost of rebuilding your house. You can find out what this cost is by talking to your real estate
agent or builders in your area. Do not use the price of your house as the basis for the amount of insurance you purchase. The market price of your house includes the value of the land on which the house is situated. In almost all cases, the land will still be there after a disaster, so you do not need to insure it. You only need to insure the structure.

Question #4:
Am I covered for flood damage?
No. So, if you live in a flood-prone area it may be wise to purchase flood insurance. Flood insurance is provided by the federal government, under a program run by the Federal Insurance Administration. In some
parts of the country, homes can be damaged or destroyed by mudslides. This risk is also covered under flood policies. Contact your agent or company representative to get this insurance or call the Federal Emergency Management Agency at 1-800-427-4661 or visit its Web site at www.fema.gov.

Question #5:

A pipe bursts and water flows all over my floors. Am I covered?

Yes. The HO-3 covers you for accidental discharge of water from a plumbing system. You should check your plumbing and heating systems once a year. While you are covered for damage, who needs the mess and hassle?
Question #6:

What if water seeps into my basement from the ground, am I covered?
No. Water seepage is excluded under the HO-3. And if the water seepage is not due to a flood you will not be covered under a flood policy. Seepage is viewed as a maintenance issue and is not covered by insurance. You should see a contractor about waterproofing your basement.
Question #7:

Am I covered for earthquake damage?
No. Earthquake coverage is sold as additional coverage to the homeowners policy. To find out whether you should buy this insurance, talk to your agent or company representative. The cost of this coverage can vary
significantly from one area to another, depending on the likelihood of a major earthquake.

Question #8:

A neighbor slips on my sidewalk or falls down my porch steps and threatens to take me to court for damages. Does my policy protect me?
Yes. The policy will pay for damages, if a fall or other accident on your property is the result of your negligence. It will also pay for the legal costs of defending you against a claim. Also, the medical payments part of your homeowners policy will cover medical expenses, if a neighbor or guest is injured on your
property. You should check to see how much liability protection you have. The standard amount is 100,000. If you feel you need more, consider purchasing higher limits.

Question #9:

A tree falls and damages my roof during a storm. Am I covered?
Yes. You are covered for the damage to your roof. You are also covered for the removal of the tree, generally up to a $500 limit. You should cut down dead or dying trees close to your house and prune  branches that are near your house. It’s true that your insurance covers damage, but falling trees and branches can also injure your family.
Question #10:

During a storm, a tree falls but does no damage to my property. Am I covered for the cost of
removing the tree? Maybe. Your trees and shrubs are covered for losses due to risks like vandalism, theft and fire, but not wind damage. However, if a fallen tree blocks access to your home you may be covered
for its removal. Decide if you need extra insurance for the trees, plants and shrubs on your property. You may be able to purchase extra insurance, which will not only cover the cost of removing fallen trees, but will also cover the cost of replacing trees, and other plants.
Question #11:

If a storm causes a power outage and all the food in my refrigerator or freezer is spoiled and must be thrown out, can I make a claim?
The general answer is no. However, there are a number of exceptions. In some states, food spoilage is covered under the homeowners policy. In addition, if the power loss is due to a break in a power line on or close to your property, you may be covered. You should check with your agent to find out whether you
are covered for food spoilage in your state. If not, you can add food spoilage coverage to your policy for an additional premium.
Question #12:

I have children away at college. Are they covered by my homeowners insurance?
Probably. As long as they’re full-time college students and part of your household, your insurance generally provides some coverage in a dorm, typically 10 percent of the contents limit. If they live off campus, some companies may not provide this coverage if the apartment is rented in the student’s name.
Question #13:

My golf clubs are stolen from the trunk of my car. Does my homeowners policy cover the loss?
Yes. The HO-3 covers your personal property while it is anywhere in the world. However, if your golf clubs are old, you will only get their current value, which may not be enough to purchase a new set. Consider buying a replacement cost endorsement for your personal property. This way you will get what it costs to replace the golf clubs, less the applicable deductible.
Question #14:

I have a small power boat. If it is stolen, am I covered? What if there is a boating accident and I get sued? Am I covered for that?
Whether or not you are covered for either theft or liability depends on the size of the boat, the horsepower of the engine and your insurance company. Coverage for small boats under homeowners policies varies
significantly. Ask your insurance representative whether you need a Boatowners policy.

Question #15:

I have a house that is close to the ocean. I’ve heard that if it is destroyed by the wind, the town’s new building code requires me to rebuild the house on stilts. This will add $30,000 to the cost of rebuilding my house. Am I covered for this extra cost?
No. The HO-3 excludes costs caused by ordinances or laws that regulate the construction of buildings. You can purchase an Ordinance or Law endorsement. This will cover the extra costs involved in meeting new
building codes.
Question #16:

Am I covered for “Acts of God”? Sometimes. The term “Acts of God” is not specifically mentioned in homeowners insurance policies. It usually refers to natural disasters like hurricanes and tornadoes, as
opposed to man-made acts, like theft and auto accidents. Some natural disasters, such as damage from windstorms, hail, lightning and volcanic eruptions, are covered under homeowners insurance. Damage from floods and earthquakes is not.

Question #17:

What should I do if my policy provides less coverage than the HO-3?
Do review your coverage with your agent. Some older policies provide less coverage than the HO-3. They may not provide coverage for water damage, theft or liability. They may also provide coverage for the
house on an actual cash value basis, rather than a replacement cost basis. Actual Cash Value means replacement cost less depreciation. For example, if your roof is destroyed in a storm, the insurance will only pay for the cost of a  new roof less the amount of depreciation of the old roof. If your roof was in great
shape, this deduction will not be large. However, if the roof was old and worn out, the deduction for depreciation may be significant. You should try to get an HO-3.

Call us if you need thename of a professional insurance agent.

What is The Hunter Group advantage?

If an Atlanta area homeowner is having a temporary financial problem. Speaking to the lender that holds the loan is always the first step. Call customer service and ask to speak with the loss mitigation department. Many lenders have programs that allow a modification of payments or even the ability to skip payments and move them to the end of the loan term. If staying in the home is the number one priority, let them know and see what programs are available.If a Georgia homeowner has filed for bankruptcy. Laws vary from state to state, but in many states the law protects homeowners from foreclosure while in a bankruptcy. Also, the trustee for the bankruptcy must approve any listing agreement if the home is to be sold.PMI (Private Mortgage Insurance), may prevent a Georgia property from being sold in a short sale. PMI insures the lender against the homeowner defaulting on their loan. If the lenders potential loss from a foreclosure exceeds the insured amount, they may be willing to do a short sale. If they will receive more money from the insurance than the short sale, they may decline. Lenders only do a short sale when it makes business sense for them.

Foreclosure is imminent. In Georgia some lenders will stop the foreclosure process if a short sale has been initiated, but if it is within two weeks of being sold on the courthouse steps, it may be too late. It never hurts to try and a call to loss mitigation is always the first step. They may tell us it has already been turned over to an attorney, then we call the attorney. We may not have time to complete a short sale, but we don’t give up until they tell us there is no way.

If you are not sure if a short sale is the best choice, and you live in the metro Atlanta area, contact us. We can look at your situation and give you advice as to your best plan of action. We are professional negotiators, here to keep the American Dream a dream, not a nightmare.

What is The Hunter Group advantage?

Considering a home purchase in metro Atlanta this year? The news for Atlanta home buyers just keeps getting better!

The Internal Revenue Service announced that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

There has NEVER been a better time to purchase real estate in metro Atlanta.

What is The Hunter Group advantage?

In a short sale the lender accepts less for the property than the loan amount. There are four main factors to consider if a homeowner qualifies.

Factor One- the market pricing must be less than the loan amount. Say a homeowner purchased a metro Atlanta property in 2007 for $400,000, with 25% down. In 2009 the property could be sold for $360,000. This is a loss of $40,000, but it is not eligible for a short sale because the loan amount is only $300,000. The loan could be paid off with a sale of the property at market value. If the property could only be sold for $260,000, then it would be eligible for a short sale.

Factor Two- the homeowner must be financially insolvent. In most cases, a lender will be unwilling to consider a short sale if the homeowner has other cash and assets that they could be using toward the mortgage. We did see an exception to this recently with an Atlanta investor. He had purchased an intown condo three years ago for $500,000 with $50,000 down. Market value has now dropped to $275,000. The bank was about to take a loss of $175,000 and asked the investor to sign a personal note for $70,000. We were able to negotiate with the bank for the investor to hold a personal note for $40,000, for ten years at 0% interest and no hit to his credit. This investor was not behind on payments and had otherwise stellar credit, which is now unaffected by divesting this property.

Factor Three- the homeowner must demonstrate a hardship. This could be a job loss, a medical issue, death of a spouse, or any other factor that makes it impossible for them to make the mortgage payments. This would also include an adjustable rate mortgage that adjusts to a level that is higher than their income allows. We have even seen some banks consider the shift in the market a hardship, as in the case of the investor above.

Factor Four is the Atlanta area homeowner must be cooperative and willing to produce all the documentation that is required. Short sales can be a paperwork nightmare. The homeowner must trust his rea;tor group and be willing to sign a release permitting us to negotiate on their behalf. Owners must be willing to submit financial statements, tax returns, and write a letter explaining the hardship. All the paperwork must be complete prior to listing the home for sale.

If the above factors are met, a short sale could be the best course of action. If the property were to foreclose, lenders tell us it takes 5-7 years for credit to recover enough to purchase another home. In a short sale, the recovery average is two years. It also costs the homeowner nothing. Fees are paid by the lender.

We may be able to help. Please contact us for a free evaluation.

What is The Hunter Group advantage?

A Short Sale is when a property is sold for less than the mortgage amount owed, with the lender accepting proceeds as payment in full. For the homeowner, there are many advantages over a foreclosure. In general, homeowners are able to stay in the property until the sale is complete. The homeowner will still have a ding to their credit, but lenders are telling us on average their credit recovers enough within two years for them to purchase another property. As compared to a foreclosure, the average is five to seven years before the homeowner can purchase again. Even more distressing is the fact that many loans contain a clause that the lender can seek redemption up to 20 years after the foreclosure. This means that a person could go on with their life, turn their financial situation around, and 19 years later get a judgment for the shortfall! Banks are overwhelmed right now and most are not suing, but when the dust settles it is our fear that they will come looking for the money they lost.

So what is the advantage for the lender? Foreclosures are expensive! Costs include legal fees, possible eviction costs, taxes, insurance, maintenance, neighborhood HOA dues, and selling costs. According to the report by the Joint Economic Committee of Congress on April 11, 2007, “Sheltering Neighborhoods from the Sub-prime Mortgage Storm,” each foreclosure costs lenders approximately $50,000. Often a foreclosure will have all the appliances removed, the fixtures missing and even the copper plumbing stolen! Banks are not in the business of holding real estate and the more money tied up in foreclosures, the less money they have to lend.

 

Our research shows that in a large % of foreclosures, the homeowner never even tried to sell. Economic troubles can be overwhelming and many people feel their only choice is to walk away. We may be able to help them. In future blogs I will be exploring the qualification process for listing a home as a short sale. In the mean time, if you know of someone who could use our advice, please contact us. We are working very hard to keep the American Dream, a Dream, not a nightmare.

What is The Hunter Group advantage?

U.S. Senate passed the American Recovery and Reinvestment Act of 2009

***Including an $8000 tax credit to First Time Homebuyers***

 

The provisions in the bill pertaining to the tax credit for first time home buyers are as follows:

* The $8000 tax credit is available only for first-time home buyers

  (Definition of a “first-time home buyer” is a buyer who has not owned a

  principal residence during the three-year period prior to the purchase) 

 

* There is a $75,000 adjusted gross income limit for tax filers filing 

   separate and $150,000 limit for joint return filers. 

 

* The $8000 tax credit is available only for primary residence purchases.

 

* The tax credit does not require a repayment for most cases.

 

* The tax credit does have a repayment provision if the homeowner

   does not occupy the property for a minimum of 3 years from the

   closing date.  

 

* The home buyer must purchase a home between January 1, 2009 and

   December 1, 2009. 

 

* The $8000 tax credit is received when you file your tax return.  

 

How does the credit affect the taxes you owe and the refund you get? The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file.

There has never been a better time to purchase a home!

What is The Hunter Group advantage?

Frequently Asked Questions
About the First-Time Home Buyer Tax Credit

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the $7,500 tax credit?
   First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
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 homeownership 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. 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 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. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
4. What types of homes will qualify for the tax credit?
   Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
5. Instead of buying a new home from a home builder, I have 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 April 9, 2008 and before July 1, 2009.
   
   In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
6. 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.
7. 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 $7,500 are available for some taxpayers whose MAGI exceeds the phase-out limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
8. 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 phase-out 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 $7,500 by 0.5. The result is $3,750.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 $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

   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.

9. Does the credit amount differ based on tax filing status?
   No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as “married filing separately” (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
10. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
    In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
11. I heard 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 the entire 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 taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
12. What is the difference between a tax credit and a tax deduction?
    A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 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 $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
13. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    No. The tax credit cannot be combined with the MRB home buyer program.
14. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
    No. You can claim only one.
15. 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.
16. Does the credit have to be paid back to the government? If so, what are the payback provisions?
    Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
17. Why must the money be repaid?
    Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
18. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
    Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.

1. 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.

1. 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 phase-out 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.

1. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 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 future home 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.

National Association of Home Builders September 2008

What is The Hunter Group advantage?

The Housing and Economic Recovery Act of 2008 which was signed in 2008 by then President Bush had some amazing benefits for first time homebuyers. Anyone you know who wants to buy their first home (and that INCLUDES anyone who hasn’t owned one in the last three years), this is too good to miss - it’s a $7,500 tax CREDIT (not deduction- but a credit).

If you have not owned a home in three years, you qualify as a first time home buyer. If you buy a home now through July 1, 2009, you qualify for this credit. Remind any friends who bought a home since April 9th of 2008 that they may be able to take $7,500 off their tax bill if they qualify. It has to be the principal residence, so unfortunately investment/rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500. Understand, this is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit. In other words, you take $7,500 off your tax bill. But there is a catch; the credit you receive now is actually an interest-free loan that must be repaid.

The loan has no interest, and will be paid back over 15 years. You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment. You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year. If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house? You pay the balance back at the closing. So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house. What happens if you do not make enough money when you sell your house? They forgive the rest of the debt.

Other restrictions stipulate that you have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.

If you’d like to learn more about this program, please call us!

Remember the phrase out of sight out of mind? That could also go for portions of your house or townhome. And with these cold temperatures that could cost you big.

For instance, when did you last check pipes underneath your house? Local plumbing companies receive calls almost on a daily basis and have for years at this time of year when the temperature dips.

When the temperature drops to freezing or in the teens for three days or more you have an increased chance your pipes could freeze or even worse, burst.

What you need to do is keep any kind of air contact off your pipes, shut all your doors, shut your windows, shut your garage and close everything up as much as you can to stop that cold air circulating.

You should consider taking additional measures to protect your pipes from bursting.

Experts recommend outdoor faucet protectors and foam pipe insulation- which could save you a bunch of money down the road. And it doesn’t cost an arm and a leg either. These materials are very affordable and readily available at Atlanta area home improvement and hardware stores.

Utility public service alerts often share the following tips to help you stay warm during cold weather.

• Wrap all exposed water pipes and water heaters located outside or in unheated areas of the home with materials designed for that purpose.
• Remove garden hoses from outside faucets. Insulate outside faucets with Styrofoam covers, rags or paper.
• Drip outside faucets 24 hours a day during freezing weather (roughly 5 drops per minute; faster if a hard freeze is expected).
• Open cabinet doors under sinks adjacent to outside walls.
• In unheated garages, shut water off to washing machines. Turn off both the hot and cold water lines and disconnect them from the back of the washer. Place both lines in the drain pipe behind the washer and drip the faucets.
• Businesses and homeowners that operate landscape sprinklers should make sure that these systems have been drained and disconnected.
• Residents who heat with gas can save energy by turning their thermostat down when they leave the house and back up again when they return. It’s just the opposite, however for residents who use heat pumps. They should leave the thermostat at one setting to prevent deployment of auxiliary resistance heaters.
• Consider lowering your thermostat setting by a degree or two. In extremely cold weather, a two-degree decrease on the thermostat setting can save more than 5% in heating costs.

There are other ways to reduce your utility bill on a regular basis.

• Inspect the seals around doors and windows to keep heat inside the home. Caulk or foam around spaces where wiring, water pipes, and other external fixtures enter your home.
• Install a programmable thermostat.
• Change the filter in your heating system. Filters changed monthly help the system work more efficiently.

Experts agree that the two units that contribute the most to the average American’s utility bill during winter months are the heating system and water heater.

What is The Hunter Group advantage?

Tradition dictates that on every January 1, we resolve to make a life improvement, big or small. Improving your home can improve your life, so try to apply some of the most popular New Year’s resolutions to your home.

1. Lose weight. A bit of weight loss goes a long way in a home. Sell, donate, recycle or discard the stuff you never use. When your home is less cluttered, the rest of your life just might follow suit.

2. Quit smoking. If your home is smoking, you need to know about it. Install a smoke detector in each sleeping room in your home, as well as one within five feet of each hallway near bedrooms. Keep your resolution charged all year by changing the batteries in your detectors twice a year.

3. Get organized. A place for everything, and everything in its place — ever heard that one? Organize files, storage areas, and living spaces. Professionals can lend a hand, or you can tackle the job yourself. Either way, your life will run more smoothy when you can find things when you need them.

4. Improve your appearance. You’ll be most content in your home when you’re happy with it aesthetically. Refreshers could range from fresh flowers to improved lighting to new carpet. When you revitalize your home, it revitalizes you right back.

5. Make more money. Small projects can add big profit if you plan to sell your home. Some can be found in simple fixes — a fresh coat of paint, a new rug, less furniture and less clutter. Although the return on your investment depends on your timing and the market, the most profitable changes are a basic kitchen update, a revitalized lawn, an energy-efficient fireplace and a second bath.

6. Save money. Consistent, proper maintenance of your home can save big money in the long run. If ignored, small things like worn washer hoses, clogged gutters or dead tree limbs can become costly problems. A regular maintenance plan can prevent emergency repairs from taking you to the bank.

7. Drink less. Is your energy consumption out of control? You can start with the easy fixes — use compact fluorescent light bulbs, rechargeable batteries and fewer disposable items. Turn off what you’re not using and adjust your thermostat. Bigger ticket items include energy-saving appliances and low-flush toilets. These changes not only decrease your energy bills, they also place fewer demands on the planet’s resources.

8. Go back to school. Attend home maintenance classes and learn about home improvement projects. If you’re calling in a professional, educate yourself about the appropriate processes, know what questions to ask, and then ask them.

9. Try something new. Never hung a picture? Never built a deck? With the right tools and education, you can manage a lot on your own. Set your sights on a project that’s realistic for you and go for it.

10. Spend more time with family and friends. Your friends and family will line up at your door to help celebrate your accomplishments!

Now That It Is Resolved…..

You’ve done a great job finding your resolve. How do you actually keep your resolutions?

• Be realistic. Pick the projects you can actually complete. That might mean breaking a large task, such as organizing the house, into smaller ones — first the garage, then the basement, then the bedroom closets.
• Write it down. Not only does a list help you remember your resolution, it can help you keep your focus. Write down why you chose each resolution and let that be your motivation. A list also can help you see if you’ve made too many promises to yourself to fit into 365 days.
• Plan ahead. Really think about your priorities, time and budget. Keep in mind that major home improvement projects end up costing about 20 percent over budget, on average, so take that into account.
• Know your limits. If you get in over your head, call in a professional to complete the job done safely and correctly.

What is The Hunter Group advantage?