Buying a Home in Salt Lake City, UT

The Housing and Economic Recovery Act of 2008 was signed today and that could mean you or someone you know may qualify for up to a $7,500 Refundable Tax Credit.

But...

Be Informed

There are some strings attached to this tax credit that you may not be aware of:

(Click here for A simple overview of how the $7,500 Refundable Tax Credit for first time homebuyers works)

1. First, the biggie: You may have to pay this tax credit back!

I can hear you saying, "What!?"

Let me explain:

Think of the Refundable Tax Credit as a 0% loan from the Government to you.

You have to repay the government for this loan over 15 years, interest free, beginning 2 years from the year in which you claim the credit. Each year after that, you will pay them back (via your tax return) $500 each year. Or, if you sell the home within the 17 year period, you will pay them back in full in the year of the sale. If you sell the home and there is insufficient profit to repay the loan, the remainder of the loan is forgiven.

So, you get to keep $7,500 today but every year (starting 2 years after you claim the credit) you will either get $500 less back on your return, or will pay the IRS $500 more than normal.

If I have confused you, perhaps the graphic below will help:

The government is banking on the housing market recovering and therefore, when you sell your home, it will have appreciated by more than enough for you to pay them back the amount they "loaned" to you at 0%.

2. If you purchase(d) a home for less than $75,000 your credit will only be equal to 10% of the purchase price, not the full $75,000.

There are some additional exceptions for specific transactions, so make sure you check with your accountant and tax adviser before doing anything. They may also know of additional terms and conditions which could maximize the benefits of the Housing and Economic Recovery Act of 2008 which are not explained in detail in these blogs.

The intent of this article is simply to make you aware of an option you might not have been aware existed, and not to advise you to claim the credit or reject it. All financial decisions should be made in consideration of your specific circumstances and with the advice of your Attorney, Accountant, Tax Adviser and other legal and financial advisers.

If you are planning to relocate to the Salt Lake City area, make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $250,000-$750,000 home in the next 30-60 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

©2008 Homebuyer Representation, Inc.  "The Real Estate Agents on the Buyer's Side" ™ Exclusive Buyers Agents (EBA) - All Rights Reserved

Exclusive Buyer Brokerages do not list homes and never represent Sellers.  Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2008 Homebuyer Representation, Inc. - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

*There is much more to the Housing and Economic Recovery Act of 2008 than the $7,500 Tax Credit for First Time Home Buyers, to learn about other provisions of the Act, click here.

The Housing and Economic Recovery Act of 2008 was signed today and that could mean you or someone you know may qualify for up to a $7,500 Refundable Tax Credit.

A simple overview of how it works

You are eligible if:

You are a first time home buyer (meaning neither you nor your spouse has owned a principal residence (home, townhouse, condo, etc.) in the last 3 years.

You purchase(d) a home "on or after April 9, 2008, and before July 1, 2009".

Your Modified Adjusted Gross Income is less than $150,000 (for married taxpayers) or less than $75,000 (for single or head of household filers) in the year the home was purchased. (If your Modified Adjusted Gross income is higher than those limits, you may still qualify for a partial credit.)

This gives the home buyer a Tax Credit, NOT a Tax Deduction.

A tax deduction reduces the amount being taxed by the deduction amount. A tax credit reduces the amount owed by the credit amount.

The fact that this is a refundable tax credit means that if you owe less than the credit amount, not only would you not have to send in the funds for those taxes, but the difference could be refunded to you (just like over-payments are refunded to you if you so choose). If you owe nothing, the entire credit could be refunded to you.

But...

Be Informed

There are some strings attached to this tax credit that you may not be aware of:

Click here to read on...

There are some additional exceptions for specific transactions, so make sure you check with your accountant and tax adviser before doing anything. They may also know of additional terms and conditions which could maximize the benefits of the Housing and Economic Recovery Act of 2008 which are not explained in detail in these blogs.

The intent of this article is simply to make you aware of an option you might not have been aware existed, and not to advise you to claim the credit or reject it. All financial decisions should be made in consideration of your specific circumstances and with the advice of your Attorney, Accountant, Tax Adviser and other legal and financial advisers.

If you are moving to the Salt Lake City area, make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $250,000-$750,000 home in the next 30-60 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

©2008 Homebuyer Representation, Inc.  "The Real Estate Agents on the Buyer's Side" ™ Exclusive Buyers Agents (EBA) - All Rights Reserved

Exclusive Buyer Brokerages do not list homes and never represent Sellers.  Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2008 Homebuyer Representation, Inc. - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...

*There is much more to the Housing and Economic Recovery Act of 2008 than the $7,500 Tax Credit for First Time Home Buyers, to learn about other provisions of the Act, click here.

In Utah, all it takes to be a home inspector is to call yourself one.

See  Get Gephardt – Worst Home-Buying Fiasco Ever! -

Quotes:

"And guess what, home inspectors need absolutely no qualifications whatsoever in Utah."

"...there is no state agency overseeing home inspectors in Utah.

And it appears anyone can declare themselves a home inspector: with no training, no license, and no experience."

If you are thinking about buying a home in the Salt Lake area, you will want to have your home inspected by a good home inspector. Begin as soon as possible to research various home inspection companies and the services they provide.

Some things to consider:

1. How much time will the inspector spend looking at the house?
2. What is the format of the inspection company's report?
3. What do they charge for the inspection and what do they charge for additional services?
4. What services does the home inspector not perform?

How much time will they spend looking at the house?
Most single family residential homes (5,000 sf or less) require at least 1.5 - 2 hours to evaluate thoroughly. If you home inspector tells you he needs a half hour to evaluate the home, hang up and keep calling.

What is the format of the report?
I bring this up because I have seen home inspection "Reports" that are 2 or three paragraphs long written on lined paper that say something along these lines: "The home is in typical condition for a home of its age in this area. Other homes of the same age in the same area are in about the same condition. " This is ridiculous.

Many "Certified" Home Inspectors ( NAACHI / ASHI, etc. ) have a standard form (or checklist) they use to evaluate the home. This is of more use to the client because you know that in order to fill out the report, they had to at least look at each of the areas they are required to mark or comment on. It is also beneficial because it gives the Buyer a list of items that they may want to address once they move into the home.

There may be (and usually are) some items that the Buyer will ask the Seller to repair prior to closing, but there are some other items that may not be undertaken by the Seller, which the Buyer will want to address soon after closing. A good, thorough report helps the Buyer remember all of those "little things".

What do they charge for the inspection and for additional services?
Fees vary for the base inspection (usually between $250-400) as do the fees for "add-on" evaluations such as radon monitoring, meth testing, lead based paint tests and other evaluations...

Make sure you ask what other tests and evaluations they can perform and what the cost of each is. Doing so can help you determine the total cost of the inspections.

What services does the home inspector not perform?
You may want to find out what items the home inspector does not evaluate or inspect. Many home inspectors will not evaluate a sprinkler system. Others will not fiddle with gas appliances they are unable to light. In some climates at certain times of the year, a furnace or air conditioning unit may not be tested because doing so could cause damage.

You want to find out what the home inspector does not cover so you can hire a professional to look at and assess those items.

If you are planning to buy a home in the Salt Lake City area, make sure you get an Agent on YOUR side of the transaction!

If you have excellent credit and will be buying a $250,000-$750,000 home in the next 30-60 days and would like an agent who will work exclusively for you, call us at (801) 969-8989 or contact us via the link on this page.

©2008 Homebuyer Representation, Inc.  "The Real Estate Agents on the Buyer's Side" ™ Exclusive Buyers Agents (EBA) - All Rights Reserved

Exclusive Buyer Brokerages do not list homes and never represent Sellers.  Their agents represent Buyers ONLY on the Buyer's side of the transaction. They work to get BUYERS the Best Price and Terms when they Buy...

©2008 Homebuyer Representation, Inc. - Salt Lake City, UT

Exclusive Buyers Agents (EBA) - All Rights Reserved

Finally...