First Time Buyer Credit in California Recently Updated
Friday, June 11, 2010
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Just released, the First Time Home Buyer Tax Credit has changed. Yes, already! The fund, at only $200 million dollars, will not last very long and you had better know the new rules to take full advantage of it.
The $200 million dollar fund still allows a credit amount of 5% or a maximum credit of $10,000, whichever is the lesser amount, based on the final sales price. A very substantial credit!
Previously, the first time buyer was required to have the seller of record sign the tax credit form 3549a prior to submitting the application for the credit. However, on June 1st , changes were made for First Time Buyers of previously owned homes.
According to an email I received from Colleen Graves of Lawyers Title in Southern California, a popular Escrow and Title company, chosen by financial institutions selling their bank owned (REO, Foreclosures) properties throughout California,…
….“if you are buying a previously owned home, resale not new construction, then you simply need to provide the basic sale information including the final HUD1 and the seller signature is not required as previously understood.” For my client, who just closed on an REO property, this was great news. Motivating the all too robotic foreclosure minion to get that seller of record signature in time, was not an appealing thought.
The seller required signature rule remains in place for First Time Buyers purchasing new construction properties though.
Taking advantage of the First Time Home Buyers tax credit is the only path for many potential First Time Home Buyers to purchase homes in the Golden State.
Does your home purchase qualify for a first time home buyer tax credit? If you have not owned a home in the previous three years and you plan to live in it as your primary residence…yes! it qualifies.
Another important rule regarding the tax credit form 3549a is that it must be submitted
no more than 2 weeks following the close of escrow. This can become difficult considering the form cannot be submitted prior to the close of escrow due to the HUD1 requirement.
The HUD1 (final closing statement) must be submitted with the form 3549a causing the buyer and buyers agent to be ‘on their game’. If your agent is not aware of the new requirements you could lose your chance to take advantage of this tax credit by submitting the application too late or incomplete.
When you are interviewing agents, to help you buy your new home, ask them if they are current on the ever changing laws, regulations and opportunities in the real estate market place. Some of the recent changes are: multiple agency disclosures, purchase contract change, short sale addenda and tax credit availability.
Related articles by Zemanta
- Realtors Want Congress to Tweak Tax Credit Timeline (blogs.wsj.com)
- Will loss of tax credit discourage home buyers? (sfgate.com)
- New Home-Buyer Credits Aim to Replace Expired Fed Plan (time.com)
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