Archive for August, 2009

8/1/09-8/7/09

The following 8 properties went under contract this past week in Basking Ridge, that is five more contract sales than last week; I don’t think we are going to see much of an August slow down this year! 

82 Alexandria Way listed for $268,000
34 Smithfield Ct listed for $279,900
191 Irving PLace listed for $305,000
5 Brook Ave listed for $399,000
16 Prescott Court listed for $437,000
75 Dorchester Drive listed for $549,900
88 Cherry Lane listed for $599,000
7 Carlisle Road listed for $699,000

There are an additional 14 properties that are working through attorney review.

Please contact me if you would like more information about any of these Basking Ridge homes or visit my Basking Ridge real estate website for more information on what has sold each month over the past year.

New to the Basking Ridge market are the following 12 properties (note that some of these have been available for quite some time but have been relisted):

49 Smithfield Court listed for $236,000
72 Commonwealth Drive listed for $284,000
67 Countryside Drive listed for $349,900
7 Plymouth Court listed for $499,000
11 Cannon Court listed for $509,000
120 Lyons Road listed for $519,999
138 Patriot Hill Drive listed for $679,000
25 Benedict Crescent listed for $694,999
49 Juniper Way $699,900
98 Washington Ave listed for $789,000
6 Chelsea Court listed for $1,749,000 (has been For Sale By Owner for a LONG time)
16 Prescott Court listed for $437,000 (already under contract!)

As of this afternoon, there are a total of 221 listings showing active in Basking Ridge in the MLS.  With 39 going under contract in the last 30 days, Basking Ridge market absorption is 6.14 months (up from last week which was 5.97 months.

Please contact me if you would like more information about any of these Basking Ridge homes or visit my Basking Ridge website to sign up for listing alerts in and around Basking Ridge.

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The Liberty Corner Fire Company welcomes it’s newest addition:

Measuring 47 feet long, weighing 40 tons, and boasting a 100 foot high LADDER:

Until now the fire company had to rely on the Lyons VA Medical Center or the Far Hills-Bedminster fire company when there was a need for a ladder truck.  The Lyons truck is about to be decommissioned, and waiting for a neighboring community may waste precious moments when help is needed.

Visit my website for more information about exciting community events.

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Q. What is the credit?

A. The first-time homebuyer credit is a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.

The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date.

Q. How much is the credit?

A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more ($80,000 if purchased after Dec. 31, 2008, and before Dec. 1, 2009).

Q. Which home purchases qualify for the first-time homebuyer credit?

A. Any home purchased as the taxpayer’s principal residence and located in the United States qualifies. You must buy the home after April 8, 2008, and before Dec. 1, 2009, to qualify for the credit. For a home that you construct, the purchase date is considered to be the first date you occupy the home.

Taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase. If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 or 2009 income tax return.

Q. Can I apply for the credit if I bought a vacation home or rental property?

A. No. Vacation homes and rental property do not qualify for this credit.

Q. Who is considered to be a first-time homebuyer?

A. Taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase.

Q. When do I have to buy a new home to get the credit?

A. The home must be purchased after April 8, 2008, and before Dec. 1, 2009, in order to obtain the credit. For a home you construct, the purchase date is considered to be the date you first occupy the home.

Q. How do I apply for the credit?

A. The credit is claimed on new IRS Form 5405, First-Time Homebuer Credit, and filed with your 2008 or 2009 federal income tax return.

Q. Are there income limits?

A. Yes. The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income (MAGI). For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. This means that the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.

Q. Can a taxpayer claim the first-time homebuyer credit after entering into a contract for the purchase of a residence but before closing on the purchase?

A. No. Taxpayers cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase. (New 7/2/09)

Q. Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example, a contract for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer’s payment obligations?

A. If the taxpayer obtains the “benefits and burdens” of ownership of a residence in a seller financing arrangement, then the taxpayer can claim the credit even though the seller retains legal title. Factors that indicate that a taxpayer has the benefits and burdens of ownership 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. (New 7/2/09)

Q. I purchased a home that qualifies for the first-time homebuyer credit. I will be renting two of the bedrooms and reporting the rental income on Schedule E. Will I still qualify for the credit if I use the home as my principal residence?

A. Yes, if you meet all first-time homebuyer eligibility requirements. See Form 5405, First-Time Homebuyer Credit, for more details.

Q. If two unmarried people buy a house together, how do they determine how much each may take of the credit?

A. IRS Notice 2009-12 provides guidance for allocating the first-time homebuyer credit between taxpayers who are not married.

Q. I am a single co-owner of a home. How do I get this credit?

A. Depending on the year of purchase, you will claim the credit on either your 2008 or 2009 federal income tax return.

Q. I don’t owe taxes and/or my income is exempt from tax and I do not have a filing requirement. Do I qualify for the credit?

A. The credit is fully refundable and, if you qualify as a first-time homebuyer, having tax-exempt income will not preclude eligibility. Although there are maximum income limits for qualifying first-time homebuyers, there are no minimum income criteria. Thus, someone with no taxable income who qualifies as a first-time homebuyer may file for the sole purpose of claiming the credit for a refund.

Q. Does the first-time homebuyer credit apply to homes located in the U.S. Territories?

A. No.

Q. Would I be considered a first time homebuyer if I owned a principle residence outside of the United States within the previous three years?

A. Yes. A taxpayer who owned a principal residence outside of the United States within the last three years is not disqualified from taking the credit for a purchase within the United States.

Q. If qualified, are homebuyers required to claim the first-time homebuyer credit?

A. No.

Q. Who cannot take the credit?

A. If any of the following describe you, you cannot take the credit, even if you buy a new home:

Your income exceeds the phase-out range. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.

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, 2008, 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, 2005, through July 1, 2008.

Q. Does previously inheriting a home and living in the inherited home automatically disqualify an individual as a first-time homebuyer with respect to a different home that is purchased within the prescribed 2008 and 2009 time frames?

A. Yes, an ownership interest in a prior principal residence would preclude the taxpayer from being considered a first-time homebuyer. As long as the taxpayer owned and used the prior home as his principal residence, then he is not a first-time homebuyer. There is no exception for taxpayers who did not buy their prior residences. (05/06/09)

Q. Is a step-relative considered a related party?

A. Step-relatives are neither ancestors nor lineal descendents and are therefore not related persons for purposes of the first-time homebuyer credit. (05/06/09)

Q. If I claim the first-time homebuyer credit in 2009 and stop using the property as my main home before the 36 month period expires after I purchase, how is the credit repaid and how long would I have to repay it?

A. If, within 36 months of the date of purchase, the property is no longer used as the taxpayer’s principal residence, the taxpayer is required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be the taxpayer’s principal residence is due. The full amount of the credit is reflected as additional tax on that year’s tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit. (05/06/09)

Q. If a person does not actually make the payments on a home that’s their primary residence, but the deed and mortgage documents are in their name, can they be considered a first-time home buyer?

A. Yes. If a taxpayer purchases a home to be used as a primary residence from an unrelated person and has not owned a home within the previous 36 months, the taxpayer is eligible for the first-time homebuyer credit regardless of who makes the mortgage payment. (05/06/09)

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On Tuesday, the National Association of Realtors (NAR) reported that pending home sales rose in June for the fifth straight month. The last time there were five consecutive monthly gains was July 2003.

Lawrence Yun, NAR chief economist, attributes the gains to a combination of positive market factors. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines,” he said.

Search here for listings in Basking Ridge and surrounding areas.

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I am working with first time home buyers who are considering making an offer on a townhouse in Society Hill, Basking Ridge.  So I spent this evening working on a market analysis to determine if the list price on the unit they like is within the boundaries of reality.  The unit has been on the market for quite some time and is not in the best condition.  The agent shared with me the seller’s bottom line.  Knowing that certainly helped – and I actually think that their bottom line reflects a nice deal, even with the elbow grease that the unit needs. 

I had to go back beyond 12 months to find another sale to compare to the large three bedroom unit that is on the market on Baldwin Court; but for the two bedroom units there was a lot to go by – that seems to be the most popular model recently.  Most likely because they account for a larger percentage of the types of units and since they are small, the turn over more frequently.  Interestingly enough – there have been three sales in the last 30 days of the two bedroom model - that leaves only my listing and one other still available, could my clients be the next lucky sellers?

I thought I would share the Society Hill Market Analysis that I put together – please let me know if you have any questions.  I am happy to send you information about other properties available here in town,  or click here to search available town houses in Basking Ridge.  (Please forgive my spacing issues – my webmaster is on vacation!!)

Sts	Address		Bed	Style	List Date	LP/SP	DOM	UC Date
A	261	PENNS WAY	3	Interior/back kitchen	7/29/2009	$325,000	6
A	6	BALDWIN CT*	3	Interior/sunroom	4/1/2009	$344,900	125
A	406	Penns Way	3	Interior/sunroom	3/23/2009	$365,900	134
A	309	ENGLISH PL	2	Interior	7/6/2009	$289,000	29
A	287	PENNS WAY*	2	End Unit	9/18/2008	$298,900	320
A	37	WOODWARD LN*	2	Interior	7/6/2009	$304,900	29
UC	191	IRVING PL*	2	End Unit	5/2/2009	$305,000	93	8/3/2009
UC	430	PENNS WAY	2	Interior	4/25/2009	$290,000	76	7/10/2009
UC	286	PENNS WAY*	2	Interior	5/7/2009	$299,900	81	7/27/2009
UC	269	Penns Way	2	Interior	5/13/2009	$295,000	36	6/18/2009
S	444	Penns Way	3	Interior	2/9/2009	$340,000	87	5/7/2009
S	192	IRVING PL*	2	Interior	3/15/2009	$285,000	23	4/7/2009
S	195	Irving Place	2	Interior	2/27/2009	$280,000	18	3/17/2009
S	355	PENNS WAY*	2	Interior	2/3/2009	$242,000	31	3/6/2009
S	62	Woodward Lane	2	Interior	6/14/2008	$270,000	249	2/18/2009
S	392	PENNS WAY*	2	Interior/sunroom	7/21/2008	$300,000	184	1/21/2009
S	64	WOODWARD LN*	2	End Unit/sunroom	7/28/2008	$330,000	22	8/19/2008
S	295	PENNS WAY*	2	End Unit	6/5/2008	$300,000	42	7/17/2008
S	158	WOODWARD LN*	2	Interior	3/6/2008	$275,000	127	7/11/2008

Remember, these units make great first homes!  Take advantage of the first time home buyer credit if you qualify – time runs out at the end of November!

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When selling a home, it helps to make the property as appealing as possible given the current season.  The summer is no exception.  Spending a little extra time and effort to create a summer-friendly atmosphere might be just what is needed to help potential buyers envision living in the home and ultimately make an offer.

Here are some tips to help your home shine during the summer:

• Go Green.  There is no escaping the fact that your yard will always make the first impression. To start off right with potential buyers, keep your lawn well maintained. Make sure shrub beds are free of weeds and full of mulch.
• Let the sun shine.  While keeping window coverings closed might keep energy costs down, it also creates a more depressing atmosphere. Sunlight makes a home feel bright and makes people feel happy. Open the window coverings for any window that doesn’t have a bad view.
• Set the scene.  Stage your yard in a way that buyers can see the potential it has as an outdoor living space. Put out a few lounge chairs. Rearrange the patio furniture. Add some potted plants. Clean up any clutter.  Make your yard a place buyers want to spend time in.

I am happy to help you understand the value of your home in today’s market.  No obligations, just information!  Contact me today.

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