California home buyer $18,000 tax credit

[Trijack]

Can you believe this! 8,000 tax credit from the government and 10,000 from state of California.
I am a real estate broker and even I think this is bad.

Government is broke and California is broke
When you make an offer on property here, there will be up to a dozen other offers. I made my 18th offer for one client that I have and they pay all cash.
We have closed 4, that is how tough it is.

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state home buyer tax credits. To take advantage of both tax credits, a first-time home buyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time home buyers may use the same time frames to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

[delayjf]

Trijack,

According to one mortage banker I talked to here in CA, the people who are getting the loans to purchase these homes are those investors willing to put up 20 - 30% down payment. As you are in the business, can you confirm?

[Trijack]

When one makes an offer , cash rules if there are other offers, 20% down is next best then on down to 3% down FHA. I got one offer accepted for all cash and another offer with 10% down and 7,000.00 higher than mine was rejected.

I just had another all cash offer rejected. Someone with 10% down and 4,000 higher was accepted.

I would say that is true where investors who put 20 to 30% down are getting a lot of these homes.

[skate]

Trijack;

That is an extremly tough way to buy a house. Almost like an auction, but (?) you don't know the amount of the other bids.


So, if you like the property, you'll bid over the ask.

Also, i believe, banks changed the rules for small business owners (maybe others also), one example, you must have your business for at least 2 years.

And if not mistaken, that $8,000 fed ruling is not just a deduction but a REAL refund , of which you never paid in the first place.
If that's the case, does Calif. refund work the same?

[Trijack]

Skate

You don't know what the other offers are when you submit yours but most agents like to deal with all cash offers and they sometimes call me up to see if my buyer will raise his offer The one we got where someone had offered 7,000.00 more with a conventional loan, my buyer refused to raise his offer but we got ours accepted if we could close in 7 days and we did.

In the one we lost out on where they offered 4,000.00 more, the agent called me to see if we would come up some more as agent wanted our cash offer but buyer refused and we lost out.

Market is not like the old days where "time was of the essence" and we got an answer the same day. They now hold all offer for 3-5 days and then present to seller.

Yes the Federal is a refund whether you owe taxes or not. It goes on the 1040 line 57. I am assuming the state will work the same except they are going to give it to you over a 3 year period.

[skate]

Trijack



Thanks, and one other thought, if the bank owns the property, who pays the agent and at what %, thanks again,

[JustRalph]

How in hell can California afford this?

Wait until they start issuing IOU's again...........

[masterpeg]

I took advantage of this opportunity to buy my first house. It worked for me.

[delayjf]

Masterpeg,

I know one fella who bought a home in Perris cheap - 2400 sq feet for @ 150K. Lots of good deal over the Saddleback Mts.

[Trijack]

Skate

The bank pays the commission.

By the way one house that my buyer purchased sold for over 700,000.00
3 years ago he got for 262,500.

4 of the houses that I have sold to this investor have been in Riverside county.
This investor is getting a return of 8-10% on his money which is better than the 1 or 2 % on a CD

On a regular sale last year I moved another client from 2 units in Cypress to 4 units in Anaheim. Sold her 2 units for 365,000 all cash and she purchased 4 units in Anaheim for 490,000 in an exchange transaction. The 4 units were owned by a Fannie Mae lender and they paid me 4%.

[JustRalph]

I had a girlfriend in Perris once............nothing Cheap about her

One great memory.........

[chickenhead]

I've been listening for awhile to hedge fund guy, he's been accurate for several years now, Hussman. He keeps showing the chart of the number of option ARM resets, we have been in a lull for half a year, but are just entering a second big hump of them that will last throughout the year -- the tail end from the last big glut of them to get issued.

With the combination of so many underwater peeps, a whole bunch of resets, the fed rebate expiring, and pulling their purchasing of securitized mortgages which should cause rates to bump up -- I'm not too certain we aren't about to enter a period throughout the rest of the year of high foreclosures once again.

Doesn't take much movement on a house price to wipe out $18K pretty quick.

[skate]

yah, it's a tough call from here. but i think the high price house ($500,000.. ?) should not be included, as a mater of fact, i would think a limit on how many you purchase should have a cap of 1.


On the other hand, the money flow is good for everyone. let's roll.

[skate]

Trijack


i was interested in the rate, because back on the Esat Coast, it is, and has almost always been at 6%.

While out West ( i don't know where the cut off, (geographic) is' the rate is 10%.

[Trijack]

Skate

Most of the time the commission is 6%, 3% to listing agent and 3% to selling
agent.

On the units I sold I got 4%, I do not know what the listing agent got as the listing only shows what the selling agent gets.

[Relwob Owner]

Trijack


i was interested in the rate, because back on the Esat Coast, it is, and has almost always been at 6%.

While out West ( i don't know where the cut off, (geographic) is' the rate is 10%.



Hey guys,

Just found this...awesome info. In the Mid Atlantic, it is normally below 5 percent for the bank owned props.....they are giving 1.5 to 2.5 to the listing agent and the selling agent fee is almost always 2.5