So what is the story with the stimulus and the tax credit for first time home buyers anyway? How different is it from the tax credit that already exists?
Originally, a $15000 tax credit was discussed, one that would be open to all home buyers who had not purchased within the past three years. This would have carried a 19 billion price tag. Congress reduced it to $8000. But you still are eligible if you have not owned a home within the past three years.
Congress missed a great opportunity to stimulate many local housing markets. With lower prices, low interest rates, and a large tax credit, first time buyers and those starting over after three years could have had some leverage to enter the market and relieve the backlog of inventory. $8000 is not nearly so dramatic, especially since we’ve got a $7500 credit now. The main difference is that this credit does not have to be repaid. It is also not available to those in upper income brackets.
You can claim the $7500 credit on your taxes you will file for 2008. If you buy now, you can claim the credit on the tax return you file in 2010.
Of course, when you buy your Dallas condo with us, you don’t have to wait to file your taxes for us to cut you our own “stimulus” – we cut you a check at closing. And our check might be larger than $8,000.
Let’s say you buy a Dallas condo at Azure or The Heritage at The Stoneleigh for 500,000. The buyers commission that we collect from the seller will be around $15000. Commission rates and agreements are negotiable, and may vary. But our flat fee for representing you is only $5000. So we cut you a check at closing for the difference, which is $10,000.
But you’re in the price range for about 250K at The Vallera Condos. Well, same math. Assume our commission for representing you, the buyer, is around $7500. But our fee is still $5000, so you receive the difference at closing of $2500.
So lets see – we still have low interest rates for qualified buyers (that’s you) a lot of Dallas condos on the market for the qualified buyer to choose from (again, that’s you having fun house shopping) and now if you are a first time home buyer you get an $8000 credit on your taxes next year (that’s you doing the happy dance in April 2010). AND WE GIVE YOU MONEY BACK AT CLOSING.