First time home buyer tax credit explainedThe first time homebuyers tax credit is such a great program which is why I have written numerous posts about the tax credit including … First time home buyers tax credit - what is it, how much is it, and how to get it and how to use the tax credit to come up with a down payment on your first Spring Texas home.

Although sometimes I find a video is a better educational tool than a written blog post which is why I have included this video. A title of FREE MONEY for first time home buyers probably would have garnered more interest in the video than Federal Housing Tax Credit Explained. 

If after watching the video you still have questions about the first time home buyers tax credit you can read the FAQs mentioned in the video or you can give me a call at 281.804.8626 and I would be happy to answer them.

Now I am not a tax accountant but I did earn a B.S. in Accounting degree so I know my way around a financial spreadsheet.  If I don’t know the answer to your question, I will try to hunt down a source to get your question answered.

If you are thinking about taking advantage of the first time home buyers tax credit and why wouldn’t you want to get some FREE MONEY, you probably have lots of questions about the process of purchasing a home.  To help answer some of your questions, I have written a first time home buyers series which explains step by step the process of purchasing a Spring Texas home.  The series should provide answers to a lot of your questions and may even provide answers to some questions you did not even know you had.

Written by:  Jill Wente - 281.804.8626

Right about the time my Spring Texas home buyers are admiring how beautifully the stainless steel refrigerator matches the other the stainless steel kitchen appliances is when they will turn to me and ask “Does the refrigerator stay with the house?”  Usually, my answer is “I am sorry but the the refrigerator does not stay with the house”.

There are numerous items that do stay with the Spring Texas house you purchase and our Texas Residential Real Estate Contract goes into explicit detail outlining these additional items. The items are broken down into the two categories of Improvements and Accessories. 

Improvements are all other fixtures and improvements attached to the property including the following permanently installed and built-in items:  all equipment and appliances, valances, screens, shutters, lighting fixtures, chandeliers, ceiling fans, water softener system, garage door openers, shrubbery, landscaping, and outdoor cooking equipment.

Accessories are fireplace screens, curtains and rods, blinds, window shade, draperies and rods, swimming pool equipment, and artifical fireplace logs.

These items all seem self explanatory but there are other items such as surround sound speakers, playsets, and potted plants that are left up to the interpretation of the buyers and sellers as to whether they stay with the house.  Interpretations of what stays with the house have quickly ended more contract negotiations than what you probably think.

If you are wondering whether an item goes or stays with the house, my advice to you is just ask the seller.  Don’t make any assumptions that could later turn into a heated battle between you and the sellers.

If you are selling your Spring Texas home, my advice is before you put your house on the real estate market take down everything you want to take with you.  If the buyers don’t see an item, they won’t want it to stay with the house.  If you must leave an item out that you are planning on taking with you clearly identify the item as an exclusion on the home’s listing.

Read also:

• Top 30 things to do before putting your home on the real estate market

 Written by:  Jill Wente - 281.804.8626

Pursuant to Texas Property Code 5.008, sellers of residential real estate shall deliver a 
Seller’s Disclosure Notice to the buyer containing the minimum disclosures of the seller’s knowledge of the condition of the property.  When you are considering purchasing a Spring Texas home, a sellers disclosure is a good source of information to learn about the condition of the home.

If you want to know if the home had a previous fire, previous roof repairs, is located in the 100-year Floodplain, or had water penetration just look on the sellers disclosure for the answer. 

But does the sellers disclosure give you everything you would like to know about that Spring Texas home?  Probably Not.  For there are some questions you will need to do a little sleuthing on your own to find the answers.  Including ….

1. Carpet Spots - The sellers may know the carpet looks terrible in certain spots and if you think the furniture placement is a little odd or there are throw rugs in unusual locations lift up the rugs and inspect the carpet underneath.  Sellers are not required and are not willingly going to point out the make-up stain made by their teenage daughter that just never came out.

2. Dogs- Are the neighbors dogs going to bark every time you go into the backyard?   The sellers disclosure does not provides an answer to this question.  So don’t just look out the windows at the backyard. Go out into the yard and walk around to get the answer to your dog question.

3. Planes, Trains, & Trash Trucks - If you are a light sleeper, you would want to know if the noise from planes, trains, or trash trucks is going to keep you from getting a good night’s sleep.  Again, no help from the sellers disclosure.  Do a little sleuthing on your own for these answers by identifying the closest train tracks and airport. You can also give the trash service company a call and find out the time of day they service the subdivision. 

4. Neighbors - Sorry home buyers, the sellers disclosure will give you no insight into what the sellers know about their neighbors.  Too bad because I know some questions I would like answered about the neighbors such as …

• does the neighbor’s son practice day and night because he aspires to be a drummer in a heavy metal rock band.
• do the neighbor’s with the pool host frequent pool parties that continue into the wee hours of the morning. 
• do the neighborhood pets enjoy doing their business in the sellers yard more than their own yards.

Just remember although a sellers disclosure does provide a lot of good information it certainly does not provide everything worth knowing about a home.  As a Spring Texas home buyer, you may need to do a little sleuthing on your own to get your real questions answered.

Read also:

• Is this a good Neighborhood?

If you are thinking about becoming a Spring Texas first time homebuyer, here’s our list of the Top 10 tips on buying a home:

1.  Be choosy but don’t be unrealistic. The only home that comes close to being perfect is one you design and build yourself and still later you will think of things you would have done differently.

2. Establish your priorities before you start searching. Put together a list of the features you would like in a home and categorize each as a “must have” or “nice to have”.

3.  Review your credit.  Now’s the time to review your credit reports to determine if there are any errors that need to be corrected before applying for a home loan.  You can review your credit report for free at www.AnnualCreditReport.com

4.  Get pre-approved first.  Don’t wait until you have found the home for you before you talk to a lender.

5.  Don’t ask an opinion from everybody you know. All the different opinions will drive you insane. If you need support seek advice from one or two of the most trusted people you know.

6.  Decide when you want to move.  When is your lease up? Can you rent month to month? If so how much more will it cost you?

7.  Think beyond next year.  How long are you planning on staying in the home?  Does the home have the space and features to meet anticipated changes in your lifestyle or family. 

8.  Crunch the numbers.  Don’t be “house poor”.  When calculating your monthly budget don’t stop after you have estimated the costs of prinicipal and interest on your home loan, taxes, and homeowners insurance.  Make sure you add in estimations for home maintenance, lawn care, and decorations.

9.  Go in with your eyes wide open.  Don’t skimp by not getting a home inspection. If you were thinking about purchasing a used car you would take it to a mechanic and get his opinion.  A home will cost you significantly more than a used car and you need to have it inspected by a professional inspector. 

10.  Seek help.  The purchase of a Spring Texas home will probably be your largest financial decision. Hire a qualified and experienced buyer’s agent to represent you. The majority of the time buyers agents are paid out of the seller’s commission payment. You have everything to gain with being represented by a buyers agent and all at no cost to you.

Read also:

• First time home buyers series on purchasing a Spring Texas home
• 2009 First time home buyers tax credit - what is it, how much is it, and how to get it

You have heard about the first time home buyer tax credit and you want to take advantage of it by purchasing your first Spring Texas home.  But there is only one small problem, 100% financed mortgage loans are no longer available and that means you need to come up with a down payment. So how do you come up with a down payment for your first home?

First, you need to know how much money you will need for a down payment?

Let’s say you have received loan pre-approval for a $140,000 home. The loan with the smallest minimum down payment requirement is a FHA loan and it is 3.5% of the sales price. Okay so pretty easy math ….. $140,000 * 3.5% = $4,900 down payment required for the loan.

You are going to need a little bit more money though before you can buy your first home.  You will need some money to pay for inspections on the home, to buy a washer / dryer and a refrigerator, and to pay for movers.  Let’s estimate $500 for home inspections, $800 for a washer / dryer set, $800 for a refrigerator, and $500 for movers which totals up to $2,600. 

For the down payment on the $140,000 home and for other costs the total amount of money you need is $4,900 + $2,600 = $7,500.

Second, how can you come up with the down payment and the other costs needed for the purchase of your first home.

1.  Save - Yes, I know saving money is the old fashioned way of how to get something you want and saving does take time.  But there are other options if you don’t think you will have enough money saved in time to take advantage of the first time home buyers tax credit which expires on December 1, 2009.

 2.  Borrow- FHA loans permit home buyers to borrow their down payment from their relatives. A great way to convince your relatives to lend you money is by telling them you will quickly repay the loan. After you close on your $140,000 home, you amend your 2008 tax return and claim the first time homebuyers tax credit. Within 4 to 6 weeks after you send in your amended return a $8,000 check from the IRS should arrive in your mailbox. If you don’t want to deal with the extra paperwork of amending your 2008 tax return, you can claim the first time home buyers tax credit on your 2009 return. The money will just arrive in your mailbox later instead of sooner.

The $8,000 tax credit is phased out for single taxpayers with modified adjusted gross income levels over $75,000 and couples with modified adjusted gross income levels over $150,000.

3.  Increase take home pay- If you believe you qualify for the first time home buyers tax credit, go to your employer and change your income tax withholding.  Reducing your income tax withholding by the $8,000 tax credit will get the money into your paycheck to use for the down payment on your home. If you reduce your withholding and you don’t close on a home by November 30, 2009, then you will be liable to the IRS for the additional money that was not withheld from your paycheck plus interest and penalties.

Before you go running into your employer’s payroll office to change your withholding, I recommend you talk with a lender  and get loan pre-approval to avoid potentially having to pay the IRS interest and penalties.

If you need the name of a reliable lender or you are ready to begin the search for Spring Texas homes, give us a call at 281.300.3141 or 281.804.8626 and we would be happy to help you. 

 Read also:

• First time home buyers series on how to purchase your first Spring Texas home
• 2009 First time home buyers tax credit - what is it, how much is it, and how to get it

If you are going to be a first time Spring Texas homebuyer, you will want to know how long you can expect a home’s components to last.  Because when something breaks and needs to be replaced there is no landlord to call. The financial burden is all up to you to shoulder.

According to a study performed by the National Association of Home Builders (NAHB), the average useful life is

 5 - 10 Years:   Carpet (8 - 10 years), Dishwasher (9 years), Microwave oven (9 years)

10 - 20 Years:   Air Conditioners (10 - 15 years), Water Heaters (10 years), Furnaces (15 - 20 years), Faucets & Kitchen sinks (15 years), Gas Range (15 years), Interior & Exterior paints (15 years), Garage Doors (10 - 15 years), Asphalt shingle roofs: (20 years)

20 - 30 Years:  Tankless water heaters (20 years), Shower Doors (20 years), Interior doors (30 - 50 years), Thermostats (35 years)

30 - 100+ Years:  Kitchen cabinets (50 years), Vinyl floors (50 years), Gutters (50 years), Tile flooring (75 - 100 years), Brick siding (100+ years)

Keep in mind that the actual life of your Spring Texas home’s components will vary from the NAHB’s study. Depending upon how you maintain your home, the quality of the product, and our climate, the product may need to be replaced before the end of its estimated useful life. 

And how long should you expect that wallpaper to last?  FOREVER …  so choose wisely, very wisely.

What is the 2009 homebuyer tax credit?

• A tax credit for eligible first-time homebuyers who purchase either a resale or new home. An eligible first-time homebuyer is a buyer who, along with his or her spouse, has not owned a principle residence during the last three years.

• The full tax credit is available for individual taxpayers with a modified adjusted gross income up to $75,000 and for married taxpayers with adjusted gross income up to $150,000. It is completely phased out for individual taxpayers and married taxpayers with a modified adjusted gross income of $95,000 and $170,000 or higher, respectively.

• A tax credit reduces your tax liability dollar for dollar

How much is the first time homebuyer tax credit?

• $8,000 ($4,000 if married filing separately) or 10% of the purchase price of the home whichever is less.

• Unlike the homebuyer tax credit in the 2008 Housing and Economic Recovery Act, the tax credit DOES NOT require repayment. It is a TRUE tax credit. (FREE MONEY which is even better than interest-free money)

• If you sell the home and net a gain within the first 36 months after you purchased the home, the government wants all of the tax credit you received back. 

• If the home ceases to be your primary residence within the first 36 months after you purchased the home, the government wants all of the tax credit you received back.

How to get the first time homebuyer tax credit?

• Be a first time homebuyer and purchase a home between January 1, 2009 and before December 1, 2009.

• Take the credit on your 2009 Federal Income Tax return or you can take the credit on your 2008 Federal Income Tax return if you file an amended return.

We know this is a lot of information to absorb so if you have any questions give us a call at either 281.300.3141 or 281.804.8626 and we would be happy to answer them.  Don’t let your chance to get some FREE MONEY courtesy of our Federal Government and the opportunity to get a home mortgage at a historically low interest rate pass you by.

Search Spring Texas Homes for sale

Read Also:  If you are a first time homebuyer and purchased a home in 2008, the tax credit which applies to your purchase is different than the 2009. To find out more about the tax credit available on 2008 purchases read - 2008 First time homebuyers tax credit

Read also:

•  First time home buyers series: the steps to purchasing your first home

On February 1, 2009, new state mandated changes for home inspections went into effect.  Although the changes come at the detriment of trees as they will increase the length of the inspection reports, the additional reporting and classification change will result in more informed Spring Texas home buyers. 

Classification change:  Previously home inspectors licensed by the State of Texas were mandated to identify a home’s structural  systems as I = Inspected, NI = Not Inspected, NP = Not Present, and R = Not Functioning or in Need of Repair. But not anymore. The R classification has been eliminated and D = Deficiency is its replacement.

In my opinion changing the classification from R to D has been long over due. Because many a time an issue was marked as R in Need of Repair when a repair was not needed. What was needed was an upgrade to meet today’s building codes rather than an actual repair.

 The R classification caused buyers misunderstandings as they would believe they needed to have the entire home brought up to today’s building codes.  And I do not know of any homeowner, myself included, who once a year hires a home inspector for the purposes of identifying the changes they should make in their home to meet today’s building codes. It is just not realistic.

A D on a report card is NOT so GOOD,  but a D on an inspection report is VERY GOOD. Because the end result is a buyer with a great understanding of his Spring Texas home’s property condition.

Additional reporting:  Previously home inspectors were only required to report some items if they were in Need of Repair. Now there are items the home inspectors are required to report irregardless if the item is a Deficiency including static water pressure, water heater capacity, the location of the water meter and main water supply valve, the energy source of the heating system, cooling system, and water heater, evidence of previous roof repairs, and evidence of water penetration.  

More reporting may mean more home inspectors will be screaming in pain from writer’s cram. But when the pain translates into more informed Spring Texas home buyers, the pain is worth the gain.

Learn more:

• Download the Texas Real Estate Commission revised inspection report
• Read about the home inspector rules and forms

As Realtors®, Rick and I get asked all kinds of questions from home buyers relocating to Spring Texas.  The majority of the questions we know the answer to and gladly provide an answer.

But there are some questions that if we answered we could potentially be in violation of Fair Housing Laws. And there are other questions that instead of answering we would prefer to refer home buyers with the direct source of the information.

Question 1:  What are the demographics of the neighborhood? According to Article 10 of the National Association of Realtors Code of Ethics, “When involved in the sale or lease of a residence, REALTORS shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling”

My Realtor’s license is my livelihood and I can not risk losing it by answering this question.  If you want demographics of the neighborhood, visit the Census’ Fact Finder web site.

Question 2:  Is this a safe or good neighborhood?  I can’t answer this question for you. Not because it is against fair housing laws but because I don’t know what your definition of a safe or good neighborhood is.  If you want to know the crime rates go to the Harris County Sheriff’s Office web site. If you want to know if sex offenders are living in the area go to the Texas Department of Public Safety web site.  Another suggestion is to drive through the neighborhood on various days of the week and at various times of the day to get a feel for the neighborhood.

Question 3:  What are the schools like?  I may know whether the school district has an Exemplary, Recognized, Academically Acceptable, or Unacceptable Rating.  But I do not believe that a school’s rating is the only thing you should consider when determining whether your kids will like and excel at a particular school. I recommend you review the school’s web site of Spring School District, Klein School District, Tomball School District, Conroe School District, or Cy-Fair School District.  And if you really want to find out what the school is like, go visit the school and walk its halls and meet the teachers and principal.

Question 4:   Are there kids in the neighborhood?  According to the training  I have taken on Fair Housing Laws, I can not answer this questions.  But when you are in the neighborhood look for signs of kids such as playgrounds, bikes, balls, and basketball hoops. Also be on the lookout for signs in front yards with a child’s name and a sporting or extracurricular activity on it.

Question 5:  How long will it take me to drive from this neighborhood to my office located at?  I can certainly give you a general answer regarding the commute time.  But since I am not going to be the one driving to your place of employment five days a week, my suggestion is for you to drive it yourself several times before deciding on the home.

Rick and I want to be your go to source for Spring Texas real estate information.  All we ask is that if we say we can’t answer due to the NAR Code of Ethics, please don’t hound us for an answer.