Tax Credit Expanded for Jersey Shore Home Buyers

The $8000 first-time tax credit for Jersey Shore home buyers was scheduled to expire in just a few short weeks…Nov 30, 2009. I say ‘was’, because the Senate voted unanimously to extend the credit on Monday and the House of Representatives approved the extension yesterday afternoon by a vote of 403-12. The extension includes an expanded tax credit to repeat home buyers. The bill now goes to the President for his signature which is expected to happen today. 

Home Buyer Tax Credit Expansion and Extension 

1. The $8,000 tax credit will be extended and available for first-time home buyers through May 1, 2010.
2. A new $6,500 tax credit will be available for repeat buyers who purchase between December 1, 2009, and May 1, 2010. To qualify, buyers must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.
3. Prospective buyers with binding contracts in place as of April 30, 2010, will be allowed an additional 60 days to complete the transaction.
4. Income limits are expanded to $125,000 on a single return and $225,000 on a joint return.
5. Limitation on the cost of a purchased home is $800,000. 

If you know anyone looking to buy their first Jersey Shore home at a time when prices and interest rates are still down, or if you are thinking of buying another Jersey Shore home and getting the new $6,500 credit please contact me today.

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Tips For Buyers Looking To Purchase Their First Jersey Shore Home

Low listing prices, reasonable interest rates, and an abundant variety of homes to choose from are among a few of the reasons now is the perfect time for buyers to make a move in today’s real estate market. Current market trends and other factors have made conditions even more favorable for first-time homebuyers. Though becoming a homeowner comes with huge responsibilities and financial commitments, first-time home buyers should take advantage of the market over flowing with opportunities. The following tips will help ease the mind when considering the smart purchase of your first Jersey Shore home. 

1. Become familiar with the new first-time home buyer federal tax credit.  

People who are considering the purchase of their first home, or have not been home owners for at least the past three years can gain great benefits from the first-time homebuyer tax credit. In February 2009 the American Recovery and Reinvestment Act was put in to effect, offering many new opportunities that lend a helping hand to everyone struggling in today’s times. The new legislation includes everything from home improvement tax credits to the popular first-time homebuyer tax credit. According to FederalHousingTaxCredit.com, qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009 will receive a tax credit of up to $8,000. Unlike past tax credits from 2008, the money received does not have to be repaid, unless the homebuyer sells the property with in three years. 

Efficient Ceiling Fans In Your Jersey Shore Home Can Save Energy and Money

Ceiling fans are one of the most popular and effective ways to conserve energy and save money, especially during the hot summer months. Ceiling fans also provide decorative alternatives to ordinary light fixtures and they are great at multi-tasking. Ceiling fans create a “wind chill effect”, which pushes air downwards creating a cool breeze in the room. Ceiling fans are handy in the wintertime too. In the cold winter months, ceiling fan motors can be reversed. This allows the blades to turn in the opposite direction which pulls cool air upwards and forces warmer air down. Since ceiling fans provide quality décor, lighting and air circulation, they have become one of the most popular home accessories found in multiple rooms of homes everywhere. Making sure your Jersey Shore home is equipped with energy efficient ceiling fans will conserve energy, save money, and maximize comfortable room temperatures. 

While ceiling fans offer many benefits, they can also end up being major energy guzzlers depending on how they are used, the brand, and the type of lighting. If ceiling fans are already installed in your Jersey Shore home it is important to make sure they are an Energy Star model. According to Energystar.gov, ceiling fan and light combination units that are labeled with the ENERGY STAR are approximately 50% more efficient than other fans. ENERGY STAR certified ceiling fans are more efficient because of improved motors and blade designs. Fans that also include ENERGY STAR qualified lighting conserve even more energy and increase the life of light blubs. If your fan does not come with lighting, an ENERGY STAR light kit can be purchased separately. New ceiling fans are over 75% more efficient than older models. If a ceiling fan in your Jersey Shore home was purchased before the beginning of 2002 than it would be a good idea to consider upgrading to newer more efficient model. 

There are several other things to consider when shopping for the right ceiling fan, such as size, lighting, and style. Ceiling fans come in various different sizes. Standard sizes include diameters from 24-72 inches. For averaged sized living and bedrooms, a 52 inch ceiling fan is a popular choice. It is important not to underestimate when trying to determine the right fan size. Since fans have speed adjustments it would be better to go with a slightly bigger fan than to end up with a fan that is not powerful enough. Another thing to consider when picking out a new ceiling fan is décor. Ceiling fans come in a variety of different styles. From contemporary to classic, ceiling fans can be found to compliment the décor of any style room in your Jersey Shore home. 

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Jersey Shore Home Ownership Tax Benefits

New tax code changes create benefits for owners of a Jersey Shore home. For years, many people have usually turned away from considering taking on the financial responsibilities of being a homeowner. Renters and prospective home owners are well aware of all the financial stress that comes with owning a home, which makes them hesitant to make the big step and commitment. What might not be known is that homeowners are receiving more tax benefits now than ever before. The Internal Revenue Services, known as the IRS, has made owning a Jersey Shore home a more favorable option in several ways. 

Monthly house payments bring the biggest tax benefit to home owners. The interest included in the monthly mortgage payments is tax deductible as long as the loan is for less than a million dollars. IRS guidelines also allow deductions for interest on refinancing and home equity loans. However, they do put limits on how much is actually allowed to be deducted. Borrowing against the equity of your Jersey Shore home is an option renters do not have. Renters also do not have the ability to file federal tax deductions on their monthly rental payments. 

Choosing the Best Neighborhood for Your Jersey Shore Real Estate Purchase

Sometimes people have to sacrifice purchasing their dream home for a less perfect home in a better location. The buyer and family’s quality of life can be affected by their surroundings and features a neighborhood has to offer.  Choosing the best neighborhood is just as important as finding the perfect home.  Neighborhoods have numerous characteristics to consider when trying to make the right choice.

One of the most important things to look in to is the quality of schools in the area. Compare various public schools within a school system; some may be better than others. In order to keep all options open, also take a look at private schools in the area. Even if you do not have kids that will attend school, it is still a good idea to pick an area with good schools to help with reselling Jersey Shore real estate.

Another crucial characteristic of a neighborhood to research is the crime. Contact the local police office to find out crime trends, types, and rates. Go online to find out if there are any sex offenders living near by. Do not judge a book by its cover, just because a neighborhood looks well kept and charming does not mean there are not any crime related issues.

Will You Owe Capital Gains When Selling Your Jersey Shore Home

Something to consider when selling your home is the Capital Gains ramifications. Will you owe Uncle Sam money after the sale of your Jersey Shore home? Capital Gains are calculated as the difference between what you paid for your property and what you sell it for. Here is how you calculate your Capital Gains. 

Calculating Capital Gains

(+) PURCHASE PRICE – Price paid for property

(+) COST OF PURCHASE – Transfer fees, attorney fees, inspections

(+) COST OF SALE – Repairs, commissions, attorney fees, inspections

(+) COST OF IMPROVEMENT – Room additions, deck, for example, though not replacing existing

(=) ADJUSTED COST BASIS OF YOUR HOME

(-) AMOUNT YOU SELL YOUR HOME

(=) CAPITAL GAIN 

A Special Real Estate Exemption for Capital Gains

Even though the above calculation may indicate you owe Capital Gains, there is a special real estate exemption. Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a Jersey Shore home is exempt from taxation if you meet the following criteria: 

• You have lived in the home as your principal residence for two out of the last five years. 
• You have not sold or exchanged another home during the two years preceding the sale. 

NOTE: As of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as job loss, divorce, or family medical emergency. 

Learn more about selling your Jersey Shore home by visiting PatrickParkerRealty.com.

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Always consult a tax attorney regarding current tax laws.

Buyer’s Remorse: A Common Feeling When Purchasing Jersey Shore Real Estate

According to Realestate.com, buyer’s remorse is one of the top ten mistakes made when purchasing a home. Finding the perfect home and making the decision to buy a home are not easy tasks. First, you spend hours on the computer researching  Jersey Shore real estate and neighborhoods, perfecting your search criteria on MLS websites, and viewing many virtual tours.  Then, you begin making appointments to go take a look at the ones you think stand a good chance at being the future home of your family. As you walk through the house you envision the happy life you and your family would live and the future décor for this room and that room. You see houses that “require too much work,” “don’t have enough storage,” ones that are “too small” or maybe even one that is “do-able but not perfect.” Finally after weeks or even months of searching, you find “THE house.” Now you send in a promising offer and anxiously wait for feedback. You and seller come to an agreement and the offer is accepted. Once the papers are signed you can relax and enjoy the excitement, right?

Auctions And Foreclosed Jersey Shore Homes

The number of people experiencing their Jersey Shore home entering foreclosure is steadily increasing. Also increasing, is the number of bargains just waiting for home buyers to make a move. In RealtyTrac’s April 2009 U.S. Foreclosure Market Report™ they found that default notices, auction sale notices and bank repossessions were reported on 342,038 properties during the month of April alone. The increasing numbers have contributed to the thirty two percent increase since last year’s April 2008 report. The report also showed one in every three hundred and seventy four homes received a foreclosure filing in April. These statistics prove foreclosure to be a growing threat to home owners. On the other hand, the foreclosure situation is benefiting people looking to purchase real estate in this buyer’s market.

The amount of foreclosure properties on the market opens the door to opportunity for buyers. One way for buyers to take advantage of the opportunity to purchase a foreclosed Jersey Shore home is though an auction. It is important for people, especially first timers, to become educated on how to buy a home at a foreclosure auction. The first place to start would be to look up general information about the process on the internet. Then, it might be a good idea to contact a real estate agent or real estate attorney for professional help and advising.

Investing In Jersey Shore Real Estate To Rent

If you are thinking of buying Jersey Shore real estate and making it a rental property, there are a number of things to consider when choosing the property: 

1. Location

If you will be renting to a year ‘round tenant, look for a property convenient to major employers, schools, shopping facilities, transportation. If the property will be a vacation property, you will want to be near major tourist attractions such as, wee…the Jersey Shore beaches. 

2. Price

If you hope the rental income will be more than the cost of the monthly mortgage, insurance and taxes on the home, you should be careful to invest no more per month than the local rental market can bear. If your goal for rental income is to “break even” or even to have a negative cash flow, price becomes somewhat less important. 

Jersey Shore Real Estate Sales Statistics – June 2009

Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”

Take a look at June 2009 Jersey Shore real estate sales statistics compared to June 2008 for Bradley Beach, Avon-By-The-Sea, and Belmar:

Bradley Beach Real Estate

Homes Sold May 2008: 3
Average Sales Price: $590,000
Average Days On Market: 35

Homes Sold May 2009: 2
Average Sales Price: $282,500
Average Days On market: 72

Avon-By-The-Sea Real Estate

Homes Sold June 2008: 0
Average Sales Price: 0
Average Days Oo Market: 0

Homes Sold May 2009: 0
Average Sales Price: 0
Average Days On Market: 0

Belmar Real Estate

Homes Sold May 2008: 3
Average Sales Price: $610,000
Average Days ON Market: 104

Homes Sold May 2009: 9
Average Sales Price: $826,777 
Average Days On Market: 92

Although no single family homes sold in Avon-By-the Sea in June and Bradley Beach sales declined, sales tripled in Belmar while market times decreased.

Wouldn’t you like to summer in your own Jersey Shore home? It’s not too late to take advantage of moderate prices. If you are thinking year-round rather than vacation home, you can use your $8,000 tax credit towards closing costs. Visit Patrick ParkerHomes.com to learn how.