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There's Still Opportunity to Avail of Home Buyer Tax Credit


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Thursday, February 11, 2010
With the $8,000 first-time home buyer and the $6,500 repeat buyer federal tax credit set to expire on April 30, 2010, buyers and sellers still have time to take advantage of what may be a once-in-a-lifetime opportunity.

In order to qualify for the tax credit, buyers need to have a binding sales contract by April 30 and the home purchase has to be completed by June 30. First-time home buyers are eligible for a tax credit of up to $8,000, while existing homeowners who are thinking of selling their home and purchase another would be eligible for a reduced credit of up to $6,500. Home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase.

Speaking at a recent Silicon Valley Association of REALTORS® Cupertino/Sunnyvale tour meeting, Moise Nahouraii, broker manager of Referral Realty, said in addition to the tax credit incentives, the market is favorable for buyers and sellers because of the following reasons:
 
  • Inventory is declining, pointing to more activity in the market. Data from MLSListings Inc., the multiple listing service of the Silicon Valley Association of REALTORS®, shows as of January 1, 2010, inventory of single family homes in Santa Clara County was at 2,176 homes, a far cry from 5,993 a year ago. In fact, as of last week, inventory was at 2,638, down by over 50 percent from 5,859 last year.
  • Interest rates are still at historic lows, with the fixed 30-year conforming rate ranging from 4.75 to 4.25 percent.
     
  • Affordability is at a record level in Santa Clara County. In the fourth quarter of 2009, the median home price was at $581,000, much more affordable than $800,000 a couple of years ago.
  • Demand for homes is out there not only from first-time home buyers, but also from investors, bargain hunters, homeowners who have wanted to downsize or move up and have been waiting for prices to become more reasonable, and families who have moved here due to a job relocation.
What can buyers do to make sure they can still complete the buying process before the April 30 deadline?
  • Get pre-approved for a loan. A pre-approved loan will enable a buyer to move quickly and make an offer that is not contingent upon obtaining financing.
     
  • Once you are pre-approved, seek the help of a professional REALTOR®. Nahouraii said studies show 97 percent of buyers and sellers first find their information online, but there is value in seeking the help of a REALTOR® afterward because of the REALTOR®'s special knowledge of local information about neighborhoods, schools and comparables. A REALTOR® is experienced with transactions, has contacts like mortgage lenders, title representatives, home inspectors and can help buyers complete the buying process by the April 30 deadline.

The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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