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First-Time and Move-Up Homebuyers:  Just 37 Hours Left!!

FIRST-TIME HOMEBUYERS

With the first-time and move-up homebuyers tax credit about to expire, realtor's offices throughout South Central Wisconsin have been buzzing with information about how to help those who are getting into the game a little later than is comfortable for most.

If you're one of those who is first starting the process of buying a home now, it's important to remember that this is most-likely the largest financial decision you'll make in your entire life. 

Marry that with the emotional component of actually enjoying coming to your new home and this is not a decision you want to rush!  Yes, the $8,000 incentive if you're first buying a home now is certainly nothing to sneeze at, but compare that to spending $8,000 more on a home you truly love and want to keep for a long time and it becomes a less-serious contingent in your decision.

REMEMBER:  Just because you purchase a home now, you only get to keep that $8,000 if you A) Maintain that home as your primary residence; and B) Live in that home as your primary residence for more than 36 months.

MOVE-UP HOMEBUYERS

For the Move-Up Homebuyer, you're probably looking to cash in on your $6,500 credit.  Many of the cases that have come across my desk are those people who are looking to buy a home, but also need to sell their current home.  For you, the $6,500 is a considerable amount.  If you feel your home is worth $200,000 and you receive an offer for $195,000 and you've already received an accepted offer (with a bump clause) for the home you want to move to, you can accept the offer for $195,000 realizing that after you amend your 2009 Tax Returns you'll receive the $6,500 making the sale of your home $201,500.

There has been some buzz about the Move-Up Buyer Credit being extended, but the reality is that it most-likely won't be.

The other MAJOR consideration here is that while $6,500 is certainly a lot of money to consider chances are - given the average home value in South Central Wisconsin - that the $6,500 tax credit represents less than 5% of what you've put into your home so far.

While you've made decisions similar to these in the past, there's no doubt that the decisions you make now will have far-reaching impacts in your financial future.

WHAT TO DO NEXT?

If you've already received an accepted offer on a home, continue through with your inspection(s), appraisal and the other steps necessary to close on this home prior to June 30, 2010.

If you haven't made an offer on a home because you're attempting to decide which home you've seen with your Realtor best, you're just about out of time and it's now time to make that decision.  If your offer is countered after Friday, you are not eligible for the tax credit.

If you haven't begun to look, there's a LOT to do.  You need to get pre-qualified, sit down with a Realtor and then go through properties until you see one you want to live in.  You'll need to put an offer in ASAP so that if your offer is countered you have enough time to either withdraw or place an offer on another property.  If you have to go back out to look at more, don't be surprised if you miss the deadline.

THE MOST IMPORTANT PIECE OF INFORMATION YOU NEED TO KNOW:

If you're a first-time homebuyer purchasing a home for $150,000:  The $8k tax credit represents less than 5.3% of the purchase price.

If you're a move-up homebuyer purchasing a home for $250,000:  The $6,500 tax credit represents less than 2.7% of the purchase price.

The percentage of savings versus getting what you want and will truly love is the biggest consideration to account for when choosing what you will do.