Why First-Time Buyers Seeking the $8000 Tax Credit in Virginia Beach and Hampton Roads Should Beware of Real Estate Short Sales

filed under: Real Estate posted on September 1st, 2009

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Update on real estate short sales in Virginia Beach and sellers may be in trouble.

How many homes are on the market that first time home buyers using the $8000.00 tax credit most likely cannot buy? A whole lot!! When my buyer client states he wants to take advantage of the $8000.00 tax credit that now eliminates many “short sale” homes that would have been viable candidates.

Virginia Beach real estate sellers who are short selling in the lower price ranges (where most first time home buyers are originating from) are rapidly losing potential buyers.

Short Sale Sellers are unfortunately at the mercy of their lender unable to respond to an offer in a timely manner (less than 2 months) because of overload and incompetence.

Read between the lines…..potentially more foreclosures down the road….

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Time is running out for Virginia Beach, Chesapeake, and Hampton Roads First Time home buyers wanting to use the $8000 tax credit. Gaining approval on a short sale at this date may be optimistic.

Real Estate buyers in this category need to find a home that meets their wants and needs but can close quickly.

Virginia Beach and Hampton Roads is seeing an increased number of real estate buyers using the $8000.00 Tax credit incentive. In particular in the lower home price arena, multiple contracts or bids are taking place.

Many of the “good” properties are being scooped up by these buyers not waiting to time the bottom.

Foreclosures continue to be a big part of the market transactions in Virginia Beach, Chesapeake, and other Hampton Roads areas.

Short Sales continue to be a very long and stressful process for potential buyers. Now with the tax credit deadline looming, short sales probably should be avoided by buyers wanting to take advantage of the $8000.00 program. Short sales can be good bargains but the long delays and unresponsiveness by banks and lenders to issue an approval will be detrimental to those first time real estate buyers seeking this credit.

$8000.00 Tax Credit Facts:

1. The $8000 Tax Credit for Real Estate Buyers was approved earlier this year as part of the economic stimulus package, the credit is good for up to $8,000, or 10% of the purchase price, and applies to people who have not owned a home in the previous three years. (income restrictions apply) The best part: Unlike a similar program from 2008, the credit does not have to be repaid.

2. To be eligible for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009

3. Potential buyers may not have owned a home for the past three years to qualify as “first time” buyer.

4. Buyers must also live in the house for at least three years, or they will have to pay back the credit.

5. Buyers must make less than $75,000 for singles or $150,000 for couples. (You can still receive a partial credit if in a higher income bracket.)

6. Applying for the credit. Claim it on your return and no other forms or papers have to be filed. You can also file amended returns for 2008 to claim the credit.

posted by Dennis Blackmore

This entry was posted on Tuesday, September 1st, 2009 at 7:14 am and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.