Many buyers are choosing to buy real estate for cash, thanks to low prices, a huge inventory of foreclosed properties, and poor rates of return on other types of investments. In September, 2010, 20.9% of all buyers in the metro-Atlanta area paid all-cash for their property! 

 Although the only legal requirement for a cash purchase is the money, there are several important considerations for a cash buyer:

1.  Home inspection – never buy a property without one;
2. Appraisal – there is no lender appraisal, so this is the only way to insure that the purchase price is reasonable;  
3. Survey – always recommended for small lots and properties in older or urban areas;  
4. Flood zone determination – a lender always checks this, and a buyer should also;  
5. Hazard insurance – always have the property bound with insurance from the closing date (do not put this off);  
6. Termite inspection – a termite problem can be a major expense;  Water bills: look at recent water bills to make sure they are not unreasonably high. A high bill could reveal a leaky or broken pipe;  
7. HOA dues or condo dues – inquire about pending assessments or increases in dues – check the foreclosure rates, owner/occupancy rates, and financial stability of the complex and association;  
8. Owner’s title insurance – this is imperative for the cash buyer, especially when buying a foreclosed or distressed property such as a short sale.

 The rumors are circulating that the Obama administration is trying to throw more money at underwater homeowners.  The Obama plan, which may be revealed on August 17, would help those owners’ whose home is worth less than what they owe on it.

An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of approximately $800 billion!  Will this plan help the politicians or homeowners?  read the entire article  

On April 30, 2010, mortgage rates were 5.125%.  April 30 was the last day to write a contract and be eligible for the $8000 first time homebuyer tax credit offered by the IRS. Today, mortgage rates are 4.375%.

For Atlanta homebuyers who purchased after the tax credit expired, the difference in these rates, for a $300,000 loan, would be a savings of $135/month!  Over a 5-year period, today’s homebuyer would save $8,100 in interest payments, versus the homebuyer who received the tax credit, but closed on a higher interest rate.  

In effect, the market/banks are providing an amazing stimulus to the economy!

Here we go: the state of Georgia has raised many of our tax fees and lowered just a few.

On May 12, the governor of Georgia signed House Bill 1055 into law. Taking effect immediately, it raises the mortgage-per-loan fee from $6.50 to $10.00. This fee is charged on every purchase and refinance HUD-1 statement, as part of borrower’s closing costs. While it is not a huge amount, it is charged on every transaction!

The state portion of the property taxes has been eliminated. Now, all property taxes collected, will go to the county and city where the property is located for their use. However, do not look for lowered taxes there. My guess is that counties and cities will continue to cut services and raise taxes.

However, the good news is that House Bill 1055 eliminated state income tax on retirement income for seniors aged 65 and older.

Many court filing fees and license fees have increased, some by over $100. Real estate recording fees did not change, but civil action fees, corporate fees and other transactional fees are affected. One fee that will affect me directly, is the cost to print information on deeds and legal documents. When I take a  new listing or research property for a buyer-client, the GA county clerks’ site is where I go to look up that information. Their printing fees have doubled because of House Bill 1055!

The bill is 107 pages long and has other provisions. How will it affect you?

This is what we are hearing about the tax credit that Congress passed, as part of the Stimulus Bill:

Q:
 I’m hearing about an $8,000 first-time home buyer credit that doesn’t need to be repaid – is it too good to be true?
 
A:
It’s true. For eligible first-time home buyers who purchased a home after Jan. 1, 2009 and before Dec. 1, 2009, the stimulus bill provides for a refundable credit equal to 10% of the purchase price of the home, up to $8,000.

And, yes, unlike the credit provided last year, this first-time home buyer credit does NOT have to be repaid, unless you sell the home or it no longer is your principal residence within 36 months of purchase.

The Tax Institute has asked the IRS for guidance on how the credit should be claimed on a 2008 tax return until the IRS can update Form 5405 to reflect
the increased credit. 
 
Q: 
 Are there income phaseouts with this first-time home buyer credit?
 
A:
 Yes. The new $8,000 credit begins to phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 filing jointly.
 
Q:
 But what about those of us who purchased a home in early 2009 and took advantage of the $7,500 credit when we filed on our 2008 federal tax return – are we just out of luck?
 
A:
 No, you can still take advantage of the $8,000 credit if you purchased your home in 2009, but you will have to file an amended return to claim the additional credit, up to $500, to which you’re entitled.

You must have purchased your home in 2009, however, to be eligible for the up to $8,000 credit. Homes purchased in 2008 do not qualify. 
 
Q: 
 I purchased my home in 2008 and was eligible for the $7,500 first-time home buyers’ credit, will I still have to repay it?
 
A:
 Unfortunately, yes. Those who purchased homes in 2008 and received the first-time home buyers’ credit are still required to repay the credit over a 15-year period, or sooner if they do not continue to live in the home as their principal residence for the full 15 years.

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