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Ways To Increase the Value of Your Offer without Increasing the Purchase Price

The first one is you could definitely waive the appraisal contingency. You could also do a free rent back.

Second, waiving some and/or all inspections. If you feel comfortable enough, you could waive any and all inspections of the property. Or if you don't wanna waive all the inspections, you could put a cap on how much inspections you're gonna ask for after you do get those inspections back.

Third, buyer paying all closing costs and also title transfer fees. Instead of asking the seller to pay your closing costs, you could pay those closing costs on your own, and you can talk to me about how you could do that in getting enough money to cover those closing costs.

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Fourth, non-contingent sale. And so if you are looking to sell your home, when you go to make the offer, talk with your lender and ask them if you can do a non-contingent sale.

The last one, is a commitment to use a local bank, a local lender in your area that you wanna purchase.

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Tax Credit Update

I wanted to share some information about the tax credit that Congress will be potentially introducing and getting this bill passed for a tax credit.

The first thing is this tax credit is up to $15,000. You may have remembered back in 2010, 2009, when they introduced the tax credit before, is the first time they had done something like this, you got up to $8,000 on a tax credit but this one is 10% of the purchase price or up to $15,000 maximum.

The second thing is it will probably have income limits, and they're saying it's gonna be about 160% of the median income for the area. Our median income here in Shasta County is about $69,000 per year.

The third thing is you have to stay within the median home price range of what the average sales price is here in Shasta County. You must be 18, you must be a first-time home buyer and it has to be your primary residence.

There's a recapture period. What this means is, if this bill was passed and if you purchased a home, and you got this $15,000 tax credit, then if you sold your home within four years, you'd have to pay some of that back, every year, if you sold your home within one year, you'd have to pay back 75% of the tax credit. If you sold it in two years, you'd have to pay 50%, and so on. So 25% a year. So after four years, it becomes completely forgivable.

This bill, it's actually retroactive, so it's retroactive back to January of 2020. So if you purchased a home in the last year and a half after January of 2020, then you would potentially qualify for this tax credit.

So there's another tax credit that in addition to this one that they're also talking about, which is a $25,000 grant that they want to give to, they call them, first generation home buyers.

It's a great time to purchase, and I hope you guys are doing great and we'll talk to you guys very soon. Hit me up if you have questions.

Frequently Asked Questions

How are you eligible for tax credits?
You are eligible for this potential tax credit if it passes through the house and also the Senate for approval. The president already said he would sign in if it passes. Also, you qualify if you are a first-time buyer. A first-time buyer is someone that has not owned a home in the last 3 years. The borrower needs to have an income that is < 160% of the area's median income. The area medium income for Shasta County according to FNME income limits is $69,500 https://ami-lookup-tool.fanniemae.com/amilookuptool/. Also, the home should be at or below 110% of the area median purchase price. The area medium purchase price for Shasta County is $292,295.
How much can you earn and still get tax credits?
In Shasta County, a family can make up to $111,200 and still qualify for the $15,000 tax credit if it gets approved.
Do you get a tax credit for buying a house?
Yes. This tax credit is for first-time buyers and will be given in form of a credit to the taxpayer.
How much do you get back from taxes for buying a house?
10% of the purchase price or up to $15,000.
Is there a tax credit for buying a house in 2021?
Not yet. If the bill passes then the tax credit would be retroactive to family’s that purchased a home after January 1st, 2020.
How does the 15k tax credit work?
After purchasing the home the borrower needs to make sure they keep their closing disclosure. When they file their next year's tax returns they would give this closing disclosure to their tax professional. The IRS would then credit the borrower the tax credit.
Do you have to pay a tax credit back?
Yes and No. If the homeowner stays in the home for longer than 4 years, the credit because fully forgivable. Each year the borrower owns the home 25% of the tax credit gets forgiven. For example: if the homeowner sells the home after 2 years of getting the credit they would pay 50% of the tax credit back to the IRS.

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 (530) 221-7700

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pete@vonmortgage.com

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