WHY REALTORS OVER FSBO?                                                                                                                   Source: The KCM Blog

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It's hard to resist commenting on the story which recently appeared in the Wall Street Journal regarding Colby Sambrotto, the founder and former CEO of forsalebyowner.com. It seems the founding father and lifelong evangelist of the concept of selling your home without a real estate agent was forced to hire a broker to sell his home after failing at what he preaches others should do.

After failing to sell his NYC apartment on his own as a For Sale By Owner (FSBO), Sambrotto hired a broker and paid a 6% commission in order to get the job done. His personal experience helps refute some of the myths Sambrotto has been espousing for over a decade. Let’s look at two of those myths:

 
Myth #1 – You Will Pocket More Money Selling on Your Own
 
Most FSBO sites say you can save the commission by selling on your own. What happened in Sambrotto’s sale?
 
From the WSJ article:

“The broker, Jesse Buckler, said he told Mr. Sambrotto the apartment in the Lion’s Head building on West 19th Street near Sixth Avenue was priced too low and wasn’t drawing the right buyers.

By May, it went into contract, he said, after attracting multiple offers. It closed in the last few days for $150,000 more than the original asking price.”

 
Myth #2 – The Internet Alone Can Sell Your Home
 
Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. What happened to the FSBO guru when he attempted to only depend on the internet?
 
From the WSJ article:

“Looking to move his family to the suburbs, [Mr. Sambrotto] said he carefully staged his apartment for sale himself, and put it on the market. But after using a mix of websites to publicize his apartment, he said he had only ‘middling success’ and switched to a broker because many buyers were so reliant on brokers.”
 
Bottom Line:
 
There is a reason the real estate industry has been around for centuries: it performs a valuable service.

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How well do you know your Realtor?  These statistics, compiled through member surveys of the National Association of Realtors, show the averages for those who participated.  As an involved member of Greater Louisville Association of Realtors (GLAR) and the Kentucky Association of Realtors (KAR), I thought these numbers were a little low.  

At Cornerstone Group Realtors we emphasize education, both continuing professional education and designations.  Our Realtors hold the following Designations: E-Pro, Accredited Buyer's Representative (ABR), Graduate of the Realtor Institute (GRI), Senior Real Estate Specialist (SRES),  and Eco-Broker as well as having spent many class hour learning to assist our clients with the issues of distressed properties.    

 

Hours worked by all REALTORS® (nationwide): 40 per week

Gross personal income by hours worked: $48,000 (median for 40-59 hrs.)

Percent of business generated by REALTOR® personal web site (all REALTORS®): 

• Zero: 37%
• Over 25%: 10%

Real estate experience of all REALTORS® (median): ...

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 As an integral part of the earth's eco system, insects and other pests are each beneficial in their own way, but also problematic when they infest a house. Spring is the season when folks have to be vigilant to the stepped-up activity of insects such as ants, spiders and termites. Some can cause damage to your home’s structure while others can cause bodily harm. Some can spread diseases while others just bite.

One insect that has been a problem for centuries is the bed bug. The extensive use of pesticides that began back in the 40s helped to reduce bedbug populations through the proceeding decades, but the use of certain insecticides decreased due to environmental and health hazards.  Since then, the rate of travel and the incidents of bed bug infestations have increased dramatically.

Adult bed bugs grow to be small, oval, wingless insects that reach about 1/4 inch in length. They’re flat, reddish-brown bodies may be mistaken for a tick or small cockroach. They don’t develop wings, so they can’t fly. They do their thing mostly at night – biting unsuspecting victims as they sleep. The bit itself isn’t painful, but the saliva injected under the skin could lead to itchy, swollen areas, which can become infected when scratched.

The bed bugs are crazy hitchhikers sometimes latching on to consumer products like new clothing.  While sanitation is a factor, bed bug infestation can be found in any home. Mattresses, box springs and other upholstered furniture are primary targets, but folks and exterminators are finding them even in places like televisions sets, computer keyboards and electric switches.

They reproduce quite rapidly; female bed bugs can lay five eggs a day. Newly hatched nymphs are a little more than a dot. They can reach maturity in a month or so and feed on blood from humans or animals.

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Yesterday I attended a class/lecture on the hazards of lead in older homes and what the new EPA rule will mean for families who want to renovate or for sellers with homes that require repairs.

The lecture was delivered by on of our top renovation company's owner and an attorney from one of our leading real estate legal firms. As a Realtor I feel it's important to learn as much as we can about rule changes that directly affect our clients.  This could have a significant impact on buyers and sellers.  As a Broker, I need to make sure my agents are knowledgeable about safety issues.

Buyers and especially those with young children, need to be aware of the hazards of lead in paint and possibly other building materials. Although it is much less a problem unless it is disturbed, what constitutes disturbed is important to know so the proper precautions can be taken.  

We also learned about how important it is for Realtors to inform their clients that if they find a home that need repairs that will be done by the seller, those repairs need to be handled following the new EPA guidelines if the they disturb areas containing lead.  

Sellers have it a little easier.  If a seller is working on his personal residence, the rule are not as strict, but they still need to be aware to protect themselves and to properly clean and area after work is completed.  Although we focus on the danger to children, lead can have adverse effects everyone.

If you have any questions regarding the new EPA rules you can contact us any time.  We can provide brochures and renovation guides.  You can also check out www.epa.gov/lead/pubs/brochure.htm.

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 Getting your home ready to sell in a flooded market.

Once you've decided to list your home there are few things to consider.  First is how you're going to compete in the marketplace.  Today there are almost twice the number of listing as 4 years ago.  Hard to believe with the market being what it is, but the reality is there are many more option for buyers including distressed and updated homes.  If you're planing to get top dollar for your home, your Realtor will go through your home with your and objectively point out the deferred maintenance items that need to be addressed before your ready to sell.  

If some of those items are beyond your capabilities, it may be necessary to hire a handyman or contractor.  Below are 10 Tips for Hiring a Home Remodeling Contractor.

RISMEDIA, October 16, 2010-- 
Through advice and stories shared by both contractors and consumers, StageofLife.com, a blogging resource for homeowners, discovered 10 important tips on how to find a trustworthy home remodeling contractor to help ensure the right person or company is hired for your next home improvement project.

Tip #1: Does Your Contractor Have Proof of Insurance?
Ask the contractor to have his insurance company mail or fax a copy of his current contractor insurance card to you. If the contractor can't do this - stay away. Why? If there is an accident at your home, you are then liable. This also applies to any sub-contractor or employee that the contractor may use - those individuals should have active insurance cards faxed or mailed to you as well.

Tip #2: Did You Check References and See Photos?
Ask for at least three references - with two of them being for the same type of project you are planning - and then call the references. Additionally, ask the contractor to provide photos of previous work, especially for the same type of project. If he produces lawn and garden photos and you're planning a bathroom remodel, you may want to check out another contractor.

Tip #3: Does Your Contractor Take Debit or Credit Cards?
Besides your ability to earn a few points, bonus miles, or cash back on your project, a good sign that a contractor is financially savvy and has a bank behind his business is his ability to take debit and credit cards. This doesn't just apply to big contracting companies. Many small, one-man shops will take cards if they have a good relationship with their business bank or credit union.

Tip #4: Manners and Appearance?
If the contractor drove his vehicle to your home to give you an estimate, take a look at the way he keeps the equipment and vehicle. Are things clean? Neatly arranged? If not - that's a big warning. The way a contractor treats his tools is a direct connection to how he'll treat your home. During the initial meeting, does the contractor present himself in a professional way? Do you feel comfortable around him or his employees? They will be working in your home after all.

Tip #5: Clean Up Policy?
Ask about the clean-up policy. For example, if your home improvement is a multi-day project, will the contractor be cleaning up at the end of every day or will he leave the dust, wood chips, and other mess laying there for day #2? The more mess in your home - the more it gets tracked around. Many homeowners find themselves with mouths gaping wide after the contractor has left for the day and their floors and home are dirty and messy around the project area.

Tip #6: Will the Contractor Put It In Writing?
Is your contractor willing to put both his bid and the scope of work in writing? If not - walk away immediately. You'll be surprised how many homeowners have been duped by contractors who verbally tell you what's included in their scope of work, but will then, in the middle of everything, require extra money to finish the remodel, thus holding you hostage with an uncompleted home project.

Tip #7: Availability?
Can the contractor get the job done in your timeline rather than his timeline? There's nothing more frustrating than if a contractor tells you that a job will be done by a certain date and then it isn't . On the flip side, if you can't find a good contractor that's willing to commit to your timeline, your expectations may be too high and you may need to adjust your timeline.

Tip #8: Does Your Contractor Use "Subs?"
Does your contractor plan on doing everything himself? Or will he "sub out" work to the "trades?" For example, if you are remodeling a bathroom, you may need a plumber, electrician, and carpenter. It's okay if the contractor subs work out to these specific trades - it shows he wants the work done right.

Also, it's fair to say that you can expect your contractor to make money off the trades, or other sub-contractors, by marking up those quotes for the project. That is a standard practice to help the general contractor recover costs in the time it takes to manage the schedule. If you don't want to spend the extra money on your contractor marking up the trade quotes, then you should prepare to project manage the remodel yourself, but know this may limit your options on contractors willing to work with you.

Tip #9: Quoting & Billing Procedure?
Ask the contractor about his quoting procedure. Will it contain general information, or will it be specific? For example - most contractors will charge you for a fuel surcharge, material up-charges, waste removal, labor, etc. Some will show you these exact costs in a line item invoice, but others roll it up into one big bill. How much detail do you want? You should clarify that with your contractor upfront.

Also - what is the payment or billing policy? Is money required upfront? If so, go back to #1 and #2 above to make sure you have the contractor's references checked and have a copy of his contractor's insurance.

Tip #10: Did Your Contractor Get the Permits?
Ask your contractor to take care of the permits. Although permits cost you money, the inspection process is meant to protect you from poor workmanship and to make sure that everything is being built to code.

By following these 10 tips for hiring a home contractor, you'll feel more confident that you've found the right contractor for your remodeling job....

90 Percent of Americans Do Not Regret Buying Their Current Home

Many home owners are happy with their purchases.  The small percentage of home owners in the following study that were unhappy sited issues regarding financing.   How you pay for your new home and the guidance you receive is very important to a smooth transaction and your ability to stay in your home after the sale.  If you don't already have a financial professional in your corner, your Realtor can usually suggest several option for financing.  You must ask the right questions and make sure you're comfortable with all aspects of the loan, fees and payment.  Your Realtor may be able to shed some light on items that may not be very clear or explain the process, but they are not a lender; there's no substitute for a professional mortgage specialist.

RISMEDIA, July 24, 2010--A new study released by Bankrate, Inc. shows that, even with home prices sliding and mortgage rates the lowest in decades, the vast majority of Americans do not regret buying their current home.

The poll, conducted by Princeton Survey Research Associates International, can be seen in its entirety here: http://www.bankrate.com/finance/mortgages/poll-few-homeowners-regret-purchase- 1.aspx.

Among the findings:

-- Ninety percent of homeowners say they don't regret buying their home versus a mere nine percent who said they do;
-- Among those who regret buying their homes, the most common reasons cited were because they cannot sell their home and move on along with those who say they regret their purchase since they can't afford their monthly mortgage payments;
-- Only eight percent of Americans don't know what type of mortgage loan they have, down from 26 percent who didn't in a Bankrate poll commissioned two years ago;
-- Fixed-rate mortgages are rising in popularity with 79 percent of those polled saying they have a fixed-rate mortgage on their home;
-- Wealthier Americans most overwhelmingly favored fixed-rate mortgages with almost 90 percent of those polled who make over $75,000 saying that their home was paid for with a fixed-rate mortgage.

"It's surprising - and reassuring - to hear 90 percent of homeowners say they don't regret the purchase of their current homes," said Greg McBride, CFA, senior financial analyst for Bankrate.com. "And all the nasty headlines in the past two years have really moved the needle in terms of mortgage awareness, with a significant drop in the percentage of borrowers who don't know what type of mortgage they have."

This national random-digit-dialed phone study of 1,001 adults 18 or older was conducted for Bankrate by Princeton Survey Research Associates International. The sample was weighted by demographic factors including age, gender, race, education and census region to ensure reliable and accurate representation of adults in U.S. households. The overall margin of error for the survey is +/- 3.5 percentage points based on the total sample.

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New Home Tax Credit From the KY Department of Revenue: The New Home Tax Credit is a nonrefundable credit, up to $5000, against individual income tax allowable to a qualified buyer, provided a cap of $15,000,000 for all approved New Home Tax Credits has not been met. Click here for additional clarification about this credit in a new administrative regulation, 103 KAR 17:150. Do You Qualify? You Can Claim the Credit if All of the Following Apply: Your qualified principal residence is a single family dwelling; Your qualified residence is purchased to be the principal residence of the qualified buyer(s) for a minimum of two (2) years; You purchase a new home after July 25, 2009 and before January 1, 2011; and, You meet qualifications and receive approval from the Department of Revenue. You Cannot Claim the Credit if:   Your new residence has been previously occupied. Your application is received after the New Home Tax Credit cap has been reached. You are eligible for first time homebuyer credit ($8,000 credit) under Section 36 of the Internal Revenue Code or the  amendment to the homebuyer credit signed into law on November 6 as part of the Worker, Homeownership, and Business Assistance Act of 2009 ($6,500 credit) and purchased your home on or before November 6, 2009. You are building or contracting construction of your own home.  The new home tax credit is only for those taxpayers who purchase a new previously unoccupied single-family dwelling.  "Purchase" means a point within the approved times when escrow closes between the qualified buyer and the seller of the qualified principal residence.  Homeowners who build newly constructed homes on their own land do not qualify for the credit based on KRS 141.388. Your application is not received via FAX within seven (7) calendar days from the purchase date. Any application submitted via mail will be denied. How to Apply To Apply For the Credit: Submit a Kentucky Form 40A103 Application for New Home Tax Credit application via fax within seven (7) calendar days of the escrow closing between the buyer and the seller. Kentucky Form 40A103 may be accessed via link to application. FAX to the Department of Revenue at (502) 564-3706 The Department of Revenue will notify taxpayers in writing if their application has been approved or denied. Using the Credit Approved Buyers Qualified buyer(s) approved for the credit will receive a credit allocation letter with a four (4) digit approval code from the Department of Revenue.  This letter must be attached to the income tax return filed for the taxable year during which the qualified principal residence was purchased. Electronic filers:  Information from the credit allocation letter and the New Home Tax Credit Worksheet D (for electronic filers only) must be included with any electronic return submitted. Make sure the software used to submit the return can meet these requirements. Use of Credit Against Tax Liability Credit is claimed on page 1 of your Kentucky tax return. Approved credit, up to $5000, applies to Kentucky tax liability, after applying any allowable credit for Family Size Tax Credit, Education Tuition Tax Credit, and Child and Dependent Care Credit. For example, if your Kentucky tax liability, after allowable credits, is $7000, then you would be allowed the full $5000 credit and only owe the remaining $2000. New Home Tax Credit is NONREFUNDABLE A nonrefundable credit means that any unused portion will not be refunded and may not be carried back or forward to another tax year.  For example, if your Kentucky tax liability, after...

Things to Consider When Receiving a Low-ball Offer
Is a low-ball offer a good chance to see things with fresh eyes?

The low-ball offer is hardly uncommon, especially with the number of all-cash "let's make a deal" buyers who feel that a "bad news economy" gives them purchasing leverage in any market. Now, obviously you have an obligation to present all offers. And yes, your seller might be insulted at first, but a low-ball offer is a good time to reflect on the listing, your buyer, and possibly see things with fresh eyes.
Finally (and most importantly): Is this low-ball offer a great opportunity to have a difficult conversation with your seller regarding any/all the above issues?

Here also are current area statistics:

Statistics  Residential (Single Family & Condo)

LISTINGS:

July 12 - 18, 2010  690
Last Year                 646
 
SOLDS:

July 4 - 10, 2010    179
Last Year                 251
 

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There had been earlier reports that the extension to close your loan and still be eligible for the Homebuyer Tax Credit (HTC) had passed when it had not.  It was attached to an extension of unemployment benefits that the Senate didn't want to pass because of deficit issues.  Now it would appear that we have the extension.  This should have come a month ago to save a lot of home buyers, loan officers and underwriter the stress and long hours to get under the wire. 

After a close brush with the deadline, Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.  The legislation is designed to create a seamless extension to new closing deadline for eligible transactions, which is now September 30, 2010.  There will be no gap between June 30 and the date the President signs the bill into law.
 
NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the Tax Credit Closing deadline will help provide additional stability to real estate markets across the nation.
 
For additional information on the extension visit www.realtor.org/government_affairs
 
Additionally, the United States Senate has passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569) an extension of the National Flood Insurance Program until September 30, 2010.  This will allow transactions to move forward.  The bill is retroactive and covers the lapse period from June 1, 2010 to the date of enactment of the extension.
 
For more information on the flood insurance program visit www.realtor.org/government_affairs...

I attended a Volunteer Appreciation Party for Pandora Production last weekend and ran in to a client that is very passionate about the ecology and sustainability.  We were discussing her new landscaping in the front of her yard where she took everything out and replaced it with drought tolerant Kentucky native plants from a local nursery.  I am planning the same type of move with the beds in the front of my house once I get the painting done; one step at a time. 

I came across this information and thought it would be of interest to my clients and others interested in sustainability and water conservation.  

Conservation Through Xeriscaping: A way to help preserve our most precious resource, water.
 Xeriscaping (or xerogardening) is the practice of landscaping and gardening in ways that reduce or eliminate the need for excess water. Taken from the Greek word, "xeros" (meaning dry), xeriscaping was initially designed to provide landscaping options for areas which are particularly sensitive to draught.
Given that water is the most precious resource on the planet, you might find that your clients would be open to a conservationist's approach to landscaping their home. In addition to reducing the costs of watering and chemical maintenance, well executed xeriscaping can actually improve the curb appeal and value of a home.
If you've heard a client recently bemoan their lawn or the hassle of maintaining it, you might introduce them to this green alternative. Below are a few links on the topic of xeriscaping:
An Overview of Xeriscaping:
http://eartheasy.com/grow_xeriscape.htm
Google Images of Xeriscaping:
http://tinyurl.com/23keqet
A sample article featuring Florida homeowners who have embraced xeriscaping:
http://www.beacononlinenews.com/news/daily/2751...

It has been a long weekend.  This was the National Association of Realtor's National Open House Weekend.  Here in Louisville, Kentucky, it was beautiful. 

I had several of my listing open with the help of some of the agents and it was pretty successful.  We had the help of NAR pushing the open houses nationally and the buyers were out.  Just the push we needed before the tax credits end. 

Other than the open houses, several of my sellers are now buyer and they took advantage of National Open House Weekend to shop.  We are still running into multiple offers;  some client prefer not get into an emotionally driven bidding war.  The competition is getting tough for the good listings. 

There are several closing scheduled for this week if all goes well.  Most are ready to go, but I have a Fannie Mae contract that has been a little bit more difficult than I would have thought.  We will know tomorrow if it will close on time, but it is going to close.

There is always something new in the industry; especially now with the banks and other lenders changing rules almost dally.

I hope everyone has a great week.  Check out my Facebook fan page for more about Real Estate, the economy and Sustainable building, remodeling, selling and living.
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Well according to my desktop countdown clock there are 21 day until the deadline for being under contract; closing will be another issue.  I already have clients calling me with comments about how their lender is not being responsive and not getting back to them in a timely manor (with in 10 min.).

I have heard many say the stimulus hasn't really done anything for the housing market; I guess we will see in May.  It has made a difference with the group I work with; first time home buyers.

I enjoy first time home buyers and guiding them through this process.  I had the opportunity to make some long term clients in this market that will be ready to move up in the next 3-5 years and are already sending me referrals.

If your ready to make the jump to home ownership, call, email, text, tweet or visit the website and find yourself a little slice of Louisville.

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Updated Nov. 6, 2009, to note new legislation. The new legislation extends and expands the first-time homebuyer credit allowed by previous Acts. The new law:

    * extends deadlines for purchasing and closing on a home
    * authorizes the credit for long-time homeowners buying a replacement principal residence
    * raises the income limitations for homeowners claiming the credit

Q. What is the credit?

A. The first-time homebuyer credit is a new tax credit included in the Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period.

The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date. It was further expanded in late 2009 to extend deadlines and to allow long-time homeowners buying replacement homes and people with higher incomes to qualify for the credit. (11/12/09)

Q. How much is the credit?

A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009 or early 2010) for either a single taxpayer or a married couple filing a joint return, but only half of that amount for married persons filing separate returns. The full credit is available for homes costing $75,000 or more ($80,000 in 2009 or early 2010). Long-time homeowners who buy a replacement home after Nov. 6, 2009, or in early 2010 may qualify for a credit of up to $6,500, or $3,250 for a married person filing a separate return. (11/19/09)

Q. Which home purchases qualify for the first-time homebuyer credit?

A. Any home purchased as your principal residence and located in the United States qualifies. You must buy the home after April 8, 2008, and before May. 1, 2010 (with closing to take place before July 1), to qualify for the credit. For a home that you construct, the purchase date is considered to be the first date you occupy the home.

Normally, taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit. This means that you can qualify for the credit if you (and your spouse, if married) have not owned a home in the three years prior to a purchase. However, a long-time homeowner can also get the credit for a qualifying replacement home purchased after Nov. 6, 2009. To qualify, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you by your new principal residence.

If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 or 2009 income tax return. For an eligible purchase in 2010, you can choose to claim the credit on either your 2009 or 2010 return. (11/19/09)

Q. If a taxpayer purchases a mobile home (manufactured home) with land and qualifies for the credit, is the amount of the credit based on the combined cost of the home and land?

A. Yes. The first-time homebuyer credit is ten percent of the purchase price of a principal residence. The total purchase price (mobile home and land) is used to determine the amount of the first-time homebuyer credit.

Q. Is a taxpayer who purchases a mobile home and places the home on leased land eligible for the first-time homebuyer credit?

A. Yes. A mobile home may qualify as a principal residence and it is not necessary that the taxpayer own the land to qualify for the first-time homebuyer credit.

Q. Can a taxpayer who purchases a travel trailer qualify for the credit?

A. A travel trailer that is affixed to land may qualify as a principal residence.  

Q. Can an individual who has lived in an RV qualify for the credit?

A.  For purposes of the first-time homebuyer credit, an RV with a built-in motor is personal property that is not affixed to land and does not qualify as a principal residence. Accordingly, someone who has owned and lived in an RV within the past three years may still qualify as a first-time homebuyer.

Q. Can I apply for the credit if I bought a vacation home or rental property?

A. No. Vacation homes and rental property do not qualify for this credit.

Q. Who is considered to be a first-time homebuyer?

A. Taxpayers who have not owned another principal residence at any time during the three years prior to the date of purchase are considered first-time homebuyers. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008. In addition, Long-time homeowners who buy a replacement home after Nov. 6, 2009 or in early 2010 can also qualify. Under this rule, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you by your new principal residence. For an eligible taxpayer who, for example, bought a home on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, through Nov. 30, 2009. (11/19/09)

Q. Can a dependent on someone else’s tax return claim the first time homebuyer credit if they otherwise qualify?

A. Different rules apply depending upon whether a dependent buys a home after Nov. 6, 2009, or on or before that date. Dependents are not eligible to claim the credit on any purchase after Nov. 6, 2009. However, a dependent who buys a home on or before Nov. 6, 2009 may qualify for the credit. (11/19/09)

Q. Can a minor buy a home and claim the credit?

A. Usually, no. However, different rules apply to purchases after Nov. 6, 2009 and those on or before that date.

Minors are generally barred from claiming the credit on home purchases after Nov. 6, 2009. To qualify for the credit, a purchaser must be at least 18 years of age on the date of purchase. For a married couple, only one spouse must meet this age requirement. A dependent is not eligible for the credit, regardless of age.

For purchases on or before Nov. 6, 2009, the tax law does not bar a minor from buying a home and claiming the credit. However, taxpayers who do not otherwise qualify for the credit do not become eligible for the credit simply by using a minor child’s name. In addition, under state law, children under the age of 18 generally are not bound by any contract they sign and cannot be required to comply with the terms of the contract. Thus, it is extremely unlikely that a seller of a home, or a lender if financing is required, would enter into a bona fide sale of a home to a child. Merely using the child’s name to purchase a home does not qualify the child for the credit if, in substance, the child is not a bona fide purchaser of a home. (11/19/09)

Q. When do I have to buy a new home to get the credit?

A. The credit is available for eligible home purchases after April 8, 2008. You must enter into a binding contract to buy the home before May 1, 2010 and close before July 1, 2010, in order to obtain the credit. For a home you construct, the purchase date is considered to be the date you first occupy the home. (11/19/09)...