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A stimulus to buy a home
Time is running out to get $8,000 tax credit
W BIZ HOME OWNER 1
Sam Best, above, took advantage of the $8,000 federal tax credit he received as part of the stimulus when he became a first-time homeowner at age 70. - photo by SCOTT BRYANT/staff
      With expiration of the popular federal tax credit for first-time home buyers looming on December 1, local realtors and mortgage lenders are encouraging potential homebuyers to take advantage of this significant stimulus measure.
      "This is a tremendous opportunity," said Statesboro realtor Hazel Hendrix. "It is important that people understand that this is not a tax deduction, it is a tax credit. You can get as much as $8,000 from the federal government when you buy your house."
      According to the Georgia Association of Realtors, the $8,000 federal tax credit is available to buyers who are purchasing a primary residence who have not owned a primary residence during the three-year period prior to the purchase. The credit does not have to be repaid, and it must be claimed on the buyer's federal income tax return.
      One local resident who recently took advantage of this stimulus is Sam Best. The 70-year-old retiree is not necessarily your typical "first" time homebuyer, but was most appreciative of the tax credit using it to furnish his new home.
      "I lived in Florida for most of my life, and property is so expensive there that I just never bought a home," Best said. "When I retired to Statesboro to be near family, the cost of real estate in conjunction with the tax credit enabled me to buy my home. I am so happy. I just love it, and I bought all of my furnishings here. The money stayed here in Bulloch County."
      Hendrix said buyers in all age brackets and walks of life are using the tax credit as a means to offset the expense of getting into a home as well as to pay for other expenses that they may face. Soon to be newlywed Laney Schmidt is using part of her stimulus credit to help pay for her wedding in November.
      "Last year, I was aware of a credit of $7,000 that needed to be repaid," she said. "From listening to the news, as well as everyone talking about this new credit, my fiancé and I started seriously looking for a home in June. We bought one in July, and I have already received my tax credit check of $8,000. It has certainly helped with a lot of the expenses of moving into a new home, in addition to our wedding."
      With less than 60 days in which to take advantage of the tax credit, Lisa Glisson, a local loan officer and assistant branch manager of the Queensborough National Bank and Trust Company in Statesboro, suggests that interested homebuyers quickly speak with a lender to determine whether or not they qualify for a loan.
      "The prequalification process is pretty quick," Glisson said. "But you really need to go ahead and do that so that you know exactly what you can spend on a home."
      Glisson said to close on the home with a lender will take about 30 days. "You should have a contract on a house and your loan documentation submitted by November 1 if you want to close by November 30. Right now that is the deadline date. If it isn't closed by then, you won't get the credit."
      There has been talk in Washington recently about extending the deadline past November 30. Speaker of the House Nancy Pelosi said she is looking into extending and expanding the popular tax credit for first-time homebuyers. Pelosi said the credit could be expanded to people who already own homes, though she offered no details. Senate Majority Leader Harry Reid, D-Nev., has announced his support for extending the existing credit an additional six months.
      "The question is, would that be just first-time homeowners or would you open it up to other purchasers of homes?" Pelosi said. The program is scheduled to run for 11 months this year and cost a projected $6.6 billion. Extending or expanding the program would add to the costs.
      Hendrix, who serves as the Region 9 State Director the Georgia Association of Realtors said that all real estate transactions vary, and there are different circumstances for each of them that could lead to a longer buying process.
      "Most consumers aren't aware that the average real estate transaction has over 180 steps," she said. "Those steps include contacting a realtor, shopping for and securing a mortgage, searching for a home, settling on a home, presenting an offer, obtaining a home inspection, shopping for homeowners insurance and selecting an attorney. That is why it is paramount that interested buyers go ahead and begin the process. I would hate to see a homebuyer that would qualify for this credit not receive it, simply because they were not able to close by November 30."
      In addition to the federal tax credit, there is a Georgia tax credit which equals 1.2 percent of the sales price of the home for a maximum credit of $1,800. Unlike the federal credit, it is not limited to first-time homebuyers and does not have an income cap.
       Statesboro Board of Realtors president Todd Manack said this is just another reason for home buyers on the fence to make a move.
       "This is such a great time to buy a home," Manack said. "Home prices have come down, mortgage rates are very good, and now for some, there is a substantial tax credit in place. This is a buyer's market right now. There is no doubt."
       Manack said that no one is really sure what the overall effect on home sales has been resulting from the stimulus. "We can't get any numbers at this point, but we know there has been a very positive effect. Like everyone else, we hope that the deadline is extended."
       Hendrix strongly suggests that homebuyers consult with their accountant to determine the exact tax credit that they will receive. "There are stipulations that come with this credit, so make sure that you know what you will qualify for."