Grandpa always said....

When I was a little younger, I was talking to my grandfather about the new pontoon boat he had just bought for his cottage on Higgins Lake. He had traded in one that was in pretty good shape and he shared with me what he got on trade in. I couldn't believe how he had been taken advantage of by the boat dealer. I made the comment that he should have called me and I would have given him more. I'll never forget his response. "That guy has to make a living too".

Just a few years ago I asked for some advice on a transaction from my former business partner, Dave Felker, of 45th Parallel Realty. It was in regards to a transaction I was negotiating in which I had to potentially offer up a share of the total commission to make sure the deal came together. His words of advice were, "Pigs get fat and hogs get slaughtered". I had the opportunity to put a few bucks of my own money aside and, in the end, help a seller move on with their life and a buyer begin building memories for their family. A pretty easy decision when I thought about it in those terms.

I keep both of these little words of wisdom at the forefront of my mind and use them as guiding principals in my business and personal life. Maybe more now than at any point in my career, I've had the unfortunate experience of working with clients who are in a real financial bind and really need to get their property sold or suffer serious consequences. On the flip side of this is a mentality among some buyers that these are the ideal sellers to find because you can really "stick it to them". I'm not saying that we don't help buyers get good deals when opportunities arise. After all, any seller is only going to put together a transaction that helps them out of a sticky situation. It is a fantastic buyer's market and I also believe that it's important that those buyers get the best price and terms possible.

I just hope as you move forward in the process of finding the right property that you try to keep these bits of wisdom in mind. If you've found your dream property and it's listed at an attractive price and you've been able to even get some movement off that price with your offer, try to consider your fellow man before you make the decision to really turn the screws. Have a wonderful holiday season and please let us know if we can be of any help.

Homeowner's Tax Credit 101

Is it true, did the government actually extend the tax credit? The answer is “Yes” they did! Officially it is known as the Worker, Homeowner and Business Assistance Act of 2009. Originally the program was to run from January 1, 2009 through November 30, 2009. The extension, however, took effect November 6, 2009 and will run through April 30, 2010. Some circumstances will allow for the end date to extend to June 30, 2010. The extension allows for an increase in income limits for eligibility and adds a benefit for current homeowners as well.
The program was originally designed to allow for a tax credit for first time homeowners. A “First Time Homeowner” is defined as someone who has not owned a principal residence in the last three years. If married, neither spouse can have owned a principal residence in the last three years. Now, current homeowners are also eligible for a tax credit if they have lived in their current principal residence for five consecutive years of the last eight.
The modified extension pertains to those individuals who earn less than $125,000 annually or married couples earning $225,000 jointly. Reduced allowances are available for individuals with a modified adjusted gross income of $145,000 and couples earning $245,000. It is important to contact your tax advisor about your specific situation. Home purchases must be closed with title transferring on or before April 30, 2010 to be eligible. Though the principal residence cannot be purchased from a family member, the definition of principal residence does include many options home buyers. Single family dwellings, condos, townhomes, manufactured homes and even houseboats can all be considered for the tax credit. New construction also qualifies for the credit as long as possession occurs before the deadline or a binding sales contract is in effect prior to the deadline. The tax credit for first time home buyers is equal to 10% of the purchase price up to $8,000 and current homeowners are also allowed the 10% up to $6500 in credit. The maximum allowed purchase price for either is $800,000.
Claiming the tax credit is as easy as adding the amount determined by completing IRS form 5405 and entering the amount on line 67 of your 1040 income tax form for 2009 (you may also claim it on your 2008 taxes by adding the amount to line 69 of your 2008 1040). For those purchasing in 2010, make sure to contact a tax advisor to determine the appropriate line to enter the information. There are no applications or pre-approval necessary; however, it is important to make sure you qualify for the credit. Attach a copy of your closing statement (HUD-1 settlement form) to your tax return as proof of the home purchase.
If waiting until you file your taxes seems a daunting task, there is another option for prospective buyers. Qualified homebuyers can reduce the amount of income tax withholding on their W-4 or through quarterly estimated tax payments up to the amount of the tax credit. This money can then be applied to the down payment. If the tax credit qualified home purchase does not take place, then you will be responsible for repayment of the income tax along with possible interest charges and penalties. HUD has also decided to allow buyers using FHA Insured mortgages to preemptively apply the anticipated credit to their home purchase. This is done by FHA approved lenders allowing short term loans up to the maximum amount of the tax credit. These funds can be put toward certain expenses such as down payment and closing costs. Some government and housing finance agencies may also be issuing additional tax credit loans to allow home buyers to reach the FHA requirement of a 3.5% down payment. Make sure to ask your lender about all possible tax credits or discounts available.
The tax credit does not need to be repaid by the homeowner; however, he or she must occupy the home for three years. If the property is sold prior to the three year mark, the full amount of the credit will be recovered at the time of sale. For more information about the tax credit, visit the IRS website at www.irs.gov/newsroom/article/0,,id=204671,00.html for more details.
Contact Cheri Wickman at cheri@homewaters.net or 231-392-9365 to start looking for your new home!

Iceman Cometh to Kalkaska and Grand Traverse Counties

Saturday, November 7, 2009 bike riders from throughout the U.S. and Canada converged to participate in one of the premier cross country bike races in the country - The Iceman Cometh . Having watched the start of this race many times in its 20 year history, the weather was outstanding on Saturday. I also watched the start of the race last year with 6 inches of snow on the ground and it was still coming down. Racers started in the Village of Kalkaska, rode a grueling 27 mile race through the trails of the Pere' Marquette National Forest and finished in Traverse City at Timber Ridge. Economically, these bike riders were a huge boost to the area's tourism. Why not find your homewaters and discover all the fun to be enjoyed in Northwest Michigan.

Where Blue Meets Green

Where Blue Meets Green is the new logo for the Environmental Committee of the Traverse Area Association of Realtors. Our environment is so fragile and being good stewards is supported by the Realtor Association. 20% of the World's Fresh Water supply is located in the Great Lakes Basin. Northwest Michigan boasts some of the most pristine Lakes, Streams and Rivers in Michigan. Northwest Michigan is home to thousands of acres of inland lakes, Lake Michigan, rivers and streams providing sport fishing, boating, recreation and unsurpassed beauty. We have nature in abundance. Why not find your Homewaters
and discover for yourself what makes our part of the World so special!