Real Estate Information Archive


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Possible Homebuyer Tax Credit Extension!

by Team Cook

The current deadline for first-time homebuyers to take advantage of the $8000. tax credit is November 30th of 2009.

Team Cook has had several happy customers who have taken advantage of the tax credit and purchased their first home in the Loveland, Berthoud, Ft. Collins, Johnstown, Greeley and Longmont areas.

A group of home builders has gone to Congress and asked that the tax credit be extended for another year, as well as asking the credit to include those who also may be buying their second or third home.

Should this extension pass they are predicting this would help the economic recovery by creating an additional 350,000 jobs with new & existing homes.

"Housing historically has been a key factor in helping the economy pull out of a recession," says Bernard Markstein, senior economist for the NAHB. "Extending the credit will help reduce the supply of houses for sale, stabilize prices and return housing to its rightful place in the economy."

As of today the tax credit has not been extended which means we still have to work under the November 30th deadline.  If you are a first-time homebuyer or have not purchased a home in the last 3 years, you still have time to take advantage of receiving $8,000! 

Call Team Cook so we can help you purchase today...before it's gone tomorrow! 970-532-2695!

Building Better Homes for a Better Life!

by Team Cook

An Energy-Efficient Home Leads to Cost Effective Paths.

Building a energy-efficient home requires a bit of planning, preparation & decision making.  

When preparing the design of your home you may want to consider skylights that allow natural light through, as well as take into consideration a more open layout to enhance the energy-saving capabilities.

Even though initial cost may be higher, if you install top quality windows and doors it will help prevent air leaking in or out and can key to maximizing efficiency.

Take a look at this Energy-Efficient Home build by Aspen Homes of Colorado. 

Aspen Homes of Colorado and Team Cook at The Cottage Realty, Ltd. are proud to offer Built-Green Energy-Efficient homes in Loveland, Colorado.   Call Team Cook today for more information or to get started on building your Energy-Efficient home today! 970-532-2695


by Team Cook

Short Sales can be a "win, win" situation for both buyers and sellers. Some sellers however, have addressed concerns about having to pay taxes on the amount that was forgiven by the mortgage holder.

Linda Holdredge, CPA for Hanna Holdredge & Associates who services clients in the Loveland, Berthoud, Ft. Collins, Johnstown, Greeley, Longmont and surrounding Northern Colorado areas wrote an amazing letter that explains the Debt Cancellation Income that is not taxable! 



by Team Cook



What is a Short Sale?

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate agent's commission. A short sale is an alternative to foreclosure which may benefit both lender and borrower alike.


How do I know if a Short Sale on my property is right for me?

If you are faced with a hardship and are unable to meet your financial obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through the foreclosure process.


If I do a Short Sale, what do I have to pay to sell my home?

In most cases, you will pay literally no sales costs if your lender approves the Short Sale. The agent commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval.


How do I get started on the Short Sale process?

There are very specific categories that lenders consider "qualified hardships." A short sale can only take place if both your property and you qualify. You will need to make sure you are working with an experienced short-sale transaction management team.


What "hardship" is acceptable for a lender?

Below you will find a list of "hardships" that are frequently accepted by mortgage lenders:

Job loss, unemployment or significant income loss
Divorce or separation
Excessive medical bills
Death of spouse
Military service
Adjustment in mortgage payment or unforeseen increase in living expenses

Do my mortgage payments need to be delinquent?

Most lenders will turn down your request for a short sale if the seller is currently making the payments. The only time they will consider it a short sale, is when the seller's payments are delinquent.


I have two loans; can I still do a Short Sale transaction?

Yes. You will have to work with both lenders to put together a Short Sale transaction packet. Most sellers in this situation are usually successful at getting the two lenders to cooperate because neither lender wants to own another home through foreclosure.


I am concerned about my credit - how will a Short Sale affect my credit?

Late payments leading up to a Short Sale will negatively impact your credit. However, if your bank accepts a Short Sale and does not negatively report, the short sale will not in itself negatively impact your credit score. For sellers, the key advantage to selling in a short sale is avoiding foreclosure. A short sale does less damage to a person's credit report than a foreclosure. It's also less detrimental than a "deed in lieu" (of foreclosure), in which a borrower gives the lender the keys to the house and stops paying the loan.



by Team Cook


Become a pre-approved buyer. With lending guidelines changing daily, being approved will allow you to look like cash to sellers which helps you make a deal. Plenty of inventory in upper price ranges. This is where the largest discounts in prices are occuring.

Real estate is a finite product that will rebound in value. Buy now and take advantage of your buy low, sell high ability today.

Lock in your low interest rates that are available today.

Ask for terms from sellers to meet your financing needs.

Ask for a Carbon Monozide detector with your inspections at the seller's expense to install before closing. Make sure you ask for the detectors that are wired with the other ones in the home.

If you are a patient buyer, short sales and foreclosures will afford you the lowest prices to buy homes, but you must be knowledgeable of the short sales process to really take advantage of this opportunity.

By Leeann Iacino - Denver Post

Would you like more information on Short Sales and how they work???


$8000 UPFRONT!

by Team Cook


First-time home buyers will be able to get $8,000 up front instead of waiting for tax time. 

Thousands of first-time home buyers will be able to get short-term loans so they can make quick use of a new $8,000 tax credit to pay for some of the costs of buying a home. The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the Internal Revenue Service.

Most Borrowers will still have to come up with the FHA's required 3-5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. Ten states have such programs in place, according to the National Council of State Housing Agencies.

But, there are many other potential uses, such as for closing costs and fees, or to beef up the down payment beyond the minimum level. The FHA, which insures about a quarter of new home loans, is projected to guarantee about 2.2 million loans in the next budget year.

Any buyer who hasn't owned a home in the past three years is considered a first-time buyer and eligible for the program.  Borrowers can claim the credit by filing an amended 2008 tax return, or they can wait for their 2009 return.

The change "will represent an enormous benefit for communities struggling to deal with an oversupply of housing." Housing Secretary Shaun Donovan said in a statement.

The tax credit is not available to individuals with incomes above $95,000 or couples with incomes above $170,000. It expires Nov. 30.

By Alan Zibel The Associated Press

If you are a first-time home buyer or have not owned a home in the past three years, then don't miss out on this great opportunity to help you become a home owner. Team Cook has helped several buyers who took advantage of this program.  As they say, "Time is of the essence" There are only a few more months available to receive your $8000.00 dollars...and then IT'S GONE!



by Team Cook

On May 29, the Department of Housing and Urban Development announced that qualifying buyers can apply the $8,000 tax credit toward the purchase of a home. To facilitate the process, the Federal Housing Administration is permitting its lenders to extend short term bridge loans, which will enable qualifying buyers to apply their tax credit toward closing costs, buying down their interest rate, or increasing their down payment above the FHA required 3.5 percent.

"With an abundance of inventory, reduced home prices, historically low interest rates and now the availability of the tax credit at closing, we expect to see the housing market further stabilize and improve," said Charles McMillan, president of the National Association of REALTORS.

* 2009 home buyers can claim a special tax credit worth up to $8,000. The American Recovery and Reinvestment Act offers qualifying home buyers a tax credit equal to 10 percent of a home's purchase price, up to a maximum of $8,000. The tax credit is offered to first time buyers, and those who have not owned a principle residence in the past three years. To be eligible for the tax credit, buyers must meet general income requirements and close on their purchase before December 1, 2009. Please contact Team Cook for more details on this once-in-a-lifetime program.

What is a Short Sale and is it something you should consider?

A Short Sale is asking your mortgage lender to take a lesser amount on the home than what is owed if you were to find a buyer. This is a way to stop your home from being foreclosed on and can also save your credit report from being heavily damaged. Late mortgage payments and foreclosures are two key factors that can affect your credit report.

When you short sale your property, you are selling the house to stop the foreclosure, so you cannot sell the house to gain profit from it.  In most places the foreclosure process can take a long time, so you may still have plenty of time to try and get a buyer, and can remain in the home until the time you actually go to closing.

Most people assume that they are still responsible for realtor fees with a Short Sale process, however, the realtor fees are paid by lender.

For more information regarding Short Sales visit:



Study: Area home prices dipped

by Team Cook

Loveland and Berthoud values declined, but other markets increased. Five of 11 major housing markets in Northern Colorado increased in value from 2007 to 2008; however, the Loveland - Berthoud market was not among them.

Home prices in Loveland and Berthoud dropped 1.9 percent from 2007 to 2008, according to a new study on home prices compiled by the Colorado State University Everitt Real Estate Center in Fort Collins.

The study counters the perception that the housing market is "in the tank," said John P. Gerhard, research analyst with the Everitt Real Estate Center in the College of Business.

Gerhard and Sriram Villupuram, a researcher with the Everitt Real Estate Center and assistant professor in the Department of Finance and Real Estate, compiled the house price indices study for year-end 2008. The study will be released each year in March and August to continue tracking the housing market.

"Its primary value will be to the real estate community," said Chuck McNeal, chief executive officer and chairman of the Group Inc. Real Estate, which has six offices in Northern Colorado.

"What it will do is make it easier for real estate professionals to explain to consumers the nature of markets," he said.

The house price indices study provides price indices for 11 major market areas in Larimer, Weld and Boulder counties and for individual census tracts in Northern Colorado.

The indices use data from information Real Estate Systems, a multiple listing service for Northern Colorado, and includes more than 180,000 closings from 1997 through 2008 in three counties. The indices use a weighted repeat sales methodology, which measures the price change for the same house when it is sold a second time.

The indices, which are provided at a county, market area and census tract level, are more detailed than other indices that report home prices," Gerhard said.

"Northern Colorado's housing market is actually in fairly good shape according to our analysis of housing prices," Gerhard said. "(The market) is hyperlocal, meaning it can vary widely by neighborhood and even block by block."

Gerhard and Villupuram found that the markets with the highest level of appreciation were located around the three major universities, Colorado State University, the University of Colorado and the University of Northern Colorado, and major employers.

The indices at the market area level show that the Tri-Town area of Dacono, Firestone and Fredrick increased the most in value at 2.1 percent from 2007 to 2008. For Collins - Timnath followed with a 1.5 percent increase. The other three market areas showing an increase were Boulder, Gunbarrel, Estes Park and Erie. The market area with the largest decline in value was Greeley - Evans at 8.2 percent, followed by Longmont at 4.7 percent.

The other markets with a decline were Johnstown, Milliken, Windsor, Severance, Loveland, Berthoud, Louisville and Lafayette.

Over the 11-year span, Boulder - Gunbarrel showed the greatest increase in home prices, appreciating 89.1 percent from 1997 to 2008, while Greeley - Evans showed the lowest level of appreciation at 7.9 percent.

The Loveland - Berthoud market fell in the middle with a 39.1 percent appreciation.

Article written by Shelley Widhalm and published in the Reporter-Herald


by Team Cook


CONGRESS ENACTS BIGGER AND BETTER HOME BUYER TAX CREDIT. A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

Are there any income limits for claiming the tax credit?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.

Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.

Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.

I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.

Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.  

Displaying blog entries 351-360 of 360





Contact Information

Team Cook Real Estate Services
The Cottage Realty Ltd.
908 Mountain Avenue
Berthoud CO 80513
Fax: 970-532-2699

"I have truly heard and seen first-hand that Cottage Realty is wonderful, exemplary, and a real asset to the economy of Northern Colorado. I will definitely keep Cottage Realty in mind as my first choice if and when I have real estate needs in the future. Again, thank you so much. I will also refer you to friends and family who need your services. Sincerely...Stacy"