Common Questions: When Do I Have to Pay Back My First-Time Homebuyer Credit?

I was asked this question recently by a home owner and thought that this would start to be a more and more common question as we near the 36 month deadline established by the government when they instituted the  Housing and Economic Recovery Act. More specifically, they asked, "What happens to my tax credit if I buy a bigger house and rent out my first home?"


Important question: When did you buy your home? If you purchased your home in 2008 as part of the Housing and Economic Recovery Act of 2008, you  have to pay the entire amount back (up to $7500) in 15 installments of $500 as part of your tax returns, starting with your tax return for the year 2010. If you sell your home or it ceases to be your "main" home (i.e. you rent it out), you have to pay the remaining balance back when you file your tax return for the year in which you convert the house from your "main" home.


If you bought your home with the First-Time Homebuyer Credit under the Housing and Economic Recovery Act of 2009 or 2010, then the rules are a little different. You do not have to repay any the tax credit you received (up to $8000) if your house remains your "main" home for 36 months. However, if you sell your house or convert it entirely to a business or rental property, you must repay the full amount of the credit. 


Please let me know if you have any questions or there is anything I can help you with in regards to this topic! For much more detailed information on this topic, please see the IRS's website on the First-Time Homebuyer Credit. 

Disclaimer: I am not a CPA and am not offering tax advice. I am not liable for your interpretation of IRS tax law based on this summary. Please consult your CPA for answers and applications for your specific situations. 


Kyle Pfaffe, REALTOR      KylePfaffe@kw.com      512-636-9707      www.AustinHomes4You.com

In-N-Out Burger Cleared for Round Rock

Good news for Round Rock residents - on Wednesday, the City of Round Rock's Planning
and Zoning commission approved zoning changes near the Round Rock Premium Outlets that will allow for In-N-Out to build a drive-thru restaurant. If everything goes as planned, the California-based burger chain will open its first Central Texas store early next year. In-N-Out has already opened 15 stores in the Dallas area and now looks to expand to Central Texas.

I personally know a number of people who will be excited to hear this news. Do you have a favorite restuarant that has yet to opened a store in Central Texas? Please share!

For more info, see the store on KXAN

Kyle Pfaffe, REALTOR      KylePfaffe@kw.com      512-636-9707      www.AustinHomes4You.com

Customer Review - Buyer Representation

A review from Justin & Natalie, two clients of mine that I represented in buying their first home!

“We would completely recommend Kyle to anybody looking for a home. He is on top of his stuff – implicitly trustworthy and has walked us through a tumultuous process. He is a really stand-up guy to work with, a great family man and a complete professional.”

“It was our first home buying experience and what could have been a very stressful situation, Kyle made a very smooth transition and we would absolutely recommend him to anyone else looking to buy a home.”

June 2012 Market Report for Austin Real Estate

The Austin Board of Realtors just released the finalized statistics for June and the numbers showed the Austin had another great month! In June, there was a +13.5% increase in sold listings vs. June 2011. That makes June the 6^th consecutive month in 2012 that we have had an increase in sold units over 2011 – we have had a positive swing in EVERY month in 2012!

A few other numbers of interest… the average sale price in Austin is up 6.1% in June over 2011 to $278,720 and the average days on market shrunk to 55, a 25% decrease! Also, the percentage of sales price to list price is up to 97.8%. In short, homeowners are selling their homes more quickly and for closer to their asking price than last year! In total volume, over $745 million in real estate transactions were closed in June, a 20.5% increase.

Year-to-date, Austin is up 17% in number of units sold and up 21% in total sales volume. Austin’s market is HOT! Please contact me if you are interested in receiving a free market analysis of your home or interested in buying a home. With historic interest rates available, now is a great time to buy a home!

Kyle Pfaffe, REALTOR®
Keller Williams Realty
m: 512-636-9707
w: AustinHomes4You.com

Northwest Austin Real Estate Update - June 2012

The Austin Board of Realtors recently released the statistics for the month of June for Austin. This report is going to focus on the recent activity in northwest Austin (NW) which includes but is not limited to the neighborhoods of Milwood, Rattan Creek, Anderson Mill, Jollyville and Balcones. 

In June, there was one less sold listing in NW (89 vs. 90) but the average sold price increased 7.3% to $263,812.  The average days on market for a home sold in June in the northwest were 43 compared to 51 in 2011. Also, homes are selling for 98.3% of their list price, an increase from 97.4% in 2011. In summary, while about the same number of homes sold in 2012 as 2011, those home are selling on average for a higher price and more quickly than they did in 2011. The higher sale prices drove the total volume up 6% in 2012 to $23.5 million.

Year-to-date, 10% more homes have sold in the NW with over $93.2 million in real estate transactions being finalized. Austin’s market is HOT! Please contact me if you are interested in receiving a free market analysis of your home or interested in buying a home. With historic interest rates available, now is a great time to buy a home!

Kyle Pfaffe, REALTOR®
Keller Williams Realty
m: 512-636-9707
w: AustinHomes4You.com

Keller Williams Name in Top Ten Places to Work!

Keller Williams has been recognized as one of America’s Top 10 Workplaces, according to the first annual National Top Workplaces list compiled by Workplace Dynamics.  

The list of National Top Workplaces is based solely on employee feedback surveyed from 805 companies of more than 1,000 employees, which included over half a million survey responses. According to survey results, Keller Williams’ ranking was based on its overall culture and high levels of organizational health including training, benefits, compensation, and work-life balance. “Put simply, the most successful companies appear to be the ones that employees believe in," said Doug Claffey, CEO at WorkplaceDynamics (excerpt from Keller Williams press release).


Keller Williams mission is building careers worth having, businesses worth owning and lives worth living. I can personally attest to the strong culture KW has. KW is very deserving of this recognition and I am grateful to be a part of this great company!


For the full article, see http://topworkplaces.com/stories/americas-top10-workplaces.php

Neighborhood Information for Austin, TX 78757

Inventory

• Number of Homes: 10,487
• Active Listings: 91
• Distressed Listings (Foreclosures & Short Sales): 1.3%

Home Ownership

• Owned: 47.78%
• Rent: 45.65%
• Vacant: 6.57%

Demographics

• Median Age: 35
• 35% Married
• Homes with Children: 2405

Household Income Levels

Highest Education Level Attained

Data from Market Insider; deemed reliable but not guaranteed.

Kyle Pfaffe, REALTOR®
Keller Williams Realty
m: 512-636-9707
w: AustinHomes4You.com
I Always Have Time for Your Referrals!

Top Notch Burger in Crestview: Austin, TX (78757)

I visited Top Notch in Crestview, Austin, TX (78757) for the first time after wanting to go for a while. I love charcoal grilled burgers so I had try this restaurant. I ordered the regular cheeseburger with fries and it was good with the unmistakable charcoal taste I was looking for. Next time, I'll have to get their "Longhorn Special"! An Austin original and Crestview mainstay for over 40 years - try it yourself!

Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

e: KylePfaffe@KW.com

w: AustinHomes4You.com

Brentwood Park with the Kids!

I took the kids to Brentwood Park in the Crestview/Brentwood area (78757) in Austin, TX. Perfect weather and lots of fun!

Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

e: KylePfaffe@KW.com

w: AustinHomes4You.com

Crestview Real Estate Market Report, 2002-2011

Crestview Market Report (78757)

Real estate in the Crestview neighborhood of Austin, TX (within 78757), has seen phenomenal growth and changes in the last 10 years. Looking at only homes, condos and townhomes in Crestview, there were numerous changes in significant real estate metrics, including units sold, average and median sales prices, average and median prices per sqft., days on the market (DOM) and the average percent for sold-to-list price. Please call or email me for information on your particular home or on opportunities to buy or sell property in Crestview.
Sales Prices
In 2002, the the average sales price in Crestview was $159,702. At the Austin real estate market’s peak in 2006, when the most units were sold, the average price was $220,506. While total units sold dropped to only 122 in 2008, the average price still climbed to $263,876, a 65% increase vs. 2002! There has been some contraction since 2008, but prices have recently rebounded to be only -3% down from the peak, still +62%!
 
Units Sold & Days on Market
Number of units sold increased from 173 in 2002 to 246  in 2006, but then dropped sharply to only 122 in 2008. The average Crestview home sold in only 35 days in 2006, but that period grew to 63 days in 2010. The DOM remained constant in 2011 despite the +35% increase in units sold from 2010 to 2011.
Price Per Sqft. & Average Sold/List Price Percentage
The average price per sqft. grew from $142.69 in 2002 to $188.54 last year, a +32% increase. At its highest point in 2008, the avg. price per sqft. was $207.35. In 2011, the average sale price was only 96.45% of list price vs. 97.69% in 2002. The only time it was lower was in 2010 at 95.15%.
*Data Source: Austin MLS, 3/2/2012;  information is believed to be accurate but not guaranteed.
Kyle Pfaffe, REALTOR®
Keller Williams Realty
m: 512-636-9707
e: KylePfaffe@KW.com
w: AustinHomes4You.com

My Amazing Family!

Here are a few recent pictures of my family. They brighten my every day and are incredible motivation for everything I do! I love you guys!

Working With Purpose - My Big Why

I was recently introduced to a concept known “My Big Why.” The basic premise is that you have a specific motivation or purpose for your work. The principle is simple but the ramifications for myself are tremendous.

Every action we do is motivated by a certain desire to one degree or another.  My desire to sleep more keeps me in bed as long as I can. My desire to spend time with my wife and two kids drives me to get home from work as soon as possible. Having and knowing my one specific, foundational motivation to be successful in my work drives me throughout my day. My personal Big Why is to create a better life for my family and have time to enjoy it with them. This motivation inspires me to forgo that afternoon nap I so much enjoy and to work late into the night when needed.

My Big Why also creates tremendous focus in my life. I remind myself of it numerous times throughout my day to help me avoid distractions that cause me to waste my time. Other tasks might be good things to do, but ultimately hurt my productivity and prevent me from getting the most important things done first.

I encourage you to take a few moments today to think about exactly why it is that you do what you do. Evaluate your motivations discover your one driving purpose and use that to stimulate you and bring focus to your work when you need it.


Kyle Pfaffe, REALTOR®
Keller Williams Realty
m: 512-636-9707
e: KylePfaffe@KW.com
w: AustinHomes4You.com

2011 Housing Recap with 2012 Implications

Home Prices

• Historic Appreciation is 4% Nationally, but was -4% in 2011
• We were 24% below the trend line
• Current Rate of Depreciation is NOT Sustainable
• Gary Keller - "If you go above or below the trend line, there WILL be a correction."

Mortgage Rates

• This is THE Moment in History that rates are at their lowest
• NY Times called 2009 the "Golden Age" at 5%...Now as low as 3.87%!
• The rates could maybe drop only 1%, if lenders eliminated all profit. Odds of that happening?
• If money is a driver of when you buy...

The Affordability Index

• Affordability Index - percent of income needed to pay mortgage
• Homes have never been more AFFORDABLE in history of recorded time.
• "Why should I buy when prices are down 30%?" Think Price vs Value.
• Timing & Patience seperates Investors from Speculators

Perspective

• Have Perspective. Study History.
• Average Home Prices are +77%
• Average Monthly Payments are +1%

Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

w: AustinHomes4You.com

Understanding Tax Deductions for Rental Properties

Under the current economic distress, many U.S. households again see the benefit of renting versus home ownership. Others, unfortunately, have been forced to surrender their homes to financial institutions that hold their mortgages and return to their former status as contented tenants.


These challenges can represent opportunities for investors in residential rental properties. Tax laws favor investors in these properties who can often benefit from tax deductible losses, while maintaining positive cash flows on their properties.


In order to avoid jeopardizing these write-offs under the scrutiny of an Internal Revenue Service audit, it is good to know what an agent will be looking for. The IRS does not hide this information. Numerous audit technique guides are available not only to IRS personnel; they are published on the IRS website for public use. Of interest to investors in residential rental real estate is the Passive Activity Loss Audit Technique Guide. It offers guidance to agents as they consider the appropriateness of loss deductions, the calculation of gains or losses on disposition of investment property, and low-income housing credits, among other chapters.


This Guide may be found at http://www.irs.gov/pub/irs-mssp/pal.pdf.


Prepared by Corey A. Pfaffe, CPA, LLC
www.MinistryCPA.org


IRS Circular 230 Disclosure: To comply with IRS rules, I am required to advise you that, unless expressly stated otherwise, any federal tax advice contained in this communication, including attachments, is not intended or written to be used, and cannot be used, by the recipient for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.


September 23, 2011


Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

w: AustinHomes4You.com

I Always Have Time for Your Referrals!

Networking for the Introvert

I am a self-admitted introvert (You too? Read THIS). Maybe I'm not completely introverted, but I  am not the life of the party, find small talk somewhat boring, process emotions, thoughts and observations internally and tend to think before I respond. If you are not a "Type-A" personality and are anything like me, you might find it difficult at times self-promoting yourself and connecting with others about real estate, like we are led to believe is a "must" for successful real estate agents. While a lot of successful people are very outgoing and aggressive, I think that there are lot of excellent agents who are quite the opposite. So what are we to do? Below are a few tips that I have found to be helpful for myself when I have opportunities to network with other people and share with them my love for real estate.

1. Be INTENTIONAL! I don't always go out of my way to talk to people and I don't always talk to them about real estate, so when I do I want to make it count. When I sense opportunities to network and talk to people about  real estate, I try to have the right mindset and be purposeful in my conversation. I am purposeful in that I try to shape or turn the conversation so we can talk about my passion for real estate. The right mindset focuses me on making sure the conversation is a meaningful one and I either come away with a contact or the other person comes away with knowing who I am and how I can help them and the people they know. Are you intentional about your networking and what is your mindset in doing so?
2. Be EXCITED! When you have an opportunity to talk with other people about real estate, be excited and passionate about what you do! I love to work as a real estate agent, to work for the company that I do and to be able to help other people and I try to make sure that whoever I talk to about real estate definitely comes away from our conversation with that impression. Most conversations I have about real estate are with people I am meeting for the first time...I want to leave them with a great first impression! Are you excited about what you do? What first-impression are you giving people about yourself? 
3. Be YOURSELF! While networking and making sure your sphere of influence knows what you do and how you can help them, do not try to be something you are not. If you don't have a bubbly personality, don't try to act that way. Do not sacrifice your personality by trying to be everything to everybody. It will not last and eventually others will likely see you for who you really are. Even worse, they might see you as shallow or fake. Sincerity and integrity are vital in this business - you CANNOT give that up! Most people will accept you and like you for who you are! 

I hope that these few tips can help those of you who are like me and and at times struggle with being outgoing. Be comfortable with who you are and know what you must do to be successful! 

Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

w: AustinHomes4You.com

Image: renjith krishnan / FreeDigitalPhotos.net

Three Things to Know Before You Break Your Lease

Three Things to Know Before You Break Your Lease 

Unfortunately, life does not always work out as planned. If it did, I would already be semi-retired, sitting on the porch overlooking Lake Travis, proofreading this post that my assistant had just finished writing up for me. In the housing world, sometimes we make plans to live in a particular place for a particular amount of time and something comes up that forces to make a change...and we have to break our lease. This is not a decision to be taken lightly. Here are three things to know before you make that decision.

1. In short, your lease is a legally binding contract, promising that you will regularly pay rent to live in a certain place for a certain amount of time. There are legal and financial ramifications for breaking this contract. Within your lease agreement, you will find the specific details and consequences that occur when you make this decision. You are breaking your word that you would fulfill the terms of you agreement and you should take that very seriously.*

2. Breaking your lease will likely have a negative impact on your credit score and your credit report. Unless you pay up front for all the financial penalties for breaking your lease, that information will go on your credit report. As you well know, all delinquent and negative items on your credit report have a direct impact on the financial terms you are able to get or your ability to get approved for future credit applications. This information will be visible to anyone who will run your credit the next time you apply for credit of any sort.

3. Breaking your lease will also negatively affect your ability to be approved for a lease in the future. As part of your application process, along with your credit report, property management will check your rental history, and will likely find documentation on your previous broken lease. Unfortunately for someone in this situation, many properties will not approve an application for someone who has a previous broken lease, regardless of the circumstances. In fact, some property management companies look more favorably on an eviction on your record than an a broken lease. Some property management companies will approve an applicant with a broken lease on his or her record with a few possible stipulations. Those stipulations include, but are not limited to, and larger deposit or proof of positive rental history since the broken lease.

A broken lease is not something to be taken lightly. You should be careful before you sign a lease and understand that your lease is a legally binding contract. Be very cautious before you break a lease and understand the possible ramifications of doing so. That being said, a broken lease is not the “end of the world.” You do have options of places, albeit limited, to live if you do break a lease. If you have questions about breaking a lease or have had a broken lease in the past and need house help, please contact me and I would be happy to help however I can.


*I am not a lawyer and cannot offer you legal advice so please consult a lawyer for advice on your particular situation.


Kyle Pfaffe, REALTOR®

Keller Williams Realty

m: 512-636-9707

w: AustinHomes4You.com

I Always Have Time for Your Referrals!