2848 Russell Street at the corner of Pine, in Berkeley’s Elmwood Claremont Neighborhood!

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November 9, 2009

Dear Carol and Ira,

It is the eve of the closing of the sale of my house and I am reflecting back on the past 5 months – the length of time it took me to prepare both myself and this beautiful, unique structure for the transition. I had, as you will surely remember, a great deal of hesitation about selling the first and only house I will ever own, and went through a lengthy period of uncertainty before finally deciding that it was, for many reasons, the right thing to do.

As my neighbors and as a pervasive presence in the real estate market in Berkeley and Thousand Oaks, I turned to you for guidance and assurance in my decision. Your depth of knowledge and innate sense of market position and conditions were invaluable to someone who has never been through the process of selling a place they love and needs trusted resources to explain and smooth the way. In you, Ira, I found a marketing wizard with a profound understanding of, and enlightened approach to, technology and how it can be best-used in the presentation of property. On the opposite side, I found your thorough understanding of the morass of paperwork, city ordinances, and all things official, Carol, to be truly comforting, and the time you spent reviewing and expanding on documents and their purpose enormously helpful. But most of all, I valued working with you both because you are consummate professionals who go out of your way to make sure the sometimes-onerous business of selling is as calm and straightforward as possible. And you do it all with realism and unfailing good cheer. You obviously enjoy doing what you do, and your enthusiasm shows in every interaction with clients and colleagues alike.

As I write this, on this last night before relinquishing ownership, you are in the house putting up a fire alarm to fulfill a last-minute request from the buyer. I cannot thank you enough for making my life as easy as it could have been made during a period of high stress and doubt. I made the right decision to sell and hired the right people to help me.

Grazie Mille!

Janice Spampinato

Business Development Director, CACE Technologies, Inc.

And soon-to-be former owner of 690 Colusa Avenue, Berkeley, CA

The Extended Home Buyer Tax Credit for 2009/2010 was just signed in to law.

I went to realtor.org, the National Association of Realtors web site for more information. Click to read the entire National Association of Realtors summary

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Reading further, it says

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Interestingly, that seems to introduce a singularity into the home buying process. Assuming they otherwise qualify for the credit, buyers who are considering an offer of $806,500 to $808,000 will likely offer $800,000.

Why?

Because if they’re a first time homebuyer, they lose the credit if they offer > $800,000

Or put differently, an offer of $800,000 becomes an effective price of $792,000 to them. An offer of $800,001 becomes an effective price of $800,001 – $8,001 more.

Will be interesting to see how it all plays out.

I’m a Realtor with a strong mathematical background and NOT qualified to provide tax advice, so your Tax Advisor is the one to call to find out how the new law affects your purchase.