The New California Home Buyer Tax Credit

We’ve received a lot of comments and questions about our post on the new California Home Buyer Tax Credit. We’ve updated the post to clarify a few points and answer our readers’ questions.

By now, I’m sure most of you have heard about the extension of California’s $10K home buyer tax credit, which Governor Schwarzenegger signed into law on March 25. I’ve had a couple clients ask me about this, so I thought I would pass some info on to our Sweet Digsters.

Here are the highlights:

The program:

• California plans to spend around $200 million dollars to fund this tax credit.
• This is twice as much funding as the state’s previous home buyer tax credit, which was rolled out in March 2009 and exhausted by July 2009.

Who is eligible?

• The home buyer must be a California taxpayer.
• There is no limit on the income of the home buyer.
• The program is available to both existing homeowners and first-time home buyers.
• Current homeowners are eligible only if they buy a newly-built home.
• First-time home buyers are eligible whether they buy a newly-built or existing home.
  • To be a first time home buyer, you cannot have owned a home anywhere in the world during the three years prior to buying your new home. If you’re married, that applies to your spouse as well.

How much is the credit worth?

• The tax credit is worth up to 5% of the purchase price of the home, or $10K, whichever is less.

How does the home buyer receive the tax credit?

• The payment is credited against the home buyer’s annual CA state income tax.
• The total payment will be spread evenly over three years.
• If you qualify for the full $10K, you’d get up to $3,333 per year – but only if you pay at least that much in annual CA state income tax.
  • If your CA state income tax is $4,000 a year, you get a $3,333 credit against that amount, effectively lowering your state income tax to $667.
  • If you owe less than $3,333 per year in CA state income tax, you’ll receive a tax credit only for that amount. The extra will not roll over into the following year’s payment.
  • The credit will begin to be applied to the tax year in which the home was purchased. If you buy your home in 2010, the tax credit will begin to be applied against your 2010 taxes.
  • You cannot apply the tax credit to your 2009 taxes, even if you file your 2009 taxes after you purchase your home.

What’s the deadline for claiming the credit?

• Buyers of existing homes must close escrow between May 1 and December 31, 2010.
  
• Buyers of new homes can either:
  • Close escrow between May 1 and December 31, 2010, or…
  • If they are unable to close escrows during that time, they can reserve a credit by entering into an enforceable contract between May 1 and December 31. They must then file the proper paperwork with the tax board and close escrow by August 1, 2011.

What types of homes are eligible?

• Eligible home types include:
  • Single family homes
  • Condominiums
  • Units in a cooperative project
  • House boats
  • Manufactured homes
  • Mobile homes
• There is no price limit on the home purchase.
• A home constructed by the taxpayer is not eligible, since the home has not been “purchased.”

Can the new CA tax credit be combined with Federal Home Buyer Tax Credit?

Yes, but the window is very small. You will need to have your contracts signed by April 30, and you must close escrow between May 1^st (when the California program begins) and June 30^th (when the Federal program ends). The two programs combined could be worth up to $18K in tax credits.

However, remember to think carefully before diving in on a home purchase, regardless of any available tax credits. Buying a home is a major financial commitment. Don’t be lured into making a rash decision because you’re worried about missing out on “free” money. Instead, make sure that buying a home – with or without tax credits – is in your best long-term interests.

You can read more about the new California home buyer tax credit here.

Here’s the full language of the bill, AB 183.

Here’s California’s official website on the new home buyer tax credit.

–Brad Le, Redfin agent serving Silicon Valley and San Jose

Now We’re Showing More Homes for Sale, Even Faster!

Redfin’s database of homes for sale just got more comprehensive and faster in the greater LA area. Before, we got homes for sale directly from CLAW, which serves Los Angeles County, and MRMLS, which serves the Inland Empire and the South Bay. Now, we get those listings even faster from CARETS, (California Real Estate Technology Services), a larger database of Southern California Multiple Listing Services that real estate brokers use to list homes for sale.

Here’s what changed:

• Updated on the hour, every hour: We get updated listings from CLAW every hour. Before, we only could update them once a day.
• More homes for sale: We just added 145 more listings from CLAW and 217 more from MRMLS that we previously couldn’t show. There’s one catch: to see all the details for these homes for sale, MLS rules require that you sign in with a Redfin account or register with a verified email address before we can show you all the information.
• More amenities: Before, we couldn’t tell you whether the home has wood floors, if there’s a fireplace, whether the kitchen’s got marble counters. Now we can show all these details.

We plan on switching over even more Southern California MLS’s in the near future.

Questions about the updates? Just comment below or ask a question in our website forum.

Redfin Partner Agents Arrive in Santa Clarita!

Great news for folks in Santa Clarita: Redfin just partnered with four local agents to help our customers buy and sell homes. Check out our coverage area below.

In areas beyond the reach of Redfin agents in Southern California, Redfin partners with experienced, local agents whom we have carefully chosen to uphold our standards of customer service, transparency and experience. If you buy or sell a home with a Redfin partner, he or she will provide you with a 15% commission credit at closing, usually worth $1,000.

Meet Our Santa Clarita Partner Agents

We put our partner agent applicants through the ringer to ensure that our customers will get great service:

• Interviewed in-person by a Redfin market manager
• Completed at least 15 transactions as an agent
• Offered at least three customer references
• Agreed to survey every new client and publish every review
• Paid based on customer satisfaction; removed from the program for bad reviews

	Dee Dee Hubbard Serving Santa Clarita, East Ventura Homes Closed: 87+
	Mike Tagliere Serving Santa Clarita Homes Closed: 25+
	Christine Kulka Serving Santa Clarita Homes Closed: 31+
	Ken Grech Serving Santa Clarita, East Ventura Homes Closed: 300+

Apply to be a Redfin Partner

Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.

Redfin Partner Agents Arrive in the Coachella Valley!

Great news for folks in the great Palm Desert area: Redfin just partnered with local agents in East Coachella Valley and West Coachella Valley to help our customers buy and sell homes. Check out our coverage area below. West Coachella is in yellow, East Coachella in blue.

In areas beyond the reach of Redfin agents in Southern California, Redfin partners with experienced, local agents whom we have carefully chosen to uphold our standards of customer service, transparency and experience. If you buy or sell a home with a Redfin partner, he or she will provide you with a 15% commission credit at closing, usually worth $1,000.

Meet Our Coachella Valley Agents

We put our partner agent applicants through the ringer to ensure that our customers will get great service:

• Interviewed in-person by a Redfin market manager
• Completed at least 15 transactions as an agent
• Offered at least three customer references
• Agreed to survey every new client and publish every review
• Paid based on customer satisfaction; removed from the program for bad reviews

	Jeff Blacker Serving Palm Springs Area Homes Closed: 50+
	Ron Jesser Serving Palm Springs Area Homes Closed: 200+
	TJ McCaa Serving La Quinta, Palm Desert, Rancho Mirage, Indio Homes Closed: 75+
	Leonardo Montenegro Serving Coachella Valley Homes Closed: 32+
	Mark Weissmann Serving Coachella Valley Homes Closed: 35+

Apply to be a Redfin Partner

Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.

Advice from LA First-Time Home Buyers: “Keep Hope Alive!”

Marco Huerta and his wife Youngmin Bae were recently featured in the LA Times for buying their first home with Redfin. We decided to catch up with them and learn more about their experience buying a foreclosed home owned by the bank, also known as an REO (real estate owned).

Marco and Youngmin’s Story

We started looking for our first home in 2006. My wife and I both grew up in homes and were sick of living in apartments. We originally worked with a traditional agent and put in an offer on a home, but decided to pull out of the deal before our inspection contingency expired. After taking a break for a couple of years, we stumbled upon Redfin and loved using the map-based search. We signed up for updates on new listings, price reductions and scoured the details pages to monitor prices and movement of similar homes for sale.

We got pre-approved with our bank early on to set our price range, which was below $500,000. We knew we wanted a 3 bedroom, 2 bathroom house in a quiet neighborhood. We went on five Redfin home tours around Glendale, Mount Rose, Eagle Rock and Burbank and loved our field agent, Todd Lethbridge. He was knowledgeable about the homes, always laid out the pros and cons for each property and never glossed over any potential issues. Redfin agent Joyti Goundar helped us on a few offers that didn’t pan out. But then in November 2008, we found an REO home in Burbank that we loved. We were able to go see it the day after it went on the market. The home was owned by Countrywide (now owned by Bank of America), and they require that buyers get pre-approved with them to put in offer on homes they list for sale. So we started the pre-approval process and put in an offer two days later, but learned that the bank had already accepted an offer from someone else!

Feeling a little discouraged, we decided to take a break for a few months. But then one day in late January, my wife decided to check Redfin and noticed that the home we had found was recently re-listed! We sprung into action and called Joyti who quickly helped us put an offer together. We then got pre-approved with Countrywide, so they knew we meant business. Our offer was accepted the next day — even for $10,000 below list price!

Marco and Youngmin’s Advice for First-Time Buyers

1. Be pro-active: it may seem like there’s a lot of inventory out there, but there’s also a lot of competition. The good homes will sell fast. We’re so glad we checked Redfin again because we probably wouldn’t have known our home was back on the market until it was too late. If you’re looking at an REO, check to see if you need to get pre-approved with the bank that owns the home. We were lucky to know that Countrywide required us to be pre-approved with them; so when the home went back on the market, we were ready to make an offer.
2. Get a thorough inspection: we knew our house might need some repairs, so in addition to the general inspection, we brought in a chimney inspector, sewage and pipes, and an electrician to evaluate the home for potential issues. Banks usually never pay for repairs, but I decided to create a detailed outline of all the problems and potential risks associated with some of the issues with home and presented it to the bank. They ended up giving us around $4,300 for repairs!
3. Choose a mortgage lender carefully: we monitored rates on Bankrate.com and researched all the different types of fees associated with loans. We met in-person with lenders at our local credit union as well as Wells Fargo. After comparing each good faith estimate carefully, we ended up going with Countrywide where we originally got pre-approved. They gave us the best rate and even waived our appraisal fee.

The market is tough, but don’t get too discouraged. If the right house comes along, make sure you’re prepared to make an offer and you just may end up with the perfect place!

Redfin’s February Update: 740 Homes Toured, 207 Offers

Beginning with February, Redfin is publishing monthly Southern California real estate stats, summarizing what we’re up to in the market, and how the market is changing. This is our first crack at it, which means we’ll only present a few numbers for February.

Market Activity

• 31,978 new MLS listings (the current total is 127,314).
• 30,028 price reductions.
• 239,241 homes were added to Southern California Redfin users’ favorites list

Brokerage Activity

• 740 homes were toured by our clients through Redfin field agents.
• 30 people attended our home buying class.
• 207 clients made offers (real estate owned (REOs) listings made up 39% of Redfin’s offers on homes since the beginning of the year).
• 23 clients responded to our customer-satisfaction surveys and posted an online review.
• 96% of our February Southern California Area clients would recommend Redfin to a friend.

What else do you want to know? Your comments and suggestions are at the core of our goal to better serve our customers. We’d love to hear from you. If you haven’t already, join the Los Angeles/Orange County Redfin forum and sign up for listing alerts and our monthly newsletter. As always, thanks for using Redfin!

Meet Redfin’s Partner Agents in the Inland Empire

Our customers keep asking us, “When are you coming to my area?” Well, the wait is over for folks in North and South Riverside, Pomona, San Bernardino, and Ventura Counties. Redfin is now partnering with agents in outlying areas beyond our local agents’ reach to bring our values of fanatical service, data-driven performance and better value to your neighborhood.

Many Applied, Few Were Chosen

We put our partners through the ringer by conducting in-person interviews and requiring at least three customer referrals; the average Redfin partner in the greater Los Angeles area has completed over 320 deals. All of our partner agents have embraced Redfin’s transparency ideal: you see every transaction and every customer review, good and bad. Just like with Redfin’s own agents, there’s no obligation. In addition to getting great service, you’ll also save money — usually around $1,000-$2,000.

Learn more about our partner agent program by reading Redfin CEO Glenn Kelman’s blog post.

If you’re an agent and you’d like to become a Redfin partner, please get in touch.

Sign up to be notified when we come to your area because in the next three months, Redfin will be adding partner agents in Coachella, Santa Clarita and Palmdale.

Partner Agents Serving North and South Riverside, Pomona, San Bernardino, and Ventura Counties

	Derek Serving Pomona Valley, North Riverside County, San Bernardino Valley Homes Closed: 1349+ Experience: 23 years
	Jeannette Serving San Bernardino Valley, Pomona Valley, North Riverside County Homes Closed: 35+ Experience: 11 years
	Julie Serving San Bernardino Valley, North Riverside County, Pomona Valley Homes Closed: 38+ Experience: 3 years
	Mona Serving North Riverside County Homes Closed: 700+ Experience: 26 years
	Scott Serving North Riverside County Homes Closed: 172+ Experience: 7 years
	Sidney Serving North Riverside County, San Bernardino Valley Homes Closed: 31+ Experience: 4 years
	Terrie Serving North Riverside County, San Bernardino Valley Homes Closed: 54+ Experience: 9 years
	Karen Serving South Riverside County Homes Closed: 227+ Experience: 21 years
	Barbie Serving South Riverside County Homes Closed: 780+ Experience: 19 years
	Kurt Serving South Riverside County Homes Closed: 37+ Experience: 17 years
	Miguel Serving South Riverside County Homes Closed: 25+ Experience: 5 years
	Nancy Serving South Riverside County Homes Closed: 283+ Experience: 20 years
	Sergio Serving South Riverside County Homes Closed: 122+ Experience: 10 years
	Christy Serving Ventura County Homes Closed: 50+ Experience: 6 years
	Debbie Serving Ventura County Homes Closed: 105+ Experience: 5 years
	Deborah Serving Ventura County Homes Closed: 550+ Experience: 23 years
	Deborah Serving Ventura County Homes Closed: 82+ Experience: 7 years
	Dee Dee Serving Ventura County Homes Closed: 87+ Experience: 7 years
	Gregg Serving Ventura County Homes Closed: 172+ Experience: 8 years
	Michele Serving Ventura County Homes Closed: 47+ Experience: 7 years
	Zane Serving Ventura County Homes Closed: 550+ Experience: 20 years