Weekly Blog

Starting January 1, 2010, a new Environmental Protection Agency (EPA) mandate will change the way your clients' home air conditioners are serviced and repaired. At that time, manufacturing HVAC equipment that primarily utilizes Freon^® (also known as R-22 and HCFC-22) will be banned, and the nation will begin using products such as Puron^® (also known as R-410A) as the standard refrigerant for air conditioners. This change will affect your buyers and sellers in many ways.

Costs will increase

A variety of factors will lead to increased costs:

• R-22 parts may no longer be available.
• Since R-410A parts are not always interchangeable with R-22 parts, replacement of the entire system might be necessary.
• Physical changes to your system may be needed to accommodate the larger equipment required in air conditioners using R-410A refrigerant.
• The supply of R-22 refrigerant will be limited, causing the price to increase.
• Repairs may take longer because you may want to explore your options and wait for less expensive parts, if they are available.
• New HVAC equipment may be more expensive to purchase and install

Manufacturers' warranties may not provide full coverage

Typical manufacturers' warranties only cover parts for one year, in most cases. Labor is a significant part of any repair. Each manufacturer may take a different position if an R-22 system cannot be repaired or parts are not available.

System and appliance warranties/ service contracts typically exclude coverage resulting from government-mandated changes

Most system and appliance home service contracts/warranties contain language that effectively excludes the additional costs resulting from this government-mandated change. Each home service contract may deal with this situation differently.

Fairview Realty, Inc. endorses Home Warranty coverage for both Seller or Buyer in all transactions - this is one reason why...  Be sure to know what your warranty covers and to review it carefully with your real estate professional!  Feel free to call with any questions - our agents are happy to help!  Make it a great day!

All The Best,

Elizabeth

For all those who have inquired about the 2009 Homebuyer Tax credit, this article comes from rismedia.com...

November 9,2009:  President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.  The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. 

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program. 

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify. 

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return. 

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Hope this answers any questions you may have!  If not feel free to contact any one of our staff members - they're happy to help!

We believe a blog will be important to communicate information and our opinion of the market.   We plan to create a blog that is informative to our clients that they will feel like they have their pulse on the market.  Enjoy and let us know what you think.

Thank You,

The Staff at Fairview Realty