Going green pays and saves.  According to a study by the Joint Center for Housing Studies of Harvard University, for every dollar decrease in annual home energy expenditures, house values increase between $11.63 and $20.73.

Also, going green can lower the tax bill.  New federal tax credits are now available for green home improvements on a principal residence.  Qualifying modifications must meet a certain energy efficiency level to be eligible for the credit.

The credits are available for improvements purchased and in service from January 1, 2009, through December 31, 2010.  The amount of the credit is deducted from any income taxes the homeowner may owe. The credit is nonrefundable, allowing taxpayers to lower their tax liability to zero, but not below zero.

Tax credits are available at 30% of the cost, up to $1,500, in 2009 through December 31, 2010 (for existing homes only) for:

• Windows and Doors
• Insulation
• Roofs (Metal and Asphalt)
• Heating, Ventilating, and Air Conditioning (HVAC)
• Water Heaters (non-solar)
• Biomass Stoves

Tax credits are available at 30% of the cost, with no upper limit through December 31, 2016 (for existing homes and new construction) for:

• Geothermal Heat Pumps
• Solar Panels
• Solar Water Heaters
• Small Wind Energy Systems
• Fuel Cells

Make sure you purchase products that come with a Manufacturer Certification Statement — a statement from the manufacturer that indicates the product qualifies for the tax credit. For record keeping, experts advise that homeowners retain all receipts.

Additional details can be found at www.energystar.gov/taxcredits and www.homedepot.com/taxcredit

Also feel free to contact a Warren Residential Group agents at contact@warrenre.com or call us at 617-848-9616 to find out more!

To search for a house that you can turn green, CLICK HERE!

Brian Cavanaugh of Wells Fargo Home Mortgage just sent me an interesting email in regards to when to schedule your closing to take advantage of the $8000 tax credit:

The $8,000 First-Time Home Buyer Tax Credit expires November 30, 2009.  In order to claim the tax credit, the IRS requires that you’ve closed on or before that date.  December 1, 2009 is too late.

But that doesn’t mean that first-time home buyers should target November 30, 2009 as a closing date. In fact, there may not be a worse day in 2009 on which to try to close on a home.  The optimal time is during the week of November 16, 2009 and the earlier in the week, the better.

To understand why, let’s start with the fact the home sales volume is through the roof, and then we’ll look at a calendar.

New Home Sales data and Existing Home Sales data has been unexpectedly strong and first-time buyers account for nearly 1/3 of all transactions.  Furthermore, the Pending Home Sales reports tell us sales volume is still growing.

It’s reasonable to infer, therefore, with home prices still low and with mortgage rates still down, buyer interest will stay strong all the way through the November 30, 2009 deadline — especially as trade groups trumpet “The End Of The Incentive”. There will be a mini-panic as everyone tries to close in time to claim their $8,000.

This is when it starts to get messy.  Check out the calendar.

• November 30, 2009 is the Monday after Thanksgiving Weekend.
• November 28-29, 2009 is a weekend.  No closings on weekends.
• November 27, 2009 is the Friday after Thanksgiving — an unofficial holiday.
• November 26, 2009 is Thanksgiving — an actual holiday. No closings.
• November 25, 2009 is the day before Thanksgiving — a national “half-day”.

So, that backs up the November 30, 2009 first-time home buyer tax credit deadline by 6 days to November 24, 2009 — a Tuesday.

And I won’t tell you that closing on Tuesday, November 24, 2009 is a bad idea, but I’ve been in this business long enough to know that there’s always a chance for something to go wrong. And when it does, you’re going to want some sort of a cushion between the “the problem” and “the deadline”.

Maybe it will be a problem on your final walk-through, or with your mortgage loan documents.  But as the buyer of a home — the largest purchase you’ve made in your life to-date — the last thing you’re going to want is to feel pressured into signing your paperwork because of worries over an $8,000 tax credit.

Therefore, don’t mess.  Schedule your closing for the week of November 16, 2009, instead.  That way you’ll have plenty of time to work through whatever needs to be worked out in connection with your home and your home loan. With a closing set for the 16th, you’ll meet your tax credit deadline with plenty of time to spare.

That said, the clock is winding down.

If you haven’t started your home search yet or aren’t under contract, it’s seriously time to get cracking.  Purchase closings come 60-day default.  Sometimes, you can negotiate them down to 45 days or 30 days, but, for the most part, 60 days is the standard– especially if you’re buying a short sale.

Counting backwards from November 16, therefore, renders September 17, 2009 the last day to go under contract and be sure of collecting that $8,000 tax credit.

It’s a scant 24 days from now.

If you’re a first-time home buyer and just starting your research, I encourage you to call or // email me directly with your First-Time Home Buyer Tax Credit questions about how the program works.  The IRS has a straight-forward form  you can read but it may not be “personal” enough to address your particular needs.

Sometimes, you need the human element, though.

If there are any questions regarding this buyer please feel free to contact Brian Cavanaugh at (617) 771-5021.

One of the major real estate related topics of the Obama stimulus bill is the first time home buyer tax credit.  While nothing is set in stone as of right now here is a rough play-by-play.

The Tax Credit Right Now:

-As of right now, first time home buyers who fit w/in income guidelines of not more than $95,000 per individual and $170,000 for married taxpayers get a $7500 tax credit if they purchase a home.

-The easiest way to explain a tax credit is by example.  Say after doing your 2008 taxes you realize you owe the IRS $2000.  After applying the $7500 tax credit to that you would actually get a refund of $5500.  Another example would be if your refund was going to be $1500 and then you applied the tax credit, you would actually get a check from the IRS for $9000.  Pretty sweet deal huh?

-However, there is a small catch.  The Tax Credit as it stands right now has to be paid back.  It is considered an interest free loan for 15 years.  After the first two years you must start paying it back at the rate of $500/year.

The Original Proposal for the Stimulus Bill:

- The original proposal for the stimulus bill was to increase this tax credit to $15,000 and make is so you wouldn’t have to pay the loan back.

The New Proposal Set to Be Finalized by the President This Week:

-After long negotiations the “final plan” is that the credit will be increased to $8000 and also made so it won’t have to be repaid.

My Thoughts: This is great for first time home buyers and hopefully will get some people off the fence.  We have clients that when combining this with some developer incentives at new projects are getting a significant amount of cash to play with which can be put towards upgrades, future condo fees, etc.  I think to really make this an effective proposal and stimulate the real estate market it has to become available to every purchaser, not just first time home buyers.