Homebuyer tax credit causing headaches and trouble

Homebuyer tax credit causing headaches and trouble

The federal homebuyer tax credit did its job to boost the real estate market, but many involved – from buyers to the IRS – have run into problems with confusing wording and stipulations.

The result: Hundreds of thousands who’ve already filed for the credit will have to give the money back.

More than 2.6 million eligible for the credit have bought homes since July 2008. They’ve received $19 billion in tax breaks.

But it turns out nearly half of those who received the money for the credit, claimed on their 2009 tax returns, will have to return it, according to an audit from the U.S. Treasury Inspector General for Tax Administration.

Apthorp Rentals Raise Questions [New York City]

Apthorp Rentals Raise Questions [New York City]

Some recent condominium buyers at Manhattan’s famed Apthorp building are looking to rent their newly purchased apartments, a move that may conflict with their signed declarations to use the apartments as their own residencies.

The effort by some owners to rent out their condos could spark additional scrutiny from the New York attorney general into the Apthorp, the financially challenged Upper West Side building famous for celebrity residents and its grand architecture.

In May, Attorney General Andrew Cuomo’s office accepted the Apthorp’s plan to convert 163 apartments to condos. That approval was based on at least 15% of the units, or 25 apartments, being in contract. According to state law, the sales only count if the buyer or an immediate family member intends to live at least part time there.

So far, about 20 sales have closed and about 16 are in contract. When the units sold, the Apthorp developers, a group lead by Africa Israel USA, required buyers to sign a declaration that they or a family member would occupy the units as a residence, a customary process with such conversions, according to people with the matter. But at least three of the units have now been listed for rent on broker websites.

Study: Nearly a quarter of all U.S. foreign buyers choose Florida

Study: Nearly a quarter of all U.S. foreign buyers choose Florida

International buyers have helped buttress Florida’s real estate market with 22 percent of all foreign clients nationally choosing property in the Sunshine State.

That makes Florida tops for attracting foreign interest, according to a summer report by the National Association of Realtors. California came in a far second with 12 percent of the international market.

While Florida’s share of foreign clients has slipped from a recent high of more than 26 percent in 2008, bargain basement prices and a weakened dollar have continued to lure Canadian and overseas buyers.

The study, which looked at sales between March 2009 and March 2010, found that buyers with permanent residences outside the United States spent an estimated $41 billion on residential property nationally during the period of the study — that’s 4 percent of the total residential market during the same time.

Walking away from your mortgage isn’t risk free

Walking away from your mortgage isn’t risk free

For underwater homeowners who think they’ve found a solution to their predicament–stop paying the mortgage and remain in the house until they are forced out by foreclosure–the consequences of such a decision are not as simple as they may seem.

The short-term advantages of a “strategic default” are tempting. The notion of continuing to pay far more than a house is valued at today, or owing more than you think it will be worth five or even 10 years from now, is enough to prompt many people to walk away.

The foreclosure process can be a long one. In many cases, people who decide to stop paying can reap the benefits of free housing — or in the case of investment homes, a free and clear income stream in the form of rent — for more than a year before they are evicted from the property.

Homeowner fees ‘like extortion,’ homeowner says

Homeowner fees ‘like extortion,’ homeowner says.

Two days before closing on a house, Eugene Vrooman got bad news: If he didn’t come up with $14,000, the homeowners association wouldn’t allow his deal to go through.

In addition to unpaid assessments, the Bridgewater Community Association demanded money for cosmetic repairs to the home, which had been vacant for more than a year. It wanted the exterior of the 4-year-old house cleaned and painted, weeds pulled and new sod.

"My wife and I were just devastated," Vrooman said. "We’ve been working on this deal for six months. We planned to clean up the home, but we want to do the work ourselves, not some homeowners association. This just feels like extortion."

Co-Op Maintenance Fees Are Rising

Co-Op Maintenance Fees Are Rising.

The average co-op maintenance fee in New York City climbed 19% from 2009 to 2010 to $1.76 per square foot per month, according to Miller Samuel, a Manhattan-based appraisal company that tracks maintenance costs.

The main driver behind the fee increases has been a jump in property taxes brought on by rising state and local debt. Property tax revenue from New York City co-ops increased 9.68% to $12.8 million in 2009, the most recent data available, according to the NYC Department of Finance.

Co-op boards looking to offset rising property taxes have few options but to raise maintenance fees, which shareholders (the people who purchase each unit) pay on a monthly basis separate from their mortgage.