Good ‘Ole Texas Brisket

It’s been a while since I’ve posted anything to my blog.  I decided there was no better way to start than by recapping Smoked Brisket from our friends at http://www.texasbbqrub.com

For the record, I do follow most of the recommendations that follow.  i have never used Worcestershire Sauce on my brisket.  I also make my own rub.  Other than, this is exactly how I make my brisket.

I do want to add, I am a big advocate of finishing my brisket in the oven.  I like to start cooking my brisket in the oven about noon.  I’ll spend all day coaxing the fire along, taking great care to keep the temperature under 250 degrees.  About 10:00 or 11:00pm, I like to bring the meat in and wrap in tightly in foil.  Then I’ll place it in the oven (set at 180 degrees) over night. When I wake up the house smells terrific and lunch is almost ready!

TEXAS STYLE BBQ BEEF BRISKET

This is the mainstay for most BBQ’s down here in Texas.  This is the same way I cook all of my brisket and have done so for years.

What you will need.

1- whole untrimmed brisket (they can be from 10 to 14 pounds) Get a small one if you
don’t have a long time to cook. This recipe also works for brisket flats with a less of a
cooking time

TIP: When selecting a brisket to cook look for a brisket that has nice white fat on it.
Then look for a nice grain to the meat. The grain should have a nice marbeling
of fat spreading thru the meat. The white fat indicates the cow was fed with grain
and not grass fed. I also like to find a brisket that the thin end (the flat) is fairly thick.

¼ cup of Worcestershire sauce
1 ½ to 2 cups of TEXAS BBQ RUB

TIP: The colder the meat is when you get it on the smoker the better your smoke ring will
be. So take the brisket out of the frig and prepare it right away and put it on the
smoker immediately after the rub has been applied. If you wish to let the rub sit on
the brisket for several hours then you need to cover it in foil and place it back in the
frig until you are ready to get it on the pit.

First, I never trim a brisket. You want the fat on the meat while it is smoking. The brisket will have 1 side that is covered with fat and the other side with just a little fat. Start with the fat side and shake Worcestershire sauce on it and rub it with your hands all over the fat side of the brisket (including the sides and ends). Next take a handful of TEXAS BBQ RUB and rub it over the fat side of the brisket right on top of the Worcestershire sauce. Apply the rub fairly thin on the fat side of the brisket.  Remember this piece of meat is big and is going to be cooking for quite a while. Flip the brisket over and repeat the Worcestershire sauce and rub routine on the other side of the brisket. Since this is the side that will cook up on the pit apply about 1½ handfuls of rub on this side. You will notice that the rub has started to turn into a paste. This is what you want to see. If it is not then add a little more Worcestershire sauce. That is it, it is ready to cook.

Use the indirect method of cooking, use a great tasting wood flavor (I use mesquite) and place the brisket, fat side down on the rack in the cooker. Point the thick side of the brisket toward the heat source. Cook as follows:

200 degrees – Cook for a total of 10 to 16 hours
225 degrees – Cook for a total of 9 to 12 hours

The brisket will be done when a food thermometer reads 195 to 200 degrees internal meat temp and is usually done before the above cooking times but you need to cook it long and slow. The longer it cooks the more tender it gets so if you want to take the brisket to an internal meat temp of 205 degrees that is fine.

OK now for the SECRET that will make your brisket as tender as any meat you have ever eaten. About 2/3 of the way through the cooking of the brisket you are going to wrap the brisket in aluminum foil. Double wrap in foil. Tear off about 2 pieces of heavy-duty foil approx. 24 inches to 30 inches long. Take the brisket off of the cooker (don’t poke it with a fork or anything else as you let out great juices) I use heavy rubber gloves to handle all of my meat with. (You can get the gloves on our website and they are a great tool to use when cooking meat. They are only $10 a pair with free shipping. You can order them at www.texasbbqrub.com/shopping.html) The brisket is going to be real hot so be careful. Place the brisket on the first sheet of foil. Fold up the edges of the foil to keep the sauce we are getting ready to add from getting everywhere. Take about ½ of a can of Regular Coke or Dr. Pepper (not the diet stuff) and pour over the brisket (you should still be fat side down). Now wrap it in the first piece of foil, then wrap another piece around that. Place it back on the pit, fat side down again. Finish cooking. When you are ready to take off the pit be real careful as you might tear the foil and the sauce and juices of the meat can get on you and they will be hot. Take the brisket in and let it rest (cool down) approx. 1 to 2 hours. I take my knife and scrape off the fat on the top of the brisket and then cut into ¼ inch pieces against the grain. The fat end of the brisket has more fat than the thin end. With a little practice you will learn how to carve off the fat before slicing.

TIP: Get Some sleep by doing this

Here is a tip that will save you some time at the pit. If you want to catch some sleep you can finish the brisket off in the oven. At the time it is wrapped just put the wrapped brisket in a large pan with about 2 inch sides and place it in the oven at 200 degrees. This will finish off the brisket and give you a chance to get some sleep. As for smoke flavor the brisket will only take on smoke flavor the first 6 to 8 hours so you just need heat to finish the brisket off.

A brisket will lose approx. 30% of its weight during cooking. You can figure approx. ½ pound of meat per person. And the leftovers (I hope you have some) are even better the day after you cook. Make a brisket sandwich with cold brisket or heat it back up by wrapping it in foil and heating it at a low temperature.

 

First Time Homebuyer Tax Credit

Recently I received a call to action from the National Association of Realtors. In the e-mail they sent I was asked to contact my Congressman and Senators to encourage them to extend or even raise the First Time Homebuyer Tax Credit.

This past week I received a letter from my Congressman, Soloman Ortiz. In his letter he agreed that the Tax credit for First Time Homebuyers was important. He went on though to tell me that although it’s important, it’s not an issue he is going to get involved with. In his view it is much more important to work on Health Care Reform.

I will agree that there needs to be some reform to the Health Care System. It is out of control. I have to admit though, It seems irresponsible to me for a Lawmaker to totally distance himself fram any other subject just to Socialize Medicine in the United States!

I realized this is an important subject. I also realize it’s importance to Congressman Ortiz. Perhaps if Mr. Ortiz is no longer able to focus on more than one issue at a time we shouldn’t elect him to a 15th term

 

10 Mistakes First-Time Home Buyers Make

This is an article I found on Yahoo.com this afternoon.  I thought this was advice everyone could benefit from:

By Lisa Scherzer, SmartMoney.com

Apr 10th, 2009

The declining home values that are plaguing homeowners are just one of the factors creating an opportunity for prospective home buyers.

Standard & Poor’s latest Case-Shiller index, which tracks home prices across 20 major U.S. cities, reported that values dropped 19% in January from a year earlier.

Those depressed values, combined with near-record-low mortgage rates and government incentives (an $8,000 first-time home buyers’ tax credit included in the stimulus bill), are luring more first-time home buyers into the market. Indeed, a recent Century 21 Real Estate survey found that more than three-quarters (78%) of potential first-time home buyers say now is a good time to buy.

If you agree, be aware that buying a home comes with plenty of potential missteps. Here are 10 all-too-common mistakes first-timers make.

1. Not knowing how much house you can afford.

Many novice home buyers spend a lot of time researching homes – comparing kitchen layouts and backyard square footage – but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get preapproved for a mortgage, says Claire Clark, senior vice president of business development at Prudential California Realty. Without first figuring out how much house you can afford, you risk falling in love with one you can’t.

2. Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly, says Jay Michael, partner at Estate Property Group, a Chicago real estate brokerage, so you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home.

3. Letting your true feelings show.

No matter how much you’ve fallen in love with a house, don’t let the seller’s agent in on it. Otherwise, they will gain the upper hand in negotiations.

4. Failing to find a good buyer’s agent.

Landing a mortgage is tough these days. So buyers should rely heavily on knowledgeable agents to help them get their finances in order, says Michael. After all, buyer’s agents have a fiduciary responsibility to the buyer exclusively — and should be looking out for their best interests. Start your search at the National Association of Exclusive Buyer Agents, a nonprofit representing buyers. Or consider using an agent recommended by a relative or friend. Interview each candidate about their experience, if they’ve worked with first-time buyers before and what kind of service you’ll get from them.

5. Underestimating the costs of owning a home.

Whether it’s a rusty pipe or a leaky roof, things go wrong and need to be fixed. Many home buyers don’t anticipate the additional costs for repair and maintenance, or for an increase in utility costs, says Erin Baehr, CFP and president of Baehr Family Financial. Consider the age of your new home and how well it’s been treated by the previous owners in your budget. Be prepared to set aside a small percentage (1% at most) of the home’s purchase price annually for repairs and upkeep.

6. Failing to budget for property taxes.

Property taxes – and the likelihood that they’ll climb over the course of your time in the house – should be factored into any home-buying budget, says Baehr. To get an idea of how much you’ll be paying, call the local assessor’s office or talk to people in the neighborhood.

7. Assuming your first offer will get accepted.

As home prices get even more affordable, competition is bound to heat up. “You can’t assume you’ll walk in there, make the offer and get it,” says Clark. Try not to get discouraged if you lose out on the first – or second – house you make an offer on.

8. Skipping the inspection.

Before signing anything, hire a professional inspector, says Justin Lopatin, a mortgage planner with American Street Mortgage Company. The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated. Lopatin advises buyers to find and hire their own inspector – independently of the realtor – to ensure there’s no conflict of interest. (You can find inspection companies in the phone book, or by doing a simple web search with your zip code.)

9. Doing too much too fast.

Some buyers want to make the house their own right away, says Baehr. They overextend themselves on credit to do so, and assume the improvement will pay for itself by increasing the home’s value. But that’s not always the case – especially in today’s market. Instead, buyers need to exhibit patience and make changes over time.

10. Failing to include a contingency clause in the contract.

A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in under the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house, says Lopatin.

 

Bankruptcy Judges can’t re-write mortgages, yet

WASHINGTON (AP) — A dispute among House Democrats stalled legislation Thursday to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners.

The measure, backed by President Barack Obama, is the most controversial part of a broader housing package that had been expected to pass the House this week.

It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill it.

This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes.

But banks want to go much further, restricting the bill only to subprime or other exotic loans.

Centrist House Democrats who have been working closely with the financial services industry to scale back the bill balked at supporting it on Thursday after a news report suggested that Sen. Dick Durbin, D-Ill., the lead sponsor of the bankruptcy measure in the Senate, was willing to limit it only to subprime mortgages. The Senate is expected to take up the legislation within two weeks.

In the House, Rep. Ellen Tauscher, D-Calif., the head of the business-minded New Democrat Coalition, raised concerns during the private session that the measure omitted help for homeowners who aren’t staring at bankruptcy but are buckling under burdensome mortgage payments.

House leaders said they had postponed a vote until Tuesday to give Democrats time to meet with Obama’s housing secretary, Shaun Donovan, about how the measure fits with his housing plan.

“There’s an equity question here,” said Rep. Ed Perlmutter, D-Colo., another member of the coalition. “The discussion has got to be, what’s the benefit to the guy next door who is struggling to pay the bills, is paying the bills and isn’t filing for bankruptcy?”

Democratic skeptics are worried “that this could be too hard on the banks,” said Rep. John Conyers, D-Mich., the Judiciary Committee chairman who sponsored the bill.

Consumer advocates and most Democrats regard the measure as crucial to slowing the rapid rate of foreclosures. They say it’s the only way to force mortgage holders — known as loan servicers — to take steps to help homeowners stay in their homes.

The mortgage industry contends, however, that the measure will impose steep and unpredictable costs on its companies, which will be forced to raise fees and interest rates for borrowers. Opponents, including most Republicans, call it the “cram-down.”

Separately, Donovan told senators Thursday that limiting the measure to loans that have already been made should alleviate concerns that lenders would be forced to charge higher interest rates to compensate for the additional risk of a potential “cram-down.”

“The idea is not to have an impact on lenders that are out making loans today,” Donovan said.

In the House, the bankruptcy measure is part of a broader housing plan that also would raise the Federal Deposit Insurance Corporation’s borrowing authority and take other steps to prevent foreclosures. It contains several sweeteners for the mortgage industry designed to prod servicers to allow struggling homeowners to modify or refinance their home loans to bring down their monthly payments.

 

Mortgage Deduction at Risk in U.S. Budget

A new proposal in the Obama administration’s federal budget outline would limit the mortgage interest deduction (MID) amount for thousands of families, which would impact the housing market for everyone.  The NATIONAL ASSOCIATION OF REALTORS®, which has supported the Obama administration’s housing and stimulus plans, is opposed to this proposal.

NAR President Charles McMillan has sent a letter to President Obama, saying that “there is never a good time to propose something that undermines the basic foundation of homeownership.”

McMillan also released the following statement to members this afternoon: “Fellow REALTOR®, You may have seen news reports about President Obama’s Budget Proposal that was released today at 11:30 a.m., Eastern Time.  A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation.  NAR is 100 percent opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.

As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000.  This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values.  If this proposal is enacted it will set off a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines.  A second credit crisis could emerge before the first one is resolved.

As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan.  In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, D.C., decision makers.  Additionally, NAR will be forming a coalition with other groups affected by this proposal. This communication is the first salvo of our response, we will continue to update you as the situation and events warrant.”

Source: NAR

 

First Time Homebuyer Tax Credit

Because there have been so many questions about this credit, here are some answers to some frequently asked questions:

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

1. What’s this new homebuyer tax incentive for 2009?
The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible?
Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. How does a tax credit work?
Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual’s income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 – $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?
This tax credit is what’s called “refundable” credit. Thus, if the eligible purchaser’s total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference
between $8000 credit amount and the amount of tax liability. ($8000 – $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?
A few examples are provided at the end of this document. There are several steps in this calculation, but most income tax software programs are equipped to make that determination.

6. Is there an income restriction?
Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my “income” determined?
For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year?
Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?
Not always. The credit phases-out between $75,000 – $95,000 for singles and $150,000 – $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual’s income reaches $95,000 (single return) or $170,000 (joint return). For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown: Couple’s income $165,000 Income limit 150,000 Excess income $15,000 The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).
In this example, the disallowed portion of the credit is 75% of $8000, or $6000 ($15,000/$20,000 = 75% x $8000 = $6000) Stated another way, only 25% of the credit amount would be allowed. In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What’s the definition of “principal residence?”
Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as “owner-occupied” housing. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property?
Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property?
In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit?
NO. There is no repayment for 2009 tax credits.

14. Do 2008 purchasers still have to repay their tax credit?
YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return. Some Practical Questions

15. How do I apply for the credit?
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at http://www.irs.gov.

16. So I can’t use the credit amount as part of my downpayment?
No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

17. So there’s no way to get any cash flow benefits before I file my tax return?
Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments. Some “Real World” Examples

18. What if I purchase later this year but can’t get to settlement before December 1?
The credit is available for purchases before December 1, 2009. A home is considered as “purchased” when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before December 1, 2009 for purchases to be eligible for the credit.

19. I haven’t even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?
You’ll have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009. They actually have three filing options.
If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15.
They can extend their 2008 income-tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but the taxpayer must file for the extension. See http://www.irs.gov for instructions on how to obtain an extension.)
If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X. (Form 1040X is available at http://www.irs.gov)
Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.

20. I purchased my home in early 2009 before the stimulus bill was enacted. I claimed a $7500 tax credit on my 2008 return as prior law had permitted. Am I restricted to just a $7500 credit?
No, you would qualify for the $8000 credit. Eligible purchasers who have already claimed the $7500 credit on a 2008 return for a 2009 purchase may file an amended return (IRS Form 1040X) for the 2008 tax year. This amended return will enable them to obtain the additional $500 credit amount.

21. If I claim my 2009 $8000 credit on my 2008 tax return, will I have to repay the credit just as the 2008 credits are repaid?
No. Congress anticipated this confusion and has made specific provision so that there would be no repayment of 2009 credits that are claimed on 2008 returns.

22. I made an eligible purchase of a principal residence in May 2008 and claimed the $7500 credit on my 2008 tax return. My brother, who has never owned a home, wishes to purchase a partial interest in the home this spring and move in. Will he qualify for the $8000 credit, as well?
No. Any purchase of a principal residence (or interest in a principal residence) from a related party such as a sibling, parent, grandparent, aunt or uncle is ineligible for the tax credit. Since you and your brother are related in this way, he cannot qualify for the credit on any portion of the home that he purchases from you, even if he is a first-time homebuyer.

23. I live in the District of Columbia. If I qualify as a first-time homebuyer, can I use both the $5000 DC credit and the $8000 credit?
No; double dipping is not allowed. You would be eligible for only the $8000 credit. This will be an advantage because of the higher credit amount, plus the eligibility requirements for the $8000 credit are somewhat more easily satisfied than the DC credit.

24. I know there is no repayment requirement for the $8000 credit. Will I ever have to repay any of the credit back to the government?
One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. (See below, #24). Note that this same 3-year recapture rule applies, as well, to the $7500 credit available for 2008. This provision is designed as an anti-flipping rule.

25. What if I die or get divorced or my property is ruined in a natural disaster within the 3 years?
The repayment rules are eased for many circumstances. If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or subject to condemnation by eminent domain by an authorized agency) within the first three years.

26. I have a home under construction. Am I eligible for the credit?
Yes, so long as you actually occupy the home before December 1, 2009. WITHHOLDING EXAMPLES: Note: The impact of estimated tax payments would be the same. Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit. Result: Sally’s withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000. Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit. Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 – $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200) Situation 3: Cesar and LuzMaria both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 – $5000). They also qualify for the $8000 first-time homebuyer tax credit. Result: Cesar and LuzMaria have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 – $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.

 

Top 10 tips to be a successful sellers

This is an article I found in Broker/Agent News recently.  I thought it was particularly useful information.

Top Ten Tips to be a Successful Seller

Published on Tuesday, February 3, 2009, 2:39 PM Last Update: 11 day(s) ago by Paul Pastore

Tags:

1.  Be committed to selling.  In a buyer’s market with inflated inventories, short sales, and repos, there is no place for sellers who want to ‘test the waters’.  Don’t even think “If I get my price”.  You won’t.  Money is only a secondary motivator to the serious seller.

2.  Make sure the price is right. Try triangulation.  Ask a few agents for their opinion.  Glance at http://www.zillow.com Consider a formal appraisal.  Focus on both current competition and current comps.  Sellers should realize they seldom see their property objectively or know the other properties the buyers have seen.

3.  Staging is a necessity. Clutter eats equity.  Hire a professional stager or listen very carefully to your agent’s suggestions.  View a staging DVD. Buyers ‘horriblize’ defects.  A faded front door suggests deferred maintenance.  A stucco crack may infer expansive soil.

4.  Consider a keysafe. The new lock boxes are electronic and enable the listing agent to see who is showing the property.  Homes with easy access get more showings.

5.  Install a for sale sign. If you don’t want the neighbors to know you are selling, reread #1 above.  The people in your area will know with or without the sign your property is for sale.  They might even have a friend or relative who wants to be their new neighbor.

6.  Absorb all feedback. If one buyer says something, others are thinking the same thing.  If several similar comments are made, do something about the problem.  Put your ego in storage with the excess furniture.

7.  Flexibility is fundamental. No showings usually means the price istoo high.  No offers usually means the price is too high.  Be proactive especially if the market is flat or declining.  Regularly reduce the price until an acceptable offer is received.

8.  Accentuate the positives. Selling, buying, and moving are stressful events.  Tell your agent you appreciate their efforts.  Ask them how you can help get the house sold.  Ask them what they would do if you were their relative, or it was their home.  Ask this question frequently.

9.  Time is of the essence. This means sooner is better than later.  Do not underestimate the first buyer.  They may be the best buyer.  They may be the only buyer for a long time.  A lower asking price may net a seller more money in the long run.

10.  Patience is a virtue. Ask your agent what the average days on the market is in your area.  The only way to get somewhere faster is to step on the gas if you are in a car.  Or, reduce the price if selling a house.

 

Press Release from the Corpus Christi Association of Realtors

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Corpus Christi Association of REALTORS

Press Conference 2009

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Even though the economic news, and particularly the real estate market news across the country, is less than optimal, the word in Corpus Christi is that our home values are holding, and if you are a buyer 2009 is the year for you.

“There is no doubt that real estate has taken a hit nationwide. But in Corpus Christi,” explains Carole Edwards, 2009 chairman of the Corpus Christi Association of REALTORS®, ” we are faring well in relationship to the rest of the country. One of the major reasons we are doing better here is that we did not have inflated prices. Our market increased steadily over time, rather than suddenly skyrocketing exponentially. The second reason is we had very few sub-prime loans here.” “But what is important to note, is that there has been a shift in our market. Even though values have remained strong, in fact the average sales price increased from $161,216 in 2007 to $162,594 in 2008 and the median price increased from 136,500 to 138,900, according to the Coastal Bend Multiple Listing Service (MLS) statistics, our market has become a buyer’s market.” A buyer’s market is defined as one in which there is a high inventory – one with an inventory between 9-12 months. Currently MLS statistics reflect that we have 3,949 properties on the market. That is a 9.2-month supply. For the same period in 2007, there were 3,041 listings reported through MLS, 7.6 month supply. “We are also looking at 50-year low interest rates,” and explains Edwards, “if you are a qualified buyer not only do you have a large number of homes from which to choose, but with 4 to 5 percent interest rates on 30-year fixed mortgages, you can buy much more house for your money. It is definitely the time to buy. And the good news is if you are a seller, the average sales price remains strong, so you can continue to get your equity out of your home when you decide to sell. But since we do have more properties for sale, and it is a buyer’s market you also might want to do more to prepare your home for sale so you can compete with the other properties on the market in Corpus Christi.” To give you some idea on how Corpus Christi compares to the state and the nation, according to the Texas A & M Real Estate Research Center average sales prices in Texas are static across the state, but in Arizona the average sales price dropped $115,000. Median sales prices were the same in Texas for 2007 and 2008. But they are down as much as 41 percent in California from 2007 to 2008. As for the number of homes sold in 2008, compared to 2007, according to the Coastal Bend MLS we are down 19 percent. In specific numbers that translates to 4,844 homes sold in 2007 compared to 3,949 in 2008. Total dollar volume has decreased 18 percent. In 2007 total dollar volume was $780 million compared to $642 million in 2008. “There is no question, our sales are down here. It would be impossible for us not to be affected by what is going on across the nation. But looking at 2009,” Edwards says, “we are cautiously optimistic. No one could predict that we would be where we are today. But we think we will come out on the better side of this in Corpus Christi. The positives for our real estate market in 2009 include the following: · Housing remains strong, but affordable in Corpus Christi · It’s a great time to buy – We are in a buyer’s Market · Interest rates are the lowest they have been in 50 years · Values remain strong · We had very few sub-prime loans in the Coastal Bend · We have not been in an inflated real estate housing market · Developers and Investors continue to look at our market as very affordable

Downloads…

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2008 Charts and Graphs – PDF

phone: (361) 991-8221

email: debra@ccaronline.com

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Avoid Online Real Estate Buying Blunders

This is a great article I found on MSN.com about common mistakes people make when shopping online for real estate. This is nothing we haven’t told our clients but it shows that buyers ARE still using the internet to shop, more than ever in fact! It’s an incredible tool for both buyers and sellers and us Realtors too! Check it out:

5 top blunders of Internet home buying

Here’s some advice to help you avoid the common pitfalls of online real-estate searching.

By U.S. News & World Report

 

More on USNews.com

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While the painful real-estate swoon appears likely to extend well into 2009 — at least — the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing.

According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87% of homebuyers used the Internet to search for homes last year. That’s up steadily from 84% in 2007 and 80% in 2006.

But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real-estate searching more effective, here’s a look at the top five Internet home-buying blunders and what you can do to avoid them.

1. Assuming you can do it all yourself
The Internet allows users to handle for themselves many of the tasks that could once only be performed by real-estate agents. The NAR profile, for example, found that the number of homebuyers who first learned of their homes on the Internet has been rising in recent years, to 32% in 2008, up from a tiny 2% in 1997. Accordingly, the number of homebuyers who first learned of their homes through agents has been declining, to 34% in 2008, down from 50% in 1997.

But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house — unless you are an experienced real-estate investor. Purchasing real estate can be extremely complicated from a legal standpoint, and it’s easy to make a mistake if you don’t have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars.

“Doing all the paperwork yourself is a huge mistake,” says Joshua Dorkin, chief executive officer of BiggerPockets.com, a real-estate networking and information site. “There are so many things you can miss on a contract.”

What’s your home worth?

2. Looking too narrowly
The sheer amount of information about the real-estate market online can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real-estate search engines, such as Realtor.com, for their research. The problem with doing that, however, is that you’re missing out on the biggest advantages that the Internet offers. [Realtor.com is a partner of MSN Real Estate.]

First, you’re closing yourself off to a smaller cross section of the homes that are out there. “A lot of the sites aren’t comprehensive and don’t have all of the new listings,” says Pat Kitano, a co-founder of Domus Consulting Group, which works with real-estate brokerage firms on technology marketing strategies.

Don’t assume that because a house is on one real-estate Web site, it is on all of them, says Greg Healy, vice president of operations at ForSaleByOwner.com. “It’s still very fragmented,” he says. Healy recommends using several Web sites to get a more complete picture.

Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer. Blogs have become a popular resource for real-estate agents and others to post information as it happens. “If consumers are interested in a local area, they should find local real-estate bloggers who know this breaking information,” Kitano says.

3. Ignoring the independents
One area that major real-estate search engines often overlook is the market for homes sold by the owners. “A lot of people forget to think how many homes are sold without agents,” Healy says. The current estimate is that 20% to 25% of homes are listed by owner, he says.

Your dream house could easily fall into that 20% to 25%. So how do you bring homes sold independently into your online searches? “Craigslist is one of the best resources,” Dorkin says.

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4. Falling for fake listings
Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for.

“If there are no photos [of the house], that’s a big warning sign. That’s just people trying to collect page views,” Healy says.

But even if the listing has photos, it’s not guaranteed to be legitimate. Legitimate Web sites will put watermarks on their home photos to brand those photos as their own. If a home’s photos have several different watermarks on it, then you can guess you are looking at the work of a scammer.

5. Putting too much stock in home-valuation Web sites
Sites such as Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers’ fingertips. But they’re not infallible.

Don’t assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home’s value that home-valuation sites cannot incorporate.

“Take their values with a grain of salt,” Dorkin says. He recommends using this information merely as a range. Conduct other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location — those are some of the factors that can raise or lower the value of a home.

By Matthew Bandyk, U.S. News & World Report

 

Real Estate Investing – Revisited

I know I’ve said this over and over, but it bears saying again:  The first axiom of investing is “Buy Low, Sell High.”  Simple enough, isn’t it?  We’ve heard this repeated our entire lives, yet the average investor won’t abide by this.  Let me give you an example.

 

Early on in our careers, Lisa and I started working in a Subdivision about 8 miles north of Rockport, Texas.  Holiday Beach is a deed restricted, waterfront community that was developed in the 1960’s back when there was practically no civilization in the area.  A couple of years ago, Holiday Beach looked like the land that time forgot.

 

When Lisa and I started working there, quite by accident, we were selling interior (non-waterfront) 50×100 lots for $4,500 – $5,000 each.  Little by little we started working the area harder.  After a while we had a huge inventory of listings.  Within about 2 years the price per lot had made it all the way to about $9,000 each.  I even saw a few go for $12,000 each. 

 

The oddest thing was, the higher the price got, the more people wanted to buy.  There was a time when we would drive out there in the evening to plant our signs on our new listings and in the morning we would have offers on them.  Lisa and I were contacting everyone trying to get them to list their lots with us.

 

I can’t pinpoint the exact top of the market, but like everywhere else, the market crashed in Holiday Beach.  Once it was obvious that the market was in decline, people that had bought their lots as an investment flooded the market, trying to dump their lots.

 

Today the market is just dismal.  There have been a total of 15 (lot) sales in Holiday Beach within the past 12 months.  That averages out to 1.25 sales per month.  There are (as of this morning) 57 lots listed in Holiday Beach.  In other words, there is a 3.8 year supply of listings.

 

At our high-water mark, lots were selling for $9.000 each.  Today the median price for a lot is $7,300 with an average of 187 days on the market.  That’s almost a 20% decline in market value.  Despite the decline, the market is flooded.

 

Now, let’s get back to the original idea; Buy low, Sell high.  Unless you really like to buy and hold land, I wouldn’t recommend Holiday Beach right now.  There are some great investments though.

 

My favorite investment is Multi Family Housing.  I really like the idea of apartments.  Each month you receive an income from your property and at some point in the future you’ll have the opportunity to sell at an appreciated value. 

 

The reason I have always preferred Multi Family is because you will at some point or another have vacancies.  In Multi Family you’re income is reduced when you have a vacancy.  If you rent a single family home out and have a vacancy, your income stops.

 

That being said, I have changed my mind a little about single family residential lately.  There are some great bargains out there.  Even here in South Texas we are seeing more foreclosures than normal.  Some of these homes are being sold dirt cheap. 

 

Here’s what I would do…  I’d buy a foreclosure or two.  It’s going to need some renovating (they always do).  Make very minimal renovations; just enough to make it habitable.  Then rent it out.  For a couple of years you should receive an income that will at least pay your expenses.  Once the market has recovered, make the real renovations so you can sell the home at the new (appreciated) price.

 

I’ve developed a contrarian attitude towards investments over the past few years.  I’ll admit it’s not for the faint of heart.  If you stop and take the emotion out of the purchase it all makes a lot of sense though, doesn’t it?

 

Here’s my shameless plug…  If you’re interested in learning a little more about this, drop me an e-mail (paul@calltheklemms.com) or go to my website http://www.calltheklemms.com