$26 dollars. If you want to know the taxes for a specific property go to: http://www.co.dakota.mn.us/HomeProperty/PropertyTaxes/default.htm That is the county web site and the source of all public tax information.... more
It may be too much, too little or just right. I don't believe Fannie Mae or any other bank owned properties show any consistency in their pricing. And as most users of "rules of thumb" you may end up with broken thumbs. You need a strategic market evaluation to get a real sense of the value. You need to understand the terms that you are accepting the property with, a limited warranty deed no condition warranties and their onerous purchase agreements.... more
I'm a loan advisor and over the course of the past year I have fielded many questions on this topic. For obvious reasons, I would prefer that my clients get a loan rather than signing a Deed for Contract. However, there are some homebuyers that can 'afford' to buy home and are ready to buy a home, but fall short of one or more requirements set forth by Fannie Mae, Freddie Mac, or HUD. For those borrowers, I was more than happy to research this issue.
Zinko is correct and the language he cited from the IRS's website was the first that I heard of this. When I read it in September of 2009, none of the loan officers in my office knew that a Deed for Contract could qualify a buyer for the tax credit. Now, the tax credit implication of a Deed for Contract for first time buyers is a huge topic on-line, and the fact that you can do it is quickly becoming common knowledge. The key, or the real question in my mind, is "How do I file my return if I purchased a home via a Deed for Contract?"
I just researched this last for a former client who was selling his home with a Deed for Contract. He said that he and the buyer had already signed the binding agreement with a rather small down payment (with more to come in 6 months....once the buyer gets their tax credit I presume), but the buyer claimed that the seller was wrong about their ability to claim the $8,000 tax credit. I called my local H&R Block and I was amazed that they were basically told me the same thing: "With us, the only way you can claim the $8,000 tax credit is if you have a HUD-1 settlement statement". Note: This may not be true with every H&R Block, or with every tax preparer, but I did call 2 other local tax preparers that gave me a similar canned response.
The fact is there are several scenarios where an individual can legally and justifiably claim the $8,000 tax credit without having a HUD-1 settlement statement. For all three, you must be a first time homebuyer or a home buyer who has not owned a primary residence in at least three years:
1. Purchased a home via 'Deed for Contract'
(Executed Deed for Contract used in lieu of HUD-1 Settlement Statement)
2. Purchased a mobile home but do not have a settlement statement.
(Executed retail sales contract used in lieu of HUD-1 Settlement Statement)
3. Purchased new construction but the owner does not have a settlement statement.
(Certificate of occupancy used in lieu of HUD-1 Settlement Statement)
Below, is a step-by-step guide to getting your $8,000 if you qualify for the First Time Homebuyer tax credit: (There are definitely some tax preparers, most likely experienced CPAs rather than national chains that would have no qualms with filing a return using one of the aforementioned documents in lieu of a HUD-1 settlement statement. However, if you canâ€™t find one, donâ€™t want to pay for one, or are accustomed to filing your own taxes, here you goâ€¦.)
1. Go to the IRSâ€™s website and search â€˜Free Fileâ€™ in the search box at the top right corner of the page.
2. Scroll down and click one of the three options: â€˜I will Choose a Free File Companyâ€™, â€˜Help me find a free file companyâ€™, or â€˜Choose Free File Fillable Formsâ€™. (*Note: To prevent errors that may delay your return, the IRS recommends using tax software, so it may be best to choose your own company or let the IRS help you find a free file company.)
3. Then, either complete the free fillable forms, or complete the free tax preparation software. (*Note: You must use form 1040 rather than 1040A or 1040EZ, and you cannot file through e-file if youâ€™re claiming the $8,000 tax credit. All returns where the $8,000 tax credit is claimed must be paper filed. You can use e-file, and then file an amended paper return after you receive your standard tax return in 10 days. However, I wouldnâ€™t recommend it because an amended return usually takes 8 â€“ 12 weeks. Right now, the IRS website says that amended returns are taking 12-16 weeks because of the volume created from this tax credit.)
4. Once all of the applicable forms are completed or the software is completely finished you will then print your tax return and sign it.
5. Mail the following to the IRS: Signed IRS Form 1040, IRS Form 5405 for First Time Homebuyers, all wage statements and other applicable tax documents, and one of the following four items: HUD-1, Deed for Contract, Retail Sales Agreement for a Mobile Home, or a Certificate of Occupancy for New Construction. (*See Link)
6. You can use standard mail or you can use priority, express, or other expedited mail services to gain a few days on the waiting period. Iâ€™m not sure how long the wait is, but Iâ€™ve read that it should be around 4 weeks if you file early and do things correctly. For information on where to mail your return please refer to the link below.
I hope this helps anyone that qualifies but has had trouble claiming their $8,000!... more
Closing or registration? If you purchase with a contract for deed, you do not transfer the warranty deed; however it is a valid purchase if recorded and homestead property. Check with your tax adviser. You should do this anyway, since as realtors we are knowledgeable, but not expert in such matters and need to be careful in giving any advice that could be interpretated or misconstrued. If you live in the home for three years, you do not have to repay this credit. If you need directions to some resources, call. Best wishes...Liz Fuller, 612-986-4105... more