By Eric Czarnik
C & G Staff Writer

House shoppers who thought they missed the deadline for the first-time homebuyer’s tax credit can breathe easier — they are still home free for a few more months.

Although the tax credit was supposed to sunset in November, Washington passed through an extension that month that makes the bonus applicable to home sales until April 30, 2010.

Kimberly Hosner, broker and owner of Re/Max Vision in Huntington Woods, said she believes that the tax credit has had a “huge influence” on sales so far.

“I think that (for) people that were going to buy possibly next year, I think it has definitely speeded up their decision making,” she said. “I’ve definitely seen a big pickup of people who didn’t even know if they would buy.”

Anna Gallo, owner and team leader of Keller Williams in Sterling Heights, said this past October was one of her best in recent years.

“It definitely has spurred the buyers to make a decision because, obviously, the $8,000 is a great number, a great dollar amount being handed to you,” she said.

The extension includes revised and expanded rules on who is eligible based on income brackets. Under the new guidelines, single buyers with a modified adjusted gross income of up to $125,000 or a married couple earning up to $225,000 filing jointly can take full advantage of the tax credit. Previously, those restrictions were $75,000 and $150,000, respectively.

Buyers who exceed the limits by less than $20,000 might be eligible for a reduced credit. The tax credit is worth 10 percent of the home’s price but is capped at $8,000. In other words, a buyer would get $5,000 off a $50,000 house but only $8,000 off a $120,000 one.

The term “first-time homebuyer” applies to people ages 18 or older who are not claimed as dependents. Also, the homebuyer must have not owned a home in the last three years.

Even homebuyers who are not first-time owners can now get a break, as a move-up/repeat homebuyer tax credit was added with the extention.The government is also offering up to $6,500 for current homeowners who have already owned a home for at least five of the past eight years. The income limits for this credit are the same as for the first-time buyer credit, and it does not apply to homes with a price tag of $800,000 or more.

Hosner said the customers who most often claim the first-time homebuyer tax credit are people in their late 20s or early 30s. They tend to buy houses in the range of $50,000-$140,000, she said.

“In our areas, the renters who are in the Ferndale (or) Royal Oak market that aren’t renewing their leases have now bought in the last couple of months,” she explained.

U.S. Rep. Gary Peters, D-Bloomfield Township, is a co-sponsor and supporter of the extension. He said he has also talked to many real estate agents who have praised the tax credit’s effects.

According to Peters, about 55,000 Michigan homebuyers took advantage of the tax credit through Aug. 22. And existing home sales increased 10.1 percent between September and October, he added — a move he attributed to people rushing to take advantage of the deal before they thought it would end.

Peters is optimistic about the tax credit’s continual impact on the economy. “As the real estate market stabilizes, consumers start getting confidence, start spending money as in normal times,” he said.

Although a tax break can be a welcome incentive, Hosner advised new homebuyers to do their homework and arrange careful inspections before making a purchase.

“There are a lot of foreclosed homes that people are buying,” she said. “A lot of them have no utilities. … Make sure there are no additional assessments or open permits.”

Gallo warned that the extension should not lull wannabe buyers into resting on their laurels.

“Even though the tax credit is extended, the moment to get mortgages is now,” Gallo said. “Some of the qualifications keep changing, so (minimum) credit scores kept getting higher.”

For more information on Re/Max Vision in Huntington Woods, call (248) 548-4400. To reach Keller Williams, call (586) 979-4200. To learn more about the tax credit, visit www.federalhousingtaxcredit.com.

You can reach Staff Writer Eric Czarnik at eczarnik@candgnews.com or at (586) 498-1058.