First Time Home Buyer's Credit - 36 month question (mortgage, sales, price)

[MysteryMT]

I purchased my house in April 2009 and claimed the 8,000 first time home buyer credit. So I hit the 36 month window in April 2012 (7 months). I've recently accepted a new position about 100 miles away from my home.

It doesn't make sense for me to sell my house at this point because the 8,000 dollars over 7 months would more than cover my mortgage. Additionally, I'd rather put the house up on the market towards the end of winter (February) than right now.

Currently my plan was to rent a small apartment where my new job is and just hold my property till the spring. My question is are there any other options? I know I can't rent out the whole house (4 bed/3bath) but could I just lock one bedroom off and use it as storage for my personal items. Are there any loop holes for moving for a job (looking at the site below the answers no).

Ref: First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009 or 2010

A secondary question when I post my home on the market, I'm curious how to time it with the goal of closing in May 2012 just outside of my 36 month window. I realize that price, location and any number of other factors would play into how long my property would stay on the market. My gut feel was to list the home in early February and hope it sits on the market for 60-90 days thru early spring.

I haven't spoken to a realtor yet, just got the job offer this week so still got a lot of planning to do.

[MrRational]

Originally Posted by MysteryMT

I purchased my house in April 2009 and claimed the 8,000 first time home buyer credit. So I hit the 36 month window in April 2012 (7 months).

Largely immaterial to your question
but it does raise the spectre of yet another force impacting the movements of the market.

I've recently accepted a new position about 100 miles away from my home.
I haven't spoken to a realtor yet, just got the job offer this week so still got a lot of planning to do.

The largest issue in the sell now or sell later is how much LESS the house will sell for next year vs RIGHT NOW. For most people committed to living 100 miles away, and apparently preferring to sell in any case, this is usually obvious and elementary.

In your case though the wrinkle of possible penalties may be a bigger hit.
But maybe not. If you're in a position to close promptly and without complication that could be appealing to a family looking for a big new(er) house before the holidays. Such is probably worth looking for.

Currently my plan was to rent a small apartment where my new job is and just hold my property till the spring. My gut feel was to list the home in early February...

and winterize the interior and arrange for a trusted friend or neighbor to maintain the exterior.

A secondary question when I post my home on the market, I'm curious how to time it with the goal of closing in May 2012 just outside of my 36 month window.

Slyly. Cross this bridge if/when you come upon it.
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Find a good listing agent.
Run the numbers rather than speculate.

hth

[manderly6]

Technically I think you are going to be in "violation" by moving out as the house would no longer be your primary residence.

The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase.

That doesn't mean anyone would ever figure it out.

[MysteryMT]

Originally Posted by manderly6

Technically I think you are going to be in "violation" by moving out as the house would no longer be your primary residence.

The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase.

That doesn't mean anyone would ever figure it out.

Oh yeah, I think technically I would be too. I like the wording on the IRS website that defines when a violation occurs.

Q. When does my home stop being my main home?

A. Here are examples of when your home stops being your main home:

• You sell the home.
• You convert the entire home to a rental or business property.
• You converted the home to a vacation or second home.
• You no longer live in the home for the greater number of nights in a year.

I was asking the rental question because I was curious if it was OK if I rented out like 3 of the 4 bedrooms.

Also since they specify greater number of nights in a year, I'm already 9 months into it, so even if I never returned, I'd still have 9 there compared to 3 at an apartment. And then next year, I'd be outside of the 36 month window before the mid-year point so a majority couldn't be established.

Word smithing, but I'm comfortable that as long as I don't sell till after the 36 month window I'll be within the guidelines on the IRS site.

[MrRational]

Originally Posted by MysteryMT

Also since they specify greater number of nights in a year, I'm already 9 months into it, so even if I never returned, I'd still have 9 there compared to 3 at an apartment. And then next year, I'd be outside of the 36 month window before the mid-year point so a majority couldn't be established.

In the event, they would use the year prior... to the date of closing.
Or the year forward.. of the first transaction OF ANY SORT which implies you establishing a new domicile
(eg lease, auto registration, W2's at work, USPS mail forwarding, etc) which they can find.

In the first example... 5/30/2012 -180 days = 11/30/2011
So lay low for two months and you're likely OK.
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I still say try to sell now rather than have the property sit all that time.
Fall is a great time of year to show a house in NC.

[MysteryMT]

I agree, I'm going to speak/interview some local real estate people tomorrow. Get a better idea of recent sales, average time on the market and all the other fun questions that everyone loves to ask in a down market. See what sort of realistic expectations I can set.