Psst...How to Turn that $6500 into $8000

Last Friday was a big day for what we call "move up" buyers.  Not only was the first-time homebuyer tax credit extended, but now many folks who already own a home are eligible for a $6500 tax credit too!  This is really big news for all you HGTV-watching, Realtor.com-surfing,fence-sitting homeowners out there.  (And I know you are out there!)  The tax credit means it just got a little easier for you to take advantage of low interest rates, nice inventory and make your desired move-up a reality too.

So let's just say you go ahead.  Here's the little secret I offer to make the most of that tax credit:  spend as much as you can of it on energy efficiency features for your new home.  You'll earn another tax credit for 30% of what you spend on materials.  The program caps at $5000.  At that top level you would qualify for another $1500 tax credit, bringing you up to $8000 in credits for your family! 

Why start with energy efficiency instead of new appliances or furniture?

• Energy efficiency saves you money...when done right you can save 10-30% on your gas and electric bills. A new couch won't love you back like that!  You can bank the savings to complete cosmetic upgrades down the road.
• Energy efficiency protects the long-term resale value of your home. When you go to eventually resell this home, buyers will be shopping based on features and utility bills. Why not lock in that value right away?
• Energy efficiency means you will enjoy your new home more with less drafts and hot or cool spots. From that sense, being comfortable might even be better than a shiny new flat-screen TV. 

Please check out my 5x10 Challenge program to learn more about the right way to plan an energy efficiency upgrade.  The "toolkit" page outlines the important steps.  You can sign up for my newsletter on the homepage to get free coaching and resources!

If you want the super-condensed, bare minimum, older home, Chicagoland quick answer here it is:  from your $6500 homebuyer credit be sure to budget about...

• $500 for an energy audit,
• $250 for do-it-yourself winterizing, and
• at least $1500 for attic insulation. 

You'll be amazing at the savings just by getting those immediate and important improvements done first.  Every house is different so that's why the energy auditor is important - he or she will be able to give you customized info on how you can save the most money specific to your new home.  And the tax credit requirements are very specific, so be sure to talk to a tax professional to find out which insulating and winterizing materials are covered.