How I Made More Money with My Home Buying Tax Credit

i almost made a huge mistake and did not even know it. I recently listed our house for sale in October of 2009 hoping to snag someone trying to catch the last minute $8000 Home Buying tax credit. Thankfully nobody bought our home despite being in a relatively strong real estate market. I would have been very agitated had I sold my home and bought another before being able to take advantage of the newly expanded home buying tax credit.

Being that I lived in our home for the previous 8 years the recently expanded home buying tax credit afforded me the opportunity to claim a $6500 home buying tax credit. On top of the $6500 dollars I was able to parlay some additional savings on the home I was buying by asking for some closing costs that I previously would not have asked for, nor do I think I would have received. Remember if you are buying a home anytime in the next few months that the person you are buying from is most likely in a position of gaining a tax credit when they purchase a home. If an owner is eager to sell they will be more willing to pay some closing costs, sometimes significantly more.

Another way you can make money with your home buying tax credit is to roll the money you are getting as a tax credit into some valuable home upgrades. We made several improvements to our home and have some more planned in the future. Some of the home upgrades you can make with your home buying tax credit include...

1. New Countertops. My wife and I elected to go with granite countertops throughout our new kitchen knowing that when the day comes for us to sell that granite will be a huge selling feature. Our granite counter tops cost us around $3000 dollars and we have a rather large kitchen. I believe you get more than a 100% return on granite counter tops especially when you live in a neighborhood of homes that all probably have them.

2. New Floors. Our new home had not been recently upgraded. The floors throughout the home were vinyl and carpet. We took the opportunity and applied a little bit of our own elbow grease to lay ceramic tile in the kitchen and new hardwood floors in the living room and entry ways. All told our new floors cost me about $3000.

3. New Lighting Fixtures. Many of the light fixtures in our home were dated with gold or brass hangings. We took about $300 and bought a new chandelier, new fan, and upgraded all of our light bulbs to more energy efficient LED and Compact fluorescent bulbs. We figure the money we save in the future will pay for the fixtures in just a couple of years. Meanwhile we get some pretty nice value on the newly appointed silver fixtures.

4. New Plumbing/Sink Fixtures. With our final $200 dollars we replaced all of our faucets throughout our home. Like our lighting fixtures our plumbing fixtures were dated by about 15 years. We love our new faucets and feel they added some equity into our kitchen and bathrooms.

If you received the $6500 tax credit I would highly advice you put this money into your home, or at the least set it aside for future improvements. If you received the $8000 home buying tax credit I would suggest you look into replacing another high dollar item such as your roof with the additional money you will have. Use your money wisely like I did and you will be counting your home buying tax credit not just this year, but for years to come.