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8000 Reasons Get Your Butt In Gear: Deadline for First Time Homebuyer Tax Credit Looms

First time home buyers: Are you still at the computer, doing endless "research" on how to snag the $8000 TAX CREDIT for buying a house this year?

Does the November 30th deadline seem like a million years away as you think about fireworks (not turkey leftovers)?

First time home buyers: Get your butts in gear. NOW.

This is the wrong time to claim you only get motivated when a deadline looms.

This is the wrong time to tell everyone you are a "last minute kinda person" who pulls an all nighter when you have a term paper, and shops for Christmas presents on December 24th.

Here's why: Buying a house takes longer than you think. There are 8000 reasons you DO NOT want to miss this deadline.

Let's back things up. Do you think OTHER first time home buyers might wait until the last minute? Lenders could very likely experience an overwhelming amount of applications this fall.

With applications already taking 45 days, it could easily take 60 days to close your loan. Or more. Lenders are already ridicuously understaffed.

This means you will need to be in contract no later than the end of September.

If you have not already done so, you will need to accomplish this during the months of July, August and September:

Find a Mortgage person
Find a Real Estate Agent
Find a House
Make an Offer, negotiate terms. Find another house if first offer is rejected. Get new offer accepted.
Get financing completed and loan closed.

Some likely time lines and what to expect:

1. Apply for a mortgage. Provide the required documents and ask for a pre-approval. This will uncover any glitches standing in the way of your approval. This will make certain you have the right amount of funds in your account, or lined up as a gift. This will let you know your price range before you begin shopping for a house. This will let the Realtor know you have done your homework and are serious. ESTIMATED TIME REQUIRED: 1-2 weeks

2. Figure out where you want to live and find a Realtor. Look for a Realtor that knows the neighborhood where you would like to buy. Communicate openly and be on the same page if you are buying with another person. ESTIMATED TIME REQUIRED: 2-3 weeks

3. Shop for a house with your Realtor. ESTIMATED TIME LINE: 3-4 weeks.

4. Make an offer, negotiate terms, get in contract. Ask your Realtor about timing before making an offer on a short sale or a lender owned property. ESTIMATED TIME LINE: 1-2 weeks or more...depending on how many offers it will take to get a house. Market could become highly competitive as the deadline looms.

5. Secure financing with lender, and close the loan. Inspections and appraisal will occur during the time as well. ESTIMATED TIME LINE: 6 weeks to 8 weeks

Worst case estimated time line: 19 weeks.

Weeks until November 30th? 22 weeks, beginning next week.

Can you do this in less time? Yes you can.

Just like when you gave your Mom that lame ceramic unicorn for Christmas (purchased in a panic on Christmas Eve, thrown in an obviously used gift bag, then sneakily placed under the Christmas tree minutes before gift opening).

Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area

Posted by Janet Guilbault California Mortgage Banker/Broker on 06/25/2009 12:46 PM

Comments (46)

First Time Home Buyers Opportunity in the Mortgage / Finance Channel

first time buyer, first time homebuyer tax credit, buyer incentives, buyers, qualifying for a mortgage

Originally posted at: Buying Real Estate in California? Everything You Need to Know to GET APPROVED NOW: 8000 Reasons Get Your Butt In Gear: Deadline for First Time Homebuyer Tax Credit Looms

Post is included in group: True Mortgage Professionals
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46 Comments on 8000 Reasons Get Your Butt In Gear: Deadline for First Time Homebuyer Tax Credit Looms

JUN

It is a great opportunity for those first time buyers who are cash poor! It hasn't brought a lot of those folks out of the woodwork in my area though. Maybe it is because they really don't understand how it can work for them. Good reblog.

How right you are the deadline is fast approaching for the First Time Home Buyer.

Yep time is a tickin'.....good reminder.

Agents should email this to their data base of First Time Home buyers. I'll reblog in a day or two.

Tick! Tick! Tick! The time is now! I'll be reblogging! Excellent post that 1st time buyers can easily understand. Hopefully they ' get it'!

Why should first time buyers be in a rush to buy when real estate prices are expected to drop another 10-20%?

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_YnClfaKdqs

I save $8000 today, but lose $20,000 if a $200,000 drops by 10% in the next few years. That's a $12,000 loss.

Excellent advice, Janet. I've been telling first-time buyers that we've only got 90 days left to find a home. It's important that they understand the complete timeline, and that as each day passes their options decrease.

I should add that if someone is planning to stay in the home for the long run (10-15 years), then yes, it might make sense to take advantage of low rates plus the tax credit. But it is important to make sure clients know there are big downsides to buying a home in this market if you need to move in the next few years.

Great Post Janet. Time does seem to slip by quickly. We need to get these 1st time buyers moving NOW!.

I hope you'll remember me if you learn of anyone moving to "The OC" and I will do the same!

Best regards.

Michael Caruso, Broker ABR ABRM CRB CRS GREEN GRI

2007 President, Orange County Association of Realtors

great post! it's getting close to the deadline. hurry hurry hurry...i think the same thing..i think we are going to be rolling our sleeves up and diving in when it comes close to the deadline. i hope gas prices dont go up ;-)

Definately something to consider...not the only thing! It's still important to find the right home, and with the talk of $15,000 credit next year? I'm not sure everyone is going to move.

This is an AWESOME post and I'm going to be sending out a version of it to my "on the fence" people ASAP! Thanks so much for the insight and motivation.

John P.: The $8000 is a sure thing but prices going down is not.

And let's say prices did drop. What if interest rates go higher? That could pretty much wash out the benefit of the lower price.

I am sorry I don't have time to read the link right this minute but will come back and do so.

I feel you do make a valid point, and always like to know opposing opinions.

Nick: I was on a radio show last weekend. The whole topic was how some people will miss the boat because they will think they can make it happen on Oct. 15. Not likely.

Karen: I will agree that they could renew this tax credit or up this tax credit (see my previous post)

There is a risk they may not.

There are other risks as well.

But what about the risk that you lose $8000 big bucks because you waited too long.

Dana: I think it is going to be very interesting to see if this tax incentive is successful in terms of "bringing them out of the woodwork"

So far, I don't see a mad rush. Are there procrastinators? I think maybe so.

I used to rent out a beach house that I owned. No matter what incentive I threw out there, everyone waited until May to book.

Many of them called after the house was completely booked and were mad.

At themselves.

Just in case, I am not planning a fall vacation this year.

Thanks for this excellent post and a reminder to buyers. I am going to repost.

Great Post Janet! Its true buyers should get off their butts now and take advantage of the $8000 tax credit... All the stars are lined up for buyers today! prices are lower, rates are lower and the tax credit tops it all!!!!!

Same timelines I talked about a couple of weeks ago here and email to all new buyer inquirers. Great job Janet. If buyers wait until October they are going to be very unhappy.

I'm hoping they pass the talked about $15,000 tax credit for ANY buyer !!!

Thanks for the timeline. In my geographic area, we are still able to close in 30 days, but it's true that the Lenders will likely be bogged down due to all the Buyers who do wait -- and we should plan for that. I will definitely re-blog this one!

I hope you don't mind the cross-blog, but NAR released a quick quiz on the tax credit program that I found very interesting.

http://tinyurl.com/c3pjgg

Janet - well thought out and prepared post! I put up a post on the same topic a few weeks ago but I'm going to reblog yours because it is so well done!

Brian.

Janet,

Excellent post! I'm going to share this with the other Agents in my office! So they can put the word out!

Phil, I never mind when my blog gets cross pollinized by a link from my readers. Thank you.

But I must warn you. I have a half yellow squash and half green zucchini growing on the yellow squash vine. Moral? Intersting things happen when you cross pollinate!

Michael: I am all for everyone getting the credit. That is because the tax credit to first time buyers is sort of upside down.

The people who need help and can spend the bucks to revive the economy are not first time buyers.

Also: first time buyers in San Francisco must make more money than the limit to afford the house.

Those people would buy if they lifted the income restriction.

I made a presentation that has been downloaded from Realtors. It's free, you can add your information on it and it's easily face booked (making it viral).

here's the link..... http://www.slideshare.net/Autzi/presentation-8000-tax-credit-rachel-stroud

I get over 20 views per day on mine and have it linked on my e-mails.

Sounds GREAT, Janet. Now, cross some garlic, EVOO and al dente penne pasta into that squa-quini and we'll be dinin' in style! :)

Phil: LOL I will need to send you a picture of this squanini before I eat it tonight.

Mario: Fabulous, thank you so much. 20 views a day. Whoa. Impressive. I will check it out when the mortgage madness has died down.

Keith: All my best to the agents in your office...I hope you have a great summer with plenty of buyers.

Janet -- Excellent post. Nice work on the timeline. I have been on my 'fence sitters' about this for the past month. Before we know it, it will be September and they may be out of luck in trying to find a house and close on time. Heard the deadline MAY be extended to mid 2010, but I think that may go with the proposal of extending the credit to all buyers and increasing to $15K. Let's hope Congress does the right thing and approves it .

Janet - Those are 8,000 darn good reasons for sure ! It is probably the best time to be a home purchaser in their lifetime !

Janet, YOu stink at bloggin! You take up all the great post positions that other people deserve!!!!

JUST KIDDING!! Do you believe everything you read Janet?? Is there a Janet G index??

How about the BELL curve?? Who's that named after?? And wasnt that to help people who were bad in school anyway??

I am going to come up with my own index...Ill have it done by tomorrow!!!

NICE JOB...! This was post worthy!!! :) errr...FEATURE WORTHY!! I liked it alot! Wasnt the same old ...blah blah blah..and no, there wasnt any fluff!! LOL

D

Hi Janet~ I am working on getting my daughter to do this. I have actually referred her to a Realtor and a loan office in the Rain. Hopefully she will find a house that works for her soon.....Is it true that they have to keep the home they buy as their principal residence for at tleast 3 years or else they will have to pay the money back??

Hi Janet -- Sage advice as always. Putting the timelines in there really clarifies things.

JUN

Great article. I would call "For Dummies..."

I have heard of a few first time home buyers choosing to wait until the last minute to see if the tax credit increases. But with tighter underwriting guidelines in place, why risk it and miss out on the 8,000?

Which is probably why I'll be taking some current renters out in the 103 degree heat promised for tomorrow. Formerly out of staters, they realize it's now or never to get into the California market. But I promise you, I'm not complaining!

Very well written article and timely!

Great blog. Since we share the same real estate market, it is also important for buyers to know that the inventory of homes for sale is the lowest it has been in 18 months. Your 3-4 week timeline to find a home and have the offer accepted could be VERY optimistic.

Excellent advice, especially when a short sale home is considered. I have re-blogged and thank you.

I don't care how many times or how many places a good subject is posted or blogged. I might not have seen it before and even if I have it's good to be refreshed and reminded.

Thanks Janet!

Wonderful post. Not to mention the California First Time Homebuyer tax credit on new homes is almost all given out. Now is not the time to sit on the fence. Interest rates are still low even if they are not 'the lowest'. There are great homes out there for first time home buyers, just focus on long term needs and goals and visualize what you can do with that house!

This is the best blog that I have read on this topic. We all need to be sending this message!

I expect a frenzy in September when these guys start to panic and the inventory starts to get low. It's going to be a lot of fun.

JUN

Great post Janet. Most first time buyers have no idea how involved and lengthy the process can be, especially in this particular market. Thanks for spreading the word and hopefully motivating some folks.

Wendy: Thank you for sharing that our inventory levels have dropped here. So many young people figured they would never own a home here. It honestly could be a once in a lifetime chance. Sounds corny, but here we are at the intersection of low prices, low rates, and a big fat tax break.

Sure you can wait and hope for something better.

Karen: We are thinking alike! See my comment to Wendy. Now or never...opportunity is here.

JUL

Great reminder Janet. Don't forget that there may be a logjam of buyers at the end of the year. All trying to get that last minute sale in.

AUG

Hello everyone. Anxiety is the dizziness of freedom. I am from Sri and know bad English, give true I wrote the following sentence: "Spend time searching for the perfect clock gifts at skymall." THX 8-), Taft.

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