I had a meeting last night with a great family who want to move to a bigger home. We first began speaking in May and I had walked through, giving them ideas on how to neutralize their home to make it more saleable.
Fast forward to last night, when we had originally planned to put it on the market, and it is not complete. They are so close, yet so far. it is looking SO good as they are SO close, but there are still things that need to be done before it can be put on the market.
So, what's the issue?
Well, they are in a VERY affordable neighborhood in Baltimore County, and homes in their particular subdivision don't sell too very often. It is definitely an area where a first time homebuyer would consider buying.
These sellers hadn't been thinking about the $8000 First Time Homebuyer Tax Credit, because they are not eligible. What they had forgotten is that a buyer for their house very well may be. We are finding in our marketplace that to be safe, buyers need 45 days to close, especially if an FHA loan. If sooner, great, and yes, it CAN be done. But you have to be prepared for possible issues.
The deadline for the tax credit is currently November 30. With Thanksgiving falling on the 26th, this cuts out the 26-29th essentially. Considering how many people are going to want to try to settle to receive this tax benefit, imagine how many closing are going to be scheduled for the 24th & 25th. And what if even ONE in a line of settlements has issues? How much could that effect YOUR closing?
So to be safe, buyers will want to schedule closings for Nov. 20th or sooner. Back out 45 days, and that is October 5. Which means a buyer needs to find a house and get a contract ratified in the next 27 days. If you, as a seller, aren't putting your house on until the week of September 28, you are hoping and praying that your best buyer hasn't already put a contract on something else and that they will write on your house in less than 8 days on the market.
That's a big risk!
Might the government extend the credit? Maybe. But are we going to bet on that?
I have another family in a similar position, and realize that they too haven't considered the implication of the tax credit on the SALE of THEIR current home. We have been focusing so much on reminding first time homebuyers to get moving, that we have not necessarily reminded our SELLERS that they need to get moving too.