A young client of ours said to us this week, "I still have two months to get a house and get the $8,000 TAX FREE CASH from Uncle Sam, right?" Wrong!
The $8,000 First-Time Home Buyer* Tax Credit program expires on November 30. The sale has to be closed on or before November 30 to qualify for the credit. Working back from that, it usually takes:
- a week to find a house and negotiate the contract,
- a week to do inspections and negotiate repairs,
- 4 weeks to get all the loan documentation and Title Commitment.
So that's SIX Weeks from start to finish.That means that if the Buyer hasn't decided on a house and gotten it under contract by October 15, Game Over! That's assuming there are no delays due to Thanksgiving. We think that may be a foolish assumption.
Add to that, the last minute rush is going to jam up Lenders and Title Companies, and if they don't meet the deadline, there is no room for error. Lenders are operating under new rules that require them to re-disclose everything in the loan, subject to a three day waiting period, if costs or rates change by as much as 1/8%. The increased last-minute demand may well increase rates.
While we have full confidence in our team of Lenders and Title Companies, and we all work very hard to make sure there are no surprises, we don't want to put our clients at risk. So, if you know someone who has been "thinking about" taking advantage of that program, they need to call us this week. If they don't live in the Greater San Antonio area, we will be glad to refer them to a competent REALTOR® in their market area.
$8,000 TAX FREE is roughly equivalent to receiving a Bonus check for $10,000 from your employer. It's two years worth of normal (historic) appreciation on a $100,000 home. It's a lot of money! Now, we know there are "rumors" that the program will be extended, even improved. We'll be glad if it is, but we can't advise someone to wait and see, because if Congress decides not to extend or modify it, the opportunity is lost.
* "First Time Home Buyer" is defined for this program as anyone who hasn't owned a home in the last three years. There are some Income and Home Price limitations If you're not sure, call. If you have any Real Estate related question, please call us and let us help. We are here to serve you and your friends and family.
Best regards, Ellen and Doc Stephens,REALTORS®