Home Buyer Tax Credit isn't Gone... Yet...

By
Real Estate Agent with Century 21 Results Realty

Don't drag your feet. 

If you are planning on taking advantage of the Home Buyer Tax Credits (either the $8,000 First Time or $6,500 Existing Home Buyer Tax Credit), time is running short.  The credit expires for buyer not under contract as of Saturday, 30 April, 2010. 

That means that you HAVE to be UNDER CONTRACT... not just have an offer...

I have had a couple of buyers think that they could put in an offer and then negotiate it in May...  No.  There has to be a Binding Agreement on or before 30 April, 2010 (unless you are Active Duty Military... you then have an extra year). 

And then comes the next hurdle...

The sale HAS to close by 30 June, 2010.  In effect, this puts the vast majority of Short Sales out of reach.  The average time for a Short Sale to go from Binding Agreement to Closing is over 4 months.  Generally, Foreclosures should be Ok... IF you can get the bank to respond in the next two weeks.  Some of the banks are slow to respond, and if there are several rounds to the offer before it is finalized, time could run out. 

Don't look for another extension...

Honestly, this has NOT been a good deal for taxpayers.  The incremental increase in sales (sales that would not have happened except because of the tax credit) are less than one in 5.  That means that there are more than $40,000 in tax credits for each sale "created" by the credit.  Political will is waning.  The numbers are waning, too.  The last credit converted more buyers.  Even the National Association of REALTORS doesn't seem to be pushing for a renewal of the credit at this time. 

Maybe the Tax Credit isn't that important for you...

I think there will be some deals for buyers after the expiration of the credit.  For some buyers, especially those that are making significant downpayments, waiting might be a good strategy... but don't expect an immediate impact on prices.  And there is always the 'risk' that prices will remain stable and the opportunity will pass with the expiration of the tax credit. 

The other danger we face from waiting is an increase in interest rates.  There are a few factors that point to significant increases in interest rates over the next few months. 

If you are in the market now...

Give me a call.  Let's see if we can find the right property for you.  You can even jump into my property search below on the left...

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Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey. 

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Topic:
Home Buying
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Georgia Gwinnett County Lilburn
Groups:
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Rainmaker
1,282,430
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Thanks for posting. We learn a lot from Active Rain blogs. Best Regards,

Apr 14, 2010 03:33 AM #1
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Sharon Paxson
Compass - Newport Beach, CA
Newport Beach Real Estate

Lane - I have a fedw first time home buyers who I am trying to find them a home and get under contract before the end of the month.

Apr 14, 2010 04:06 AM #2
Rainer
112,087
Cari Anderson
Danville, CA

Lane: great info. I've had a few buyers who've been able to get the credit and I know it will help them out greatly. But even if a potential buyer doesn't meet the deadline, there are still lots of great deals to be had if they use an experienced agent. Also, rates will see more volatility now that the feds aren't stabilizing the MBS market. But compared to years past when 7% was an "A paper" rate, it's still a very attractive financing landscape. Thanks!

Apr 14, 2010 04:33 AM #3
Rainmaker
2,486,441
Rebecca Gaujot, Realtor®
Vision Quest Realty - Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Lane, not too many racing toward the deadline at this time...

Apr 14, 2010 02:37 PM #4
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

OK, it IS gone now... and let's hope it stays gone and we can have an organic recovery.

Aug 13, 2010 09:12 AM #5
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