Thursday, July 16, 2009

Give Yourself Enough Time to Claim the Tax Credit

The $8,000 income tax credit for first-time home buyers expires on December 1, 2009. If the buyers do not close by November 30, they will not be eligible for the credit.

We are anticipating that underwriting turn times for every lender in the nation will be a bit longer during the weeks leading up to that date because many buyers will probably wait until the last minute to take advantage of the free money. It would be wise to advise your buyers to plan on having a signed contract in hand at least 6 weeks prior to November 30. That should give them enough time to close.

There is much talk about an extension to the tax credit. At the moment, it is just talk. Until a bill is passed by the House and the Senate, and then signed by the President, it is not a law. There is no indication from anyone other than the special interest groups (Realtors, mortgage brokers and bankers, builders, etc.) and the members of Congress they support financially, that an extension is being planned. Please don't counsel your buyers to expect an extension. If it happens, that's great for everyone, but every time the credit is issued by the IRS, that's $8,000 less the Treasury has to spend on other things, and they are running mighty low on cash these days.

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