There are dozens of articles on this site about the Home Buyer Tax Credit. You can see them all here.
For the most recent news about the Home Buyer Tax credit, please see this article (July 2, 2010).
“But Jay, the credit is good through November 30, 2009. That’s 3 whole months!”, you may be thinking.
Not so fast Sparky. To take the tax credit you have to close on a home by November 30. Close as in transfer of ownership has to be complete, recorded with the appropriate legal entity. Closed as in you have the keys to the new home in one hand, and are carrying house-warming party invites in the other.
Typical time from offer acceptance to close is about 30 days. I’ve seen cash deals close in 4 or 5 days (how many first time buyers can write a check for a home?) and I’ve seen traditional financing transactions close in as little as 12 days. But that was “back in the day” and lending guidelines are vastly different now.
You need to allow yourself plenty of time to close on a home sale. Things can go wrong swiftly once an offer is accepted:
- There can be problems uncovered during the inspection period.
- The appraisal can come in low.
- Your loan underwriting can get delayed for a myriad of reasons.
- Loan funding can be delayed.
- There could be a cloud on the title that has to be cleared.
A good agent tries to foresee all the potential pitfalls and nip them in the bud, but things can arise that are beyond anyone’s control.
The more time you can allow, the better.
We recommend being under contract by October 15 just to be safe.
At the time of this writing, there are no less that five bills in the House and Senate to extend (and even expand) the tax credit. All have been stuck in Committee for weeks. So if you really want to roll the dice and live on the edge, you can hope the tax credit gets extended, or scramble like mad with a sub-30 day close.
Just be prepared to hit the Jack Daniels heavily if you guess wrong and close on Dec 1, leaving a refundable $8,000 tax credit on the table”¦
Here’s a clip of a CBS5 News segment that features one of our first-time homebuyer clients, Katie Fulkerson, with a cameo appearance by yours truly. They cut one of the most important things Katie said ”while the tax credit is great, it shouldn’t be the primary reason for buying a home. Don’t buy something that’s not what you want just to score an extra $8K”
Photo Credit: Robbert van der Steeg on Flickr. Creative Commons License