A lot of the buyers that were guaranteed the Federal tax credit by being under contract on a house and closing by June 30th are getting very nervous. As the deadline is approaching, many feel they won’t be able to close on their home in time to be eligible for the credit all for circumstances out of their control.
They’re hoping Congress extends the deadline for closing through the end of September, giving them at least 3 more months to maintain their eligibility. This week the Senate approved a 3 month extension, but they’re still waiting on word from the House to have it passed.
What’s taking so long? Those buyers who went under contract on houses that were short sales are waiting for responses from the bank, which can take months and months to hear back. On top of that, once they hear, they need to move forward with the process, which generally includes a home inspection and other contingencies that have to be met.
The National Association of Realtors is saying that up to 180,000 buyers who were hoping to close by June 30 and get the tax credit are likely to miss the deadline. But even 3 months might not be enough time for many buyers, especially those dealing with a short sale. A short sale deal can take months and in some cases, even a year or more. Realtors are worried that if the extension doesn’t get approved or isn’t long enough, buyers will cancel contracts because they were counting on that money to help with a down payment or even to do some repairs or cosmetic updates in the houses they’re buying. Not getting the tax credit will have a negative impact causing a lot of canceled contracts.
If the extension is passed, it is only for those who were already under contract by the previous April 30th deadline. No new buyers are eligible.
Do you know someone who is affected by this? Please leave me a comment below or visit me online .