The tax credit deadline has been extended from June 30th, 2010 to September 30th, 2010. Details here.
Over the first few months of this year a lot of people who might not otherwise have been looking for new homes decided to move their timetable up, and purchase the home of their dreams because of the first time homebuyer tax credit. Why not move things up a bit if you can get $8000 cash? When the credit was extended to current homeowners as well, things really started to heat up.
April 30th was the hard and fast deadline to be able to get a signed contract and still qualify for the tax credit. Most people were able to reach that deadline with no problem, however, some are now thinking that they're going to miss the June 30th deadline to complete the sale. If they do, they'll get no credit.
Tax Credit Closing Deadline Extended?
Now there is an amendment to H.R. 4213, “the American Jobs and Closing Tax Loopholes Act of 2010” bill being offered that would offer extra time for homebuyers to close the sale.
The amendment, which is attached to another bill, is being sponsored by Senate Majority Leader Harry Reid, D-Nev., Sen. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn. It was passed by the senate this week, and now needs to be passed by the House.
The bill would simply extend the time available to homebuyers to complete the sale on their new homes from June 30th to September 30th. So will it pass?
Many Sales May Not Complete Without Extension
The National Association of Realtors has been pushing hard for this bill, but many are saying that even with the extension, many of the sales – especially short sales – will still not complete.
Up to 180,000 buyers who were hoping to close by June 30 and get the tax credit are likely to miss the deadline, according to the National Association of Realtors (NAR).
“We are hopeful,” says Paul Bishop, vice president of research with NAR. “We've heard a lot of concern from Realtors out there. There seems to be a sense of fairness. The tax credit was essentially promised” to those buyers.
But some Realtors say even if a three-month extension is granted, that still won't be enough time for buyers pursuing houses through short sales, which can take many months to close.
“How are you going to close a short sale in two months?” says Edward Goldfarb, a Realtor with Keller Williams in Fort Lauderdale. “Hundreds of people are not going to close and are going to lose their tax credit. September is not any better. A short sale can take a year and a half.”
So a lot of people out there are in a holding pattern, hoping to get their credit. Some of them may get it because of the extension, but it sounds like a lot of folks who are buying short sales still may end up being left out in the cold.
Another concern is that buyers who face losing the tax credit could pull out of pending deals altogether. Any extension must be passed this week, or buyers will start canceling deals next week, before the deadline hits, says Richard Smith, president and CEO of Realogy, parent company of Century 21, ERA, Coldwell Banker and Sotheby's International Realty.
“We're concerned, as many people are, that this will force people to cancel their contracts,” Smith says.
So now it is up to the House to get this bill passed so that some homebuyers can be helped. The question remains – how many will it help?
What do you think – should the deadline be extended past the June 30th deadline? Will it be enough time for most unclosed sales, or will it be a pointless exercise? Tell me your thoughts in the comments!
Yes it should be extended, why should people have to lose out because of all the legalities.
R Wells says
Yes it should be extened. We are building a home and are going to miss the deadline because of builder blunders and windows that took for ever to come in. That is a pretty steep penalty when we started this whole thing thinking we would beat the deadline with a least a month to spare. Of course it doesn’t benefit anyone but the homeowner and we can’t sue the builder for missing the deadline so why should they care?
Jeff C says
Yes, it should be extended. There is such a bottleneck of sales going through the system that it is almost impossible for many who were under contract by April 30 to close by June 30.
Absolutely. People should not lose out because the problems not within their control. Especially for short sales, one year is good, but the best deal would be until end of 2011.
A resounding YES!!
We were supposed to close on the 29th. Don’t see that happening just because the banks are choked up. The buyer and the seller are not the ones defaulting. There-fore why punish the average American?
Especially when housing sales fell so sharply after 4/30/2010.
Matthew Regalia says
Yes Please extend they keep pushing my closing back and now we are closing on the 2nd and ive lost out on 8 thousand due to the lack of drive from the selling agent. that eight thousand was my safty net and now im thinking of pulling out of the purchese because of this. extending this credit to september would save my first home purchase. does any one think it will happen? please email me your thoughts i need some insight and some hope.
I BOUGHT A SHORT SALE MARCH OF 2010 WITH HOPES OF CLOSING BY JUNE 30TH. I WAS REALLY DEPENDING ON THIS $8000 REBATE. I WILL PULL OUT IF I DONT MAKE THE JUNE 30TH DEADLINE. I PRAY THAT THE EXTEND THIS . SHORT SALES ARE OUT OF THE BUYERS CONTROL. IF I COULD SPEED THIS UP I WOULD. WHY IN THE WORLD DOES A SHORT SALE TAKE SO DARN LONG. OUT OF CONTROL.
Kathleen Bork says
God I am praying that they extend this as this was the only reason I decided to purchase now because of the first time credit and I M depending on this. I even sold stock at a much lower price so I would have money for the down payment and closing cost. I was suppose to close May 28 but the mortgage broker I have messed up by not knowing that FHA did not approve the adult community where I am purchasing a house so a week before my closing I’m told I have to now put down 10% instead of the 3.5 % I already gave and go conv loan and at a slightly higher interest rate and to top that off the whole process of finding a loan had to start again. I now have the commitment and the bank has everything they asked for so it is just waiting for them to give the go ahead. I have been told that it should go to closing within the next few days if not tomorrow. I thought about walking away from this deal but I would lose out on my deposits and all the other cost I have already paid, home inspection, termite inspection, appraisal and all the application fees. I feel like crying all the time now and I am so tired of everyone asking, “when are you closing, what’s going on?” I am also tired of living out of boxes. I signed my contract for sale in Feb under the condition that I wait until last spring to actually close due-to the owners being in Fl for the winter. This mortgage broker had over 5 months to make sure this would happen in time but he waiting until the last minute and then found out that the place no longer did FHA loans. This is, I truly believe, the fault of this Broker and the company he works for. I was told that this was passed by the house of represntative but now has to be signed by the President and then it goes to the Senate. How and when can I find out what is happening on this??? Thank you