You may have seen my previous posts about the extension of the First Time Home Buyer Tax Credit ($8,000) and the creation of the Repeat Home Buyer Tax Credit ($6,500). However, I keep running into people who are unaware of these or don’t understand them, especially the time limits on them. Fact is, if someone plans to buy a home this year, it would behoove them to soon get started on the buying process, and if they’ve got a home to sell, the selling process. The reason is that in order to qualify for the tax credits, a buyer must be under contract by the end of April, 2010 and closed by the end of June, 2010. Having been through this many times with clients, I can tell you that for many buyers, that’s not much time to find the right home, get a contract negotiated, and get the financing completed in time for a closing by June 30.
This is particularly true if the buyer has as their goal getting a home at a super low price because it is bank owned, or is a short sale (lender willing to take less than full mortgage payoff). Agents continue to see these transactions being often much slower than those between normal buyers and sellers. The lenders can take many weeks just to respond to an offer, and then their response may require a buyer’s counter-offer which would then reset the clock for a response.
Of course, that doesn’t matter if you don’t care about ensuring that you get the tax credit. Just remember that these are way better than tax deductions. They are dollar-for-dollar tax credits. If you do your federal income taxes and owe $2,000, then the first time buyer tax credit would pay the $2,000 and the IRS would send you a check for the $6,000 difference. Same deal for the repeat home buyer tax credit. If you don’t owe anything, they’ll just send you whatever refund they owe you plus the amount of the tax credit. That’ll buy a lot of paint and carpet to freshen up that home purchase.
There are lots of questions about how these tax credits work, and you can get many answers by visiting the Coldwell Banker site HERE. So, if you know someone who is interested in buying a home for the first time or selling and buying another larger, or smaller home or one in another location, pass this post along to them and suggest they call me to discuss what we need to do to get started. Even if you are not in the Lake Norman Area, I can refer you to a hand-picked agent who is familiar with your area who will be happy to help you.
The end of April will be here before you know it!
