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Extension of June 30th Tax Credit Deadline Looking Unlikely

by Mark Wellborn

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A Senate bill that included a provision that would’ve extended the June 30th deadline by which buyers who took advantage of the $8K federal tax credit have to complete their home-buying transaction, has been shelved, dashing hopes of an extension.

We recently reported that the Senate had approved a proposal that would’ve extended the closing deadline to September 30th.

The impetus behind the real estate lobby’s push for an extension is that a good number of home buyers who took advantage of the extension bought homes that were either short sales or foreclosures. These transactions often take longer to close than the normal home-buying process, and as a result, many buyers are in danger of not meeting the June 30th deadline.

The National Association of Realtors has stated that approximately 180,000 contracts signed by April 30th are in danger of not closing by June 30th.

This article originally published at https://dc.urbanturf.com/articles/blog/extension_of_june_30th_tax_credit_deadline_looking_unlikely/2210

6 Comments

  1. Gianni Versace said at 4:34 pm on Monday June 28, 2010:

    Good.

  1. Sharyn said at 10:05 am on Tuesday June 29, 2010:

    Good. This is the biggest waste of money. Don’t get me wrong, I would benefit from the extension, and who doesn’t like free money? But this is just a giveaway to people who have already purchased a house, knowing there was a good chance they wouldn’t meet the deadline to collect the $8K. This stimulates nothing. It’s bills like these that give government a bad name.

  1. reagent said at 11:55 am on Tuesday June 29, 2010:

    I wonder how many people will now walk away from the offers they wrote on these Short Sale properties. I know clients with whom I’m working have hung in there waiting for a response from the bank for 6 months thinking it would be worth it if they got the tax credit.  Without it they will most likely get out of this offer and turn their attention toward something else, a “regular” sale, that will be more predictable and settle in a timely way.  My clients will end up pleased but I feel bad for the sellers who will find themselves back at square one with far fewer options (buyers) than when they originally listed.

  1. Lauren said at 3:56 pm on Tuesday June 29, 2010:

    @ reagent: Really? Your clients would walk away from a several hundred thousand dollar purchase if they weren’t able to get a measly $8k? If the sale is that dependent on the credit then it’s probably over-priced - the seller could make up for the tax credit going away by lowering the price by $8k.

  1. reagent said at 10:49 am on Wednesday June 30, 2010:

    @Lauren, not that the sale itself is dependent on the $8,000 but that the buyers have put up with the uncertainty this long because of the credit incentive. They’ve waited 6 months and could very well wait another before hearing back from the banks with approval…or a declination of their offer. They have decided that there are enough properties out there with a more predictable close date to just hang out in limbo, paying for loan rate extensions, living in a higher rate month-to-month lease, not committing to long work trips or vacations because should the bank come back with an approval they would be expected/obligated to move quickly toward settlement. And remember, the seller has *NO* money, they can agree to lower the price to make up the 8k but it wouldn’t amount to anything without the lenders’ (yes, multiple) approval.

  1. Meghan said at 6:36 pm on Thursday July 1, 2010:

    As a buyer on a condo that my husband and I purchased as a result of the 8k tax credit, I can just say what a nightmare this has been!  The condo wasnt even a short sale mind you, and we went into contract in mid april.  We were promised a closing date well before june 30th, and its now july 1st, and we will be officially homeless as of july 3rd because we gave the landlords 30 days notice (the mortgage broker gave the okay to do so since he assured us a closing date well before june 30th!) and begged them for an extra 3 days to get our stuff out. the bank kept giving us dates to close and those dates just kept passing by.  Finally, about a week ago, we were informed that the bank is inundated with thousands and thousands of files that need to be approved and we are just a number.  Not only do we not have a place to live, but the sellers are ready to pull out of the deal since the contract was up as of a couple of weeks ago.  We were given an option of doing a “prepossession” that the lawyers drew up where we can live in the condo before it closes and they would take $10k from our down payment as collateral.  If we dont go to closing by july 14th, the seller keeps the 10k and we are charged an additional $250/day thereafter.  This doesnt give us many options because the bank is not giving us any answers as to how long it will take to review the paperwork.  I am beside myself and constantly in tears, especially about not knowing where we will live until closing.  I was wondering if anyone had any advice for us, because we’re running out of options.  Thank you

Comments are closed.

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