Home Buyer Tax Credit Deadline Looms – It’s Already Close for Short Sales

The Home Buyer Tax Credit that went into place at the end of last year will expire on April 30 in its present form. Homes and condos must be under contract by that date and close by June 30 to be eligible for the credit. See Home Buyers Tax Credit for more details. The tax credit can be up to $8,000.

The important point for buyers looking to take advantage of short sale opportunities is that time is running out. I’ve had many short sales that were not processed by lenders in the time left between now and the April 3oth deadline. For buyers of Daytona foreclosures and properties that are not in distress you will have a little more time, but with inspections and the length of the closing process, it’s wise not to delay too long.

Short Sale Buyers Strategy

Our recommendation for short sale buyers who want to take advantage of the tax credit in their purchase of Daytona Beach Homes is pretty simple – submit offers on multiple properties and schedule the closing well before June 30th.

This recommendation protects you both from losing the tax credit by not being under contract and insuring the closing against “surprises” from lenders and closing agents.

Submitting multiple offers will give you the best chance of taking advantage of the credit and getting a property you want. How many? Well, it’s a tough call, but you have a good chance with five to six. There’s no guarantee that any of them would be approved in time, but with five or six, you will probably be successful. Note that you must have a binding contract where both parties have signed before April 30th. Just making an offer is not enough. Make sure your real estate agent is an expert in short sales to protect yourself further (I’m certified and have closed dozens of short sales.)

Scheduling the closing a couple of weeks before the June 30th deadline will prevent requests for additional information from lenders and closing agents derailing the deal. I’ve had a lot of closings delayed, so please take this precaution to prevent losing the tax credit.

Will The Home Buyers Tax Credit Be Extended?

We don’t know whether the homes buyers tax credit will be extended for a second time. The Obama administration has been declaring that we are on the way to economic recovery. The Federal Reserve will stop buying Mortgage Backed Securities in March. Many are seeing that as a sign the administration is backing off big support for the real estate markets. If the same thinking applies to the tax credit, then it won’t be extended. However, the budget submitted by President Obama does contain additional tax credits for home buyers. Congress could remove it from the budget or it could be less; we don’t know.

There are tremendous opportunities available for buyers in the Daytona real estate market. For more information or to receive a list of properties that meet your criteria, please contact me at 386-566-7503. I’m a certified short sale specialist and have many short sale transactions successfully completed. Put me to work for you.