Tax Credit Deadline Extension - Update

I'm sure you've been hearing in the news that there is movement to extend the $8,000/$6,500 tax credit deadline. Last week, senate passed the vote on this matter however it has been attached to a jobless benefits bill that is still in need of passing. While this is good news for most, it may seem slightly misleading.

 All parts of the tax credit are not being extended, merely the closing date portion. The two important criteria of this tax credit are those of buyers having a purchase contract executed by April 30th, 2010 and that of closing the transaction by June 30, 2010. The portion that is in the middle of debate is that of the closing deadline, where the powers that be are in the process of extending this deadline to September 30th, 2010. A new buyer can not have an executed contract after the original April 30th deadline, close by September 30th and expect to receive an $8,000/$6,500 check in the mail. A buyer must have already had a purchase agreement executed by April 30th, but was struggling to close in time for the June 30th deadline in order to be eligible for this credit.

 This extension was initiated due to the heavy inventory of the properties being sold in these transactions being either bank owned or homes sold as a short sale. Very often, these transactions are delayed due to title issues, short sale approvals and other miscellaneous reasons not caused by the buyer's actions. Congress has clearly taken note that the buyers in these circumstances should not be penalized when they’ve done everything in their power to close the sale in the designated timeframe.

Again, while this is good news to the buyers who fit the criteria of having an executed contract by April 30th, do not be confused and think you can find a home and close by September 30th and receive the tax credit.

I’ll be watching this closely and in turn post at the time that it does come into law. If you have any questions regarding the tax credit or other real estate issues please give me a call and I’d be happy to answer!