President Obama Signed Tax Credit Extension Into Law

This morning, President Obama signed the tax credit extension into law, helping about 180,000 buyers who were unable to settle by June 30, 2010 to hopefully receive their due tax credit.

NAR reported that around 180,000 eligible buyers were unable to settle by the original deadline to no fault of theirs, causing them to lose out if the extension were not to become law.

On June 29, the House voted to extend the settlement deadline, but had a provision about unemployment in the same bill.

The Senate rejected that version, but agreed unanimously to extend the tax credit deadline by itself.

Congratulations to those buyers who had done everything in their power to settle on time yet could not, and will now be able to take advantage of the tax credit for which they were eligible.

Senate Passes Homebuyer Tax Credit Extension

The Senate passed the homebuyer tax credit extension today, allowing those who were under contract by April 30, 2010 to move past the original deadline of today, June 30, 2010 to settle by September 30, 2010.

NASDAQ reported this wonderful news a short time ago.

The House voted in favor of the homebuyer tax credit extension yesterday. The Senate voted unanimously today. President Obama must still sign it into law.

What a wonderful thing for those approximately 180,000 homebuyers who were unable to settle today due to circumstances out of their control.

House Votes to Extend Tax Credit Three Months Now in Senate Hands

In a last effort push, the House voted to extend the tax credit three months and the decision to be put into law is now in Senate hands.

The House voted 409-5 in favor of bill H.R. 5623.

This would be a welcome relief for the estimated 180,000 homebuyers who would lose out on the tax credit due to no fault of their own because they are unable to settle by tomorrow’s deadline.

The Associate Press quotes Representative Sander Levin, chair of the House Ways & Means Committee:

“We owe this to the people who have essentially followed the rules who are caught by a closing date.”

The bill enters the Senate for vote now, hopefully passing in this attempt, separating this issue from the others that caused it to fail in passing prior to now.

The countdown is on with one day until the deadline to close passes.

Up to 180,000 Homebuyers May Lose Tax Credit if Not Extended

Up to 180,000 homebuyers may lose the tax credit if the deadline is not extended past June 30, 2010 — and not by any fault of those buyers.

NAR reports that in Maryland, that number is around 2,630 homebuyers.

This is due to waiting on short sales, foreclosures, or lender delays, none of which these homebuyers have any control over.

According to NAR President Vicki Cox Golder,

“These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a workflow jam with lenders or other delays such as lapses in the National Flood Insurance Program, Rural Housing Service, and new home construction, and might not be able to complete the purchase of their homes by the current deadline,” said Golder. “It would be a tragedy for them not to be able to complete the purchase in time to claim the credit.”

This is bad news for these qualified buyers who have done everything in their power to meet all deadlines for the tax credit that they are eligible to receive.

Tax Credit Not Extended

The tax credit extension bill did not pass in the Senate today. Those qualifying buyers who wish to receive the credit MUST close by next Wednesday, June 30, 2010.

Senate Votes to Extend Tax Credit Deadline for Settlement to September 30, 2010

The Senate voted and passed a proposal tax credit deadline for settlement for those who were under contract by April 30, 2010 from June 30, 2010 to September 30, 2010.

This is GREAT news for buyers who are facing issues with either financing, short sales, or other issues which could have delayed their closings, due to no fault of theirs, and them possibly missing out on their qualifying homebuyer tax credit.

MSNBC reported this breaking news.

Next, it is Congress’s turn to approve the proposal.

Tax Credit Contract Deadline Passed

The tax credit contract deadline passed last night at midnight, so buyers who may have qualified yet were unable to get a legally binding contract in place are no longer able to get the credit, even if they settle by June 30, 2010.

Though I did see an increase in the Baltimore real estate market in the past two weeks, the interesting thing was that most of those I was working with in buying or shopping for a home were NOT eligible for the tax credit.

There also was not as much of a rush to get the credit right at the end. In searching the MLS, there were not a significantly higher amount of homes going under contract than one would expect at the same time any other year.

The tax credit certainly did its’ job of stimulating the real estate market, but I am finding that it is the low interest rates as well as low house prices that has been enticing people to buy homes, whether or not they were able to take advantage of the credit.

While interest rates and house prices remain low, Baltimore home buyers will continue to purchase — and home sellers will continue to sell their current houses to move up to their next home.

Tax Credit Ending Questions and Concerns

Guest blogger, T Jeremy Loomis, Sales Manager for Wells Fargo Home Mortgage, talks of tax credit ending questions and concerns.

Is it time to change how buyers view contract issues with the tax credit ending?

Probably…

We have seen a market recently that one would call a “buyers market”, where the buyer has more control over the purchase of their new home and the seller may have to make more concessions they would in a “seller’s market”. But with the tax credit ending on April 30th, 2010 (remember a qualifying buyer must be in a binding sales contract by 4-30-2010 and settlement on the new home by 6-30-2010) the sellers will gain the upper hand.

So if a buyer is already in a binding sales contract what do they have to worry about? Quite simply, what happens during the process and after April 30th if issues come up with an inspection, the appraisal report, etc…What happens if a buyer has to negotiate repairs, appraisal issues, or the like once Friday’s deadline passes? A buyer who is vying for the tax credit will need to tread lighter after the 30th as a seller could be less likely to negotiate on a certain area and the buyer really has 2 choices at that time — walk away from the contract and the tax credit (remember you may not have that option at all) or work with the seller to come to a reasonable win-win situation to continue with the contract.

Overall, we will see sellers with a better bargaining position then they have had over the past few years. And we must remember that buyers must remain reasonable with all requests when issues arise and think “what if I was on their side”.

The final question a buyer would have to think about: Is the issue at hand worth losing a tax credit up to either $6,500 (for those “move up” buyer) or $8,000 (first time home buyers)?

———

Thank you, Jeremy!

Contact Jeremy and myself for more information on the tax credit deadline!

Homebuyer Tax Credit Expires April 30

The extended homebuyer tax credit deadline expires soon — next Friday, April 30, 2010 to be exact.

So what does this mean? Buyers who qualify and want to take advantage of the homebuyer tax credit need to have a fully executed and agreed contract BY next Friday, and settle by June 30.

I expect this weekend to be a busy one with buyers looking to ensure that their offers are accepted/agreed by next Friday. What if a buyer puts in an offer, it is rejected, and they don’t have one fully executed by next Friday? They are out of luck!

So if you qualify for either the $8,000 first time homebuyer tax credit or the $6,500 homebuyer tax credit and wish to take advantage of this money, you need to GET MOVING!

Nine Weeks Left in Homebuyer Tax Credit Extension — Will It Be Extended Again?

A discussion I have been involved with here in the Baltimore area about the crippling snow and the effect on the Baltimore real estate market has people in the real estate world wondering if the homebuyer tax credit may be extended again.

On Monday, the Wall Street Journal wrote an article about the credit, and how lobbyists are gearing up to try to have it extended.

In the northeast, the sheer fact of houses not being able to be shown for the majority of a month due to the snow is a big part of the issue.

Other areas of the country make the point, as recounted in the Wall Street Journal article, that banks often are often taking a long time to approve short sales. I personally have found that this delay creates the issue of buyers who qualify for the credit not considering these homes as options.

It will be interesting to see if it will happen. Washington stated that it would not be extended further, and I can understand if that does not happen. Without the urgency of it ending, the credit cannot do its’ job, which is to help people get into homes.

The other looming deadline we have right now is the upfront Mortgage Insurance Premium for FHA loans, and the fact that that rate is going up from 1.75% to 2.25% for loans whose case numbers are assigned after April 5, 2010. This means that buyers desiring to use FHA financing should be pushing to have a home under contract by the third week in March, giving them about three weeks from now, to ensure their case number is assigned prior to April 5, 2010.

Two very important deadlines are looming, and I will be following how the Baltimore real estate market responds to them.

Next Page »