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28 June 2010

Tax Credit Extension or Not

We prospect diligently to find qualified buyers. We work with them tireless to find the perfect home. We negotiate expertly on their behalf to get an accepted offer. But then the real work begins these days. As we try to hold it all together and actually get to a successful closing.

NAR estimates that as many of 180,000 buyers along with the thousands of agents who worked with them may not see the keys to their new home or a commission check. These buyers had an accepted offer in place prior to the April 30th deadline of the HomeBuyer Tax Credit but may not be able to close that transaction by the June 30th deadline. Despite the efforts of many people, lawmakers failed last week to vote for the bill that would extend the closing from June 30th to Sept 30th.

This combined with the discouraging economic news on new construction and mortgage applications have been a frank reminder that although the first part 2010 gave us hope, we still have a long road ahead. There is still a slim chance that an extension on the closing date for the tax credit may happen. We’ll know more as this week plays out.

My first broker used to tell all his agents “Don’t spend your commission checks until you have them in hand.” This latest turn of events has certainly reinforced that advice.

6 thoughts on “Tax Credit Extension or Not

  1. On Tuesday June 29th in a 409-5 vote house lawmakers passed a standalone bill that would extend the closing for three months and allow those under contract to claim the federal homebuyer tax credit as long as they closed by Sept 30 2010. The Senate still needs to vote on the bill, but things are looking hopeful.

  2. Breaking news …

    Home Buyers’ Tax Credit Extended

    By THE ASSOCIATED PRESS
    Published: June 30, 2010
    10:10 p.m. EST

    Congress has sent President Obama a plan to give home buyers an extra three months to qualify for up t0 $8,000 in federal tax credits. Buyers who already have signed contracts will now have until Sept. 30 to complete their purchases. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale. The House approved the measure on Tuesday. Legislation in the Senate was approved Wednesday night by unanimous consent.

    [A version of this brief appeared in print on July 1, 2010, on page A18 of the New York edition.]
    http://www.nytimes.com/2010/07/01/us/01brfs-HOMEB

  3. What we really need is a new incentive with new dates in order to move the rapidly accumulating inventory, a large percentage of which is becoming underwater short sales.

  4. It's enough of the incentives, it's time to see if the market can hold it's own and to see exactly where the market is. So far buyers are mostly purchasing homes because the taxpayers are paying part of the tab. I'm for realtors making money, but I don't want to help pay for anyones commissions.

    What this really shows is that consumers don't see the market as being stable….prices are already down and rates are at historic lows…yet consumers still don't have the confidence in the market…and for good reason.

    If the brokerage industry wants incentives then we need to create them on our own…lower commissions…lower title ins fees…lower mortgage fees etc. We don't need handouts. This is something the industry can do on its own, but we don't want to give up anything.

    Sorry, but the government shouldn't be bailing out realtors and buyers have all the incentives they need. Self serving tax appeals isn't what the country needs riow.

  5. I have a client that was going to lose his credit because his short sale wouldn't close on time. I am glad that he, and some others are getting some relief but I am curious as to how many more will actually qualify.

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