First-Time Homebuyer Tax Credit

It’s safe to say that the word finally got out about this tax credit. It seemed like it took a couple of months after the program was announced, but first-time homebuyers have represented a very large part of the residential real estate business all summer.

The end of the program is closer than most imagine. It is well known that qualifying purchases must be closed by November 30. I talk to quite a few people, though, that aren’t anticipating the inevitable “last minute rush” near the end of November, or the fact that Thanksgiving will make one of those weeks short. I’m advising my clients to plan on closing no later than November 15.

With the new “wrinkles” that have been introduced into the mortgage business this year, I also prefer to think in terms of 40 to 45 days from contract to closing. I have closed several transactions much more quickly than that this summer, but with HVCC and HERA and very conservative underwriting there is almost always the possibility of a delay, and the IRS won’t care whose fault it is if closing doesn’t happen in time to qualify for the tax credit.

So … backing up from November 15, homebuyers who want this tax credit should plan to have their next home under contract by about October 1 — less than three weeks from today. If you haven’t started shopping yet, it’s time!