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June 30, 2010

Home buyer tax credit closing deadline: Sept. 30

The Senate has passed a measure to extend the closing deadline for the home buyer tax credit to Sept. 30, which means it's now headed for a presidential signature.

Dow Jones Newswires reports that senators decided to separate the tax credit extension -- popular with elected officials -- from the more contentious proposed extension of unemployment benefits. The Senate approved the tax-credit grace period unanimously.

That bill is a twin of the one passed by the House on Tuesday.

I haven't heard any rumblings that President Obama is inclined to veto a tax-credit extension, so it looks like all you buyers tied up with long-running short sales, paperwork problems and the like have another three months to close your deals.

A reminder: This does not give more time to folks still looking. The deadline to get under contract for a home was April 30.

UPDATE: The National Association of Realtors says, "There will be no gap between June 30 and the date the president signs the bill into law." Just in case you were wondering.

Posted by Jamie Smith Hopkins at 11:34 PM | | Comments (15)
Categories: First-time buyer tax credit


YES! My bank has taken over 90 days to close (not even a short sale) and should have me in my new house within a week. I was really hoping this would happen - thank you for the report!

Let the contract-backdating games begin!

I am a Realtor, I've had a family under contract to buy a short sale property since last Thanksgiving. That's 8 months. We are getting the run around from the bank. Bank Of America is a joke. I personally will NEVER do business with them again. This buyer really needs the tax credit extention to pass. It's not their fault the people we have been forced to work with a Bank of America are total idiots!!!! Something has got to give. If I were the CEO of Bank of America I would fire the entire short sale staff including all the so called negotiators....they can't negotiate their way out of a paper bag! These idiots are costing the investors a rediculous amount of money. Money that could have been saved had they just done their job in a timely manor! Come on.....If I ran my company like that I would be out of business faster than I could type this complaint

All this does is extend the date of the closing. If it extended the date for getting into the credit, it would have a much bigger impact.

Lini, have you considered writing to Bank of America senior management about this? If they're not reading this blog, they might be thinking their employees are doing "heck of a job". If everyone only complaints here, nothing will ever change...

There is still time to back out. You will save a lot of money getting out of the deal. Just think what prices are going down to once the summer is over and the extension passes. Purchase applications are at a 13 YEAR LOW for a reason. If the $8,000 credit was not a motivating factor, wouldn't it be better to save an extra 10% off the purchase price? Think about it.

While this home tax credit is already a travesty, I fully expect it to be renewed given the fact that we are speeding into a deflationary depression - and our government needs more blood from the unwashed masses to grease the wheels...

May pending home sales tumble without tax credits
Pending homes sales tumble in May to lowest level on record after tax credits expire

J.W. Elphinstone, AP Real Estate Writer, On Thursday July 1, 2010, 10:33 am EDT
NEW YORK (AP) -- The number of buyers who signed contracts to purchase homes tumbled in May, a sign the housing recovery can't survive without government incentives.

The National Association of Realtors said Thursday its seasonally adjusted index of sales agreements for previously occupied homes dropped 30 percent in May from April. The index fell to 77.6 from 110.9. May's reading was the lowest dating back to 2001.

The index also was down 15.9 percent from the same month a year earlier.

The reading provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.

The sharp declines were widespread. Pending sales dropped by 33.3 percent in the South, by 32.1 percent in the Midwest, by 31.6 percent in the Northeast, and by 20.9 percent in the West.

Federal tax credits helped to boost home sales this spring. First-time homebuyers could get a credit of 10 percent of the purchase price up to $8,000, while homeowners who bought and moved also could get 10 percent up to $6,500.

The deadline to get a signed sales contract was April 30.

It was widely expected that sales would flag once the tax credit expired. But such a large decline in sales is surprising.

"We are once again struck by the force of the drop," wrote Dan Greenhaus, chief economic strategist at Miller Tabak + Co. "There is simply no other way to spin the recent housing data as anything other than significantly worse than virtually anyone, including the housing bears - a group in which we find ourselves - envisioned."

There had been hints that the falloff could be worse than expected.

Last week, new home sales for May dropped 33 percent to the slowest pace in the 47 years records have been kept. And it was the largest monthly drop on record.

Homebuyers did get a little more time to close on their homes and receive the tax credit. Congress this week voted to extend the June 30 deadline to complete sales until the end of September. But that only affects those who met the April deadline to sign sales contracts.

Wah, Wah! I don't plan to sell my house for at least 10 - 15 years. I want the tax credit extended until I am ready to sell my house and then buy a new house. Why should I be punished just because I am not ready to move for a few years. I want my freebies. Wah, wah, wah.
After all, our grandchildren and great grandchildren are the ones who will have to pay the increased taxes necessary to funds these tax credits and who cares about them? I want my tax credits when I am ready for them wah wah.

John, I am in the same position as your buyers. I stupidly went with Bank of America as my lender. They won't approve my loan even though I am putting down 20%, have perfect credit, plenty of cash in the bank, etc... I am an ideal buyer. It makes me sick to think of all the fraud from previous deals during "the boom" and now me, an honest hard working person, cannot get a loan approved. They keep asking for the same crap over and over. It's such a joke.

I am having another issue arise now. The house is obviously in the foreclosure process. Well it's been almost two years since the owner stopped paying. Is there a chance the bank will foreclose on the property even though a short sale is pending? If they do, it screws me and the realtors. Do banks do this if they feel the short sale won't happen in a reasonable time?

My previous post was towards Lini Siebke, not John.

Well it appears the foreclosing bank is going to allow additional time to close the short sale. I doubt BoA will get their act together and get the loan done in time. I'm most like screwed...

They are simply causing people to rush into things that they may not be able to pay for later on.

Actually, this is a very good news to everybody especially to those first time home buyer who have not finish their requirements yet. Now, eligible taxpayers who contracted to buy a home, qualifying for the first-time home buyer tax credit before the end of April 2010, now have until September 30, 2010 to close the deal. To be eligible, buyers need to be in a binding contract that was in place by April 30.

We were dissapointed to hear that there was only an extension for the closing date, and not the date of April 30th when your contract had to be signed. We signed our contract May 1st not realizing that the day you had to close by, was going to be extended. Had we known this, we would have made sure to schedule our contract signing one day prior. We will also be closing on our home before Sept 30th. Wish there was a one day grace period for that.

why doesn't Congress just go ahead and extend the new homebuyers credit until the end of the year instead of putting around with an extension here and a change there. We need all the stimulus we can get to get these houses moving!!!!!

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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