Home Buyer Tax Credit Expiring: Buyers and Sellers Can Benefit

There is some speculation that the $8,000 First Time Home Buyer Tax Credit will be extended beyond the current deadline and potentially increased. Conjecture aside, what we do know at this time is that the current credit is set to expire on November 30th of this year. This gives a narrow and closing window of time to take advantage of this sizable credit. At present the real estate market in our area is very much a sellers atmosphere and highly competitive and challenging for buyers (within certain pricing tiers). However, there is still room for both buyers, and tier specific sellers to benefit. To qualify for the credit the sale must close by November 30th.

AUTHOR’S NOTE: I firmly believe that home ownership is not for everyone, and there is a right time and a wrong time to buy. That time is based more on personal financial condition rather than the whims of the market. The intent of this message is to provide information to those ALREADY considering a purchase or a sale.

Opportunity for Buyers:
For buyers the benefit is clear; close by the 30th of November and receive a check in the mail for the difference of the credit and their taxes owed come refund time. One caveat is the income limitations to the credit. The phase out for individuals begins at $75,000 of annual income, and $150,000 for married couples filing jointly.

However, if there are folks thinking about purchasing and taking advantage of the credit now is the time to take action. Many first time buyers today are coming up against heavy competition, causing the process of finding a home to take weeks or even months, and multiple offer attempts. Realistically if someone is going to close by the 30th of November, they need to be under contract to purchase their home of choice by November, 1st, leaving just 6 weeks to search.

For detailed tax credit information click here.

Opportunity for Sellers:
The tax credit not only benefits first time home buyers, but sellers can be rewarded as well. If you know of someone who owns a property that they believe would be purchased by a first time buyer, and they have considered selling in order to move up or down-size, and are cash-capable to do so, now is not a bad time to list.

Here is why:
· Well priced homes are receiving multiple offers, and are often being bid higher.
· With multiple offers comes lower (or even no) requests for closing cost credits.
· Some well priced homes, in good condition, and in F.T. Buyer tiers are selling in a matter of days.
· When selling, and purchasing with the same agent, agents are sometimes more lenient with their commission rates on the listing side.
· The next higher pricing tier that a seller would purchase into is likely in a softer market, and more open for negotiation, providing for greater savings.
· Coming to market now as a regular sale can make the home a very popular target for buyers frustrated with waiting on short sales, or losing bid wars on foreclosures.

Nothing above is a guarantee, and not all homes will provide the same opportunity, but the possibility is out there.

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