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Wanna Get A Tax Credit? The Clock Is Ticking…

October 5th, 2009 categories: Buying

Almost Midnight w shadowThe calendar says October 5th, which means that there are now less than 60 days before the First Time Homebuyer Tax Credit expires here in Solano County as well as the rest of the U.S.

Or to be more specific, if  you don’t want to take it down to the wire, you really have about two weeks to get an accepted contract if you want to have a realistic chance of closing escrow in time to qualify for the $8,000 tax credit.

I’ve written about the tax credit periodically in this blog, so I won’t bore you with all the nitty-gritty details (click here for that)  but in a nutshell, if you haven’t owned a home in the past three years, you’re probably considered a first-time homebuyer in Uncle Sam’s eyes.

And that probably also qualifies you for an $8,000 credit…but ONLY if you close escrow by Monday, Nov. 30.  If any sort of delay pushes the close of escrow out to that Tuesday or beyond, it’s goodbye tax credit.

So if you’re counting on that $8,000 to furnish, paint, carpet or replenish your savings, November 30th should be a red-letter day on your calendar.

Since most escrows take anywhere from 30-45 days from start to finish, if you do the math, that means you should be in contract by the middle of October to have a decent chance of closing escrow by the end of November.

Remember, too, that Thanksgiving is the week before, which means lenders, title companies and county recorder’s offices (which must record the documents in order for escrow to close) will all be working on abbreviated schedules the week before the tax credit deadline arrives.

And in most cases, your lender will need to wire loan funds to the title company one business day before escrow closes, which means that your loan really must be ready to go BEFORE Thanksgiving.

Try to cut it too close and you’re inviting disaster. You’ll definitely sleep better and have a lot less heartburn if you close escrow a day or two before Thanksgiving rather than relying on everything falling into place the last day of November.

Of course, if you’re a thrill seeker, then go for it. Otherwise, close before Thanksgiving or plan on buying plenty of Rolaids to go with your turkey.

Now, before you break out into a cold sweat, as I wrote a month or so ago, there’s been a move in Congress to extend or even expand the tax credit.

Various legislators have been quoted as saying that they support extending the credit. But so far, with less than 60 days to go, legislation that’s been in the works since June still hasn’t yet gotten out of “committee.”

So as of right now, the clock is definitely ticking…which means that if you want to be sure you don’t miss out on the 2009 tax credit, get into contract very soon.

And then do everything you can to make sure that escrow closes before Turkey Day.

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This entry was posted on Monday, October 5th, 2009 at 10:00 pm and is filed under Buying. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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