Ah, yes. The Homebuyer Tax Credit. It ranks right up there with health care reform and Eyjafjallajökull as the most-discussed news item of 2010. The proverbial dead horse has been beaten to a fare-thee-well, yet still keeps coming back for more.
The tax credit has, I think, driven many buyers who were on the fence about whether or not to purchase a home into the marketplace. It’s been something of a boon to those who have been able to take advantage of it. If you were able to qualify, that’s a great thing. $8000 (or $6500, if you were already a homeowner) is nothing at which to stick up one’s nose.
But is it, on its own, a reason to purchase a home? Absolutely not.
Everywhere I turn, I see advertisements, blog posts, and the like reminding people that the deadline for being able to claim the tax credit is rapidly approaching. To claim it, you must, in fact, be under contract by Friday, April 30, and you must be able to settle on that contract no later than June 30, 2010. At this point, however, any potential homebuyer who hasn’t been in the trenches and actively looking for a house — and looking seriously — should bide their time. They should not, under any circumstances, rush to sign a contract on a home by Friday, simply so they can claim an $8000 credit.
Because that $8000 isn’t worth the heartache and sleepless nights that will come with making a $300,000 mistake. Because of the pressure associated with meeting this deadline, lots of people are going to dive headlong into a decision that they’re not actually ready to make.
Any REALTOR worth his or her salt will stand up and say so. A good REALTOR — one who’s really looking out for his clients’ best interests — will not urge that decisions be made on a factor that, in the long run, won’t matter all that much.
And if you miss the credit? Don’t worry. The real estate market will, most likely, adjust once the credit expires. The bustling spring sales market will start to ebb. Sellers of real estate will have to consider absorbing some of the letdown, either by conceding some closing costs or, perhaps, agreeing to helping buyers buy points on their mortgages, or agreeing to other credits that will entice buyers to sign when the time is right.
A good REALTOR will understand these things and a good REALTOR will advise his clients of those options of which they might not have been aware.
So, yes. The Homebuyer Tax Credit was nice while it lasted. But don’t fret about having missed it. It’s OK. Really.