By That’s right. It’s back. The homebuyer tax credit strikes again – like a string of sequels in a movie franchise.
First, there was the first-time homebuyer tax credit. It received mixed reviews, but ticket sales were good, and popular opinion encouraged a sequel. The Homebuyer Tax Credit: Part II (The Revenge), opened to great fanfare. It ran only for a limited engagement, however, and people clamored to take advantage of its benefits before the end of its run in the real estate (and economic) theater.
Many of those who were able to get in on the homebuyer tax credit, which stipulated that buyers needed to be under contract by April 30, 2010, but also close/settle by June 30, 2010, are now finding themselves in a bit of a pickle.
So many people bought homes in order to take advantage of the credit that banks, lenders, title companies, and every other body that plays a role in the settlement of real estate transactions, are having one heck of a time getting it all done by the June 30 deadline (which is approaching rapidly). They’re so backlogged that many buyers might not get their tax credit after all.
Unless Congress takes action. Quickly.
Right now, they are considering extending the time to close those transactions by as much as three months. That’s a good thing, too, because the National Association of REALTORS (NAR) estimates that if Congress takes no action, as many as 75,000 homebuyers might lose out because they can’t meet the June 30 deadline.
Regardless of your position on whether the tax credit was a good idea in the first place, I think we can all agree that everyone who was under contract in time to claim it ought to be able to do so. That the settlement process is totally backlogged isn’t their fault and they shouldn’t be punished as a result.
What will Congress do? Will they save the day for tens of thousands of Americans? Stay tuned … the credits on this story haven’t rolled just yet!
June 15th, 2010 at 6:07 pm
There is not doubt in my mind that this makes a ton of sense. I am not sure that 3 months is the right amount of time, but it should certainly relieve a great deal of pressure. The other gain would be to keep closing activity up for a little while longer which is good to establish a stronger base for a sustainable recovery.