Since February 1st I have been contacted by two first time buyers, who wanted to know whether they still have time to take advantage of the $8,000 tax credit, so I thought I write a post to shed some light. I am sure there are more buyers out there who are wondering the same thing, and it would be a shame to miss the opportunity to buy a home and take advantage of the credit, thinking they don’t have time.
So, is there enough time to take advantage of the tax credit if you start looking for homes now? The short answer is YES!
Let me explain in detail:
Background: As most of you already know, a tax credit of up to $8,000 is available to first-time home buyers who purchase a primary residence by April 30, 2010. To clarify further, you don’t actually need to be in your new home by April 30th. If you have a sales contract by April 30th, and complete the purchase by June 30, 2010, then you qualify.
Timetable: So let’s say you start looking for a home on March 1st. That leaves you with about 8 weeks to find a home that you like. Is that enough time? Again, my answer is, YES it is!
In my experience, I have had clients who found a home in as little as a week, and clients who were looking for something very specific and it took us about six months. In the latter case, it was simply a matter of looking for something so particular, that it just doesn’t come on the market often. But that’s the exception. Generally speaking, in 3-8 weeks one can see enough homes to find one to your liking. I am making one assumption here, which is that the market has a healthy inventory (most areas have a good inventory at this time).
Now, once you find a home you like, and assuming there is agreement in the basic terms between you and the seller, it will take anywhere between one to a few days to get it finalized (or “ratified”). As long as the contract has been ratified by April 30th you will be within the time frame for the tax credit.
Once the contract has been ratified, and for the purpose of this example we will assume it happened on April 30th, we have almost 8 weeks to go to closing. Again, this is plenty of time assuming there are no issues with the property (e.g. home inspection unveils a major problem). It typically takes between 3-6 weeks for the inspections, appraisal, loan processing, title work, and other paperwork to be ready so there is plenty of time to go to settlement (or “closing”) before June 30, 2010.
Before you know it you will be in your new home and will have taken advantage of the $8,000 tax credit!
If you are still thinking about buying a home, you could wait a little longer before you start looking, but why not start today so you don’t feel rushed by the April 30th deadline? Send me a note through my contact form or call me to schedule an appointment to discuss your options in detail. I love working with first-time buyers!
