The home buyer tax credit that moved up so many closings in the real estate world has 2 days left. If you do not close by Wednesday at midnight, the home you went to contract on just got between $6,500 and $8,000 more expense.
Ouch!
So the 180,000 families that the National Association of Realtors expect not to be able to close in time are going to save the government between $1,170,000,000 and $1,440,000,000 in tax credits.
But the reality is even worse. How many of these homes had people qualifying for the loans needing the $8,000 tax credit to qualify? Or how many will walk away from the contracts now that the tax credit is taken away?
The tax credit spurred people into action, that is for sure. However now the market is dead in the summer selling season and there are going to some very unhappy people out there.
Congress last fall extended a tax credit, worth as much as $8,000, to buyers that signed contracts by April 30 and closed on transactions by June 30. The real-estate industry stepped up calls for an extension of the closing deadline in recent weeks amid concerns that some buyers might miss the deadline after a last-minute home-buying rush led to bottlenecks at banks, appraisal firms and title insurers.
But a Senate bill that included the extension failed to secure enough votes last week and has been shelved.
The National Association of Realtors said that as many as 180,000 contracts that were signed by April 30 might miss the June 30 closing deadline. But it is unclear how many of those sales won’t happen as a result of missing the tax credit.
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