Deadline nears for 1st time homebuyer tax credit
The deadline for the 1st time homebuyer $8k tax credit is November 30 and it may seem like you've got a lot of time but if you are thinking about buying a home in Charleston, you just can't wait for the last minute and expect to close by the deadline.
Much of the activity in the Charleston real estate market this year has been by 1st time homebuyers who have taken advantage of lower prices and an $8000 credit on their income taxes. And as a result of that, there has been a lot of activity in homes at lower price points.
Now, with the deadline approaching, if you are planning on buying a preowned home, circle from around late September to early October on your calendar as your deadline to select a home because it will take from 40 to 60 days to close.
If you are planning on buying new construction, that deadline is just about now because if a home has not started construction, there isn't a very good chance that it will be completed before November 30th no matter what the builder may promise (and there isn't much chance the builder will agree to knock $8k off the price if they happen to complete the home in early December). There are of course some spec houses currently under construction that may also be available.
And what about short sales. Well, since short sales are contingent upon 3rd party lender approval and that approval moves at a snails pace in the best of times, the likelihood of closing before the deadline is the proverbial slim and none and slim left town.
A couple of articles by the Chicago Tribune and Reuters talk about the buying frenzy by 1st time homebuyers this summer to buy before the deadline.
Will the deadline get extended?
There has been some chatter that the deadline will get extended by the government to help the housing industry. But there is no assurance of that and no assurance that it will be as favorable a tax credit. Don't forget, last year's program was nothing more than an interest free 15 year loan which had to be paid back.
And unlike the cash for clunkers program, don't forget the government doesn't own the housing industry like they own GM and Chrysler. And some day, the government will just have to stop spending money to bail out every business in America (or maybe they won't, who knows).
Sitting on the fence?
There certainly are some people who are sitting on the fence unsure whether it is a good time to buy. First of all, take a careful look at your personal financial situation; your savings, job security, etc. If all that checks out positively and you'd like to own a home, then do a financial analysis of whether renting vs. buying is better for you.