Another home buyer tax credit extension [get over it]
Spreading like wildfire was the news that the Senate passed yet another extension to the home buyer tax credit yesterday. Here are the facts. The House has not yet passed it and it has not been signed by the President. And it is only an extension of the closing date to September 30 from June 30 in order for the banks who have been dragging their feet and are apparently understaffed to process the loans for those home buyers who actually qualified by having a ratified and binding contract prior to May 1.
OK. Now get over it.
The bill was led by the Senate's famous sourpuss, Harry Reid from Nevada, the foreclosure and short sale capital of the US. And don't kid yourself, it was all about needing extra time to process short sales which of course are lengthy transactions and many will still not close in time to meet the new deadline. I personally had all of my tax credit sales close on time including a home under construction that closed yesterday. There were no problems with the banks and I advised several clients to avoid short sales if they wanted to close in time for the deadline.
But the news brought out buyers wanting to know if they could now qualify and Charleston real estate agents thinking that they'll now be able to sell another house. That brings up the point about why people are buying a home in the first place, is it for the tax credit or is it because they are ready to buy a home. And if it is the former, well, I would suggest there is trouble on the horizon. And many of the former free market types who happen to be Charleston real estate agents think we need the tax credit reinstated. Oh come on, get over it.
As a society, we have become addicted to tax credits, rebates and other incentives rather than being ready and able to buy a home or many other products and services for the right reasons.
Not that there is anything wrong with a sale but ... buy what you can afford.
Here is a well written article with more perspective on the tax credit extension by Ann Brenoff at Housing Watch, Home tax extension is much ado about nothing.
And credit to SabrePoint for a wonderful Harry Reid caricature.
UPDATE: The pork laden bill which the home buyer tax credit is just a part of appears to have failed to pass so unless there is a last minute passage or if the bill is passed at a later date and made retroactive, if you can't close by June 30, you will not qualify for the tax credit.
UPDATE: The House has passed a standalone bill to extend the closing date but the Senate must still approve the measure before the President can sign it into law.
UPDATE: The Senate has passed an extension and it is expected to be signed by the President. So that gives a few people a little more time to close a short sale and a few extra people who were buying a new home not expected to be finished in time will now get a little bonus. As to those who were experiencing delays with their lender, you also get more time to close and probably should find another lender anyway.