The credit -- valued at $8,000 for first-time buyers and $6,500 for repeat buyers -- prompted a rush of sales this spring timed to beat the April 30 deadline for signed purchase agreements.
But now the June 30 deadline for closing on those sales is looking more and more problematic for many buyers, precisely because that rush is making so much extra work for bank officers and home appraisers who have to sign off on the paperwork.
Buyers trying to use short sales to purchase a house also are seeing weeks or months of delays as those often difficult transactions work their way through the involved lenders.
(In a short sale, a lender agrees to let a struggling homeowner accept less than what's owed for the house as a compromise seen as preferable to letting the home lapse into foreclosure. But it can take a long time and much documentation to get permission from the mortgage holders to do a short sale and then still more time to negotiate an acceptable price with the buyer.)
According to a blog entry sponsored by Total Mortgage, the National Association of Realtors says nearly 180,000 potential buyers who signed agreements before April 30 to get the credit could lose it because they won't have time to close before June 30.
As a solution, U.S. Sen. Harry Reid, D-Nevada, last week co-sponsored a measure that would extend the closing deadline to Sept. 30. It's difficult to know if the measure will be approved, though, because it's been attached to another bill containing some controversial tax initiatives.
What do local agents, buyers and sellers think about extending the tax credit closing deadline? Is there a need for it here? Are you having trouble getting your deal closed by June 30?
(Article by Karen Rivedal, reporter for the Wisconsin State Journal)
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