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Time Is Running Out for the $8,000 Tax Credit

“But I thought it doesn’t expire until December 1,” you say. “It’s only August!” Granted, the deadline is still over three months away, but the experts are cautioning borrowers that the homebuying process can be a lengthy and complicated one:

Although the end of November might seem a long way off, Diane Dilzell, president of the New Jersey Assn. of Realtors, rightly points out that it takes weeks, if not months, to manage the logistics involved in a real estate transaction. It’s also important to realize that any of a number of things can go haywire along the way.

“Unique circumstances can be encountered in any transaction, so it is important to account for those factors,” said Dilzell, a broker at Pinnacle Realtors in Bedminster, N.J. “Since numerous third parties are involved, delays can be expected no matter how swiftly you act.”

“The mortgage process usually takes anywhere between 45 and 60 days,” say HSH VP Keith Gumbinger. “So while it’s not quite crunch time, it’ll be here soon, especially if you’re still looking at houses. Would-be first-time homebuyers should really begin getting the process started if they haven’t already.”

Since the tax credit caters to “first-time” buyers, lack of experience could be another factor that serves to slow the process down. “The combination of lack of experience and a changing marketplace could definitely prolong the process,” explains Gumbinger.

“Isn’t Congress likely to extend the tax credit anyway?” While it could happen, don’t bank on it. The housing market has begun to show some signs of recovery, and if that continues, lawmakers may decide to let housing recover on its own.

Furthermore, Lew Sichelman of the LA Times writes that “House and Senate leaders have said they will not take up any expiring provisions until they have completed work on healthcare-reform legislation.” With the increased opposition to the president’s healthcare reform, Democratic lawmakers may have a more difficult time passing the legislation if it even happens at all.

For more on rules and particulars of the $8,000 tax credit for first-time homebuyers, be sure to read the Times article in its entirety.