Homebuyers Tax Credit to Expire Soon

Experts Warn Homebuyers It's Crunch Time To Get Tax Credit Program Expires Nov. 30

CHANNEL3000.com
Updated: 8:10 pm CDT October 26, 2009

MADISON, Wis. -- The first-time homebuyer's tax credit program expires in a little more than a month, but many who might be looking to take advantage of the $8,000 incentive might already be out of luck.

Time is running out as the Nov. 30 deadline quickly approaches. To be eligible for the $8,000 federal tax credit, the closing on a new home must happen on or before that date.

Anne Blood, director of Madison Area Technical College's real estate program, said that timing might already preclude many from participating.

"The argument being that 30 days to close on a home is very unrealistic in this market," Blood said. "Mortgage companies, banks, all of the lending institutions -- to get these done in 30 days, it just isn't happening as it used to."

Officials said that more than 1.47 million people have taken advantage of the tax credit since it began earlier this year. Some reports suggest about a quarter of those people were buyers who wouldn't have bought a house without the credit.

With time running short, real estate agents and lenders are busier than ever with last-minute sales. While it will be tough, Blood said it's still do-able, but only if would-be home buyers are prepared.

"If you have pre-approval from your lender, I think it could still be done," Blood said. "It's going to be quick, and you need to make sure you have all your ducks in a row. But, it could be done."

Joe Murray, from the Wisconsin Realtor's Association, said the tax credit has done great things to the housing market, but it's crunch time.

"The tax credit expires on Nov. 30, and that's a hard and fast deadline -- unless Congress decides they're going to extend it. And we're working on trying to get that accomplished," Murray said.

There are two debates going on in Congress right now about extending the credit. The first is simply extending the program as it is right now until June of next year. However, there's another argument about increasing the tax credit to $15,000, for all homeowners -- not just first-time home buyers.

That said, experts said people shouldn't bank on that happening, at least, not by the end of November.

In some states, buyers are so serious about the tax credit that they're making it a part of their offer -- meaning if they're unable to close by the Nov. 30 deadline, the deal is null and void, WISC-TV reported.