First-Time Buyers Have Just 9 Weeks to get Closed and Claim Credit

Part of the economic stimulus package passed earlier this year, the $8,000 first-time homebuyer tax credit does not have to be repaid and is available to anyone who has not owned a home in the last 3 years (purchase price and income restrictions do apply so check out www.federalhousingtaxcredit.com for complete details).

"There's definitely a sense of urgency," Donna Zisoff, Broker Manager of the Highland Coldwell Banker office, said. "I'm telling my buyers that we need an accepted contract on the home of their choice no later than October 14th. That gives us just 6 weeks to remove all of their contingencies and close their loan before the November 30th deadline. When you consider the fact that Thanksgiving is on the 26th and title companies will be closed until Monday the 30th, this definitely shortens the window on meeting the deadline. It would be best to try to beat the last minute rush and close by November 20th."

Along with helping buyers find the home of their dreams while there is still a lot of inventory to choose from and interest rates remain at all-time lows, Zisoff is working closely with her clients to ensure they are better prepared for the approval process in light of new lending laws.

"Ideally, all buyers and especially first-time buyers should get pre-approved for your mortgage before looking for a home," she said. "Not only will this process help target your price range and costs involved, you'll also benefit greatly from getting all of your paperwork in order ahead of time. With new guidelines, underwriting is taking considerably longer. A few of the lenders I work with on a regular basis have told me they are getting very busy. They will be under tremendous pressure to try to get their loans closed before the end of November."

A real estate veteran who has been in the business since 1976 and a manager with Coldwell Banker since 1982, Zisoff points to recent activity as an indicator that the mad rush has started for people who see the tax credit deadline looming.

"For the first time in 18 months we are starting to see multiple offers again," she said. "Four agents dealt with this over the last weekend, and I experienced it as well on a listing priced in the $150,000 range that sold in less than 10 days. Who would think that you couldn't purchase at list price in this market? However, it's the sellers who truly understand this market, are reasonably priced and show the best value that are now receiving multiple offers."

"There's no doubt that this is a great time for move-up buyers as well," Zisoff added.

"For buyers who own an existing home, the tax credit for the first-time buyer has significantly improved their chances of selling now, so they can get their next home before interest rates begin to climb."

According to the National Association of Realtors (NAR), the recent surge in home buying activity can be attributed to the first-time homebuyer tax credit. The group estimates that 1.8 million buyers will file for the credit, with around 350,000 of those stating that they wouldn't have been able to do it without the credit.

"One thing that many first time home buyers appreciate," Zisoff said, "is the fact that they can now buy a home that needs a little work. Normally they wouldn't be able to afford some of the more common improvements to an existing home. With the tax credit, they are often able to do those and even a little more."

Typically, you start to see the local real estate market begin to slow down a bit in late October or early November, according to Zisoff. However, if her office of 35 sales associates keeping pace with the frenzy of first-time homebuyers is any indicator, things are gearing up for the busiest fall ever.

"We watch the market every month in each of the individual towns where we do business," she said. "We track new listings and pending sales. For quite a while, new listings surpassed pending sales across the board, which indicates inventory is building and prices may still be declining. Now, we're starting to see the gap close a bit in all areas. Just recently Highland was nearly level with the new listings coming on the market about the same as pending sales. That's encouraging for us, because prices are leveling. It demonstrates why now really is the time to act."

Because timing is going to be such an important factor for first-time homebuyers looking to take advantage of the tax credit before it expires, Zisoff strongly recommends seeking the guidance of an experienced real estate agent.

"You can certainly start your home search online." she said. "But, when you're ready to narrow it and make a decision, it's essential that you work with a Realtor who can guide you through the entire process in a timely fashion. We're fortunate to offer a one-stop shop for our clients at Coldwell Banker. For many of our clients it makes life a little easier knowing we are affiliated with related professional service providers including lending, insurance and title companies."

For more information on the first-time homebuyer tax credit or selling your existing home while it's still available, contact the Coldwell Banker Residential Brokerage office located at 2166 45th Street in Highland at (219) 922-2323.