First Time Home Buyer Tax Credit . . . Act Now or Go Double or Nothin'?
For all those apartment dwellers, roommate haters and those who just haven't been able to cut the cord, NOW is the time! But time is running out . . . in fact, there about four weeks left to find a home, make an offer and have it accepted in order to close escrow by the November 30th deadline for the $8,000 first time home buyer tax credit.
November 30th may seem like a long time from now, but factor in underwriting guidelines that are tighter than a pair of 1980s hot-pink spandex and your offer needs to be accepted no later than October 15th. That’s still over a month away, but reality is that the “good deals” on the market today are nearly all short sales or lender owned foreclosure properties. Since the average short sale is actually a looooong sale, taking between three and six months to get bank approval, they are out of the question for the first time homebuyer looking to pocket an extra $8k for that glass-top stainless steel dining room set with matching leather chairs.
That leaves the lender owned properties; exactly 4,398 of them available in the Arizona Regional MLS as of today. That number is similar to the inventory we were seeing in 2005 during the “boom” days of multiple offers, bidding wars and first time home buyers being left in the proverbial dust of the cash investors. If you’re a home buying virgin, you’ve obviously never experienced a market like that . . . or any market at all . . . but ask any veteran REALTOR® and she’ll tell you that today’s market is giving her a serious case of déjà vu. In fact, the Buyer Specialists on the Arizona Lifestyle Team are writing an average of 10-15 offers for a single client before finally having one accepted. It’s not uncommon to write offers as high as 20% over the list price of a property in an attempt to defeat the enemies in the great real estate bidding war.
Sure, there are bills in Congress as you read this that, if passed, could extend the tax credit, increase the limits, eliminate the income caps, or even open it up to all home buyers. It’s highly unlikely, however, that any of this will happen before the November 30th deadline, if it happens at all. After all, a tax-credit extension would cost the government billions - a big deterrent when the federal budget deficit already rivals the Grand Canyon, despite the more liberal argument that an extension is critical to economic recovery.
So what’s a home-buying amateur to do? If you’re not the gambling type, call your REALTOR® now and spend the holiday weekend (and every weekend this month and next) house shopping and writing offers. If you don’t have a REALTOR®, call the Arizona Lifestyle Team at 1-800-880-7927 ext 7007 and our Buyer Specialists will fill up their gas tanks, pack their coolers with bottled water and fire up their GPSs to get you started on a home buying excursion reminiscent of the time you followed U2 on tour.
On the other hand, if you get your thrills at the Blackjack table, you may want to go double or nothin’ with Congress and hope that the tax credit is not only extended, but increased to $15k . . . ok, almost double. Just don’t come cryin’ to me on December 1st if the bills don’t pass and you end up leaving a refundable $8,000 tax credit on your rickety Ikea table that you can’t afford to replace.