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Is the First-Time Home Buyer Tax Credit Extension Necessary?

July 1st, 2010 by Mike Dils
Categories: Finance, Home Buyers, Tax
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U.S. Congress

President Obama is expected to sign an extension, approved by the House and Senate, to the June 30 first-time home buyer tax credit deadline.  Why is this extension important and is it necessary?  The simple answer is “yes” to both questions.

The original timeline for the first-time home buyer tax credit, as detailed in our previous post, stated that a home buyer must be in contract by April 30, 2010 and close by June 30, 2010 to be eligible for the credit.  Many first-time buyers positioned themselves to take advantage of this credit which is evident by the increase in sales during the month of April.  The current challenge is getting some of these transactions done in the 60 days previously given between the two deadlines.  This timeline can be especially short considering short sales are still taking, on average, from four to six months to process.

There are many opinions as to why short sales take so long.  The general consensus is that lenders are playing “catch-up” to the mass influx of these transactions, are short staffed and are reworking their processing procedures on the fly.  This extension is important and necessary for these buyers who need the additional time, for no fault of their own, to complete their transactions.  Read the rest of this entry »

Tags: buyer, california, credit, extension, fraud, home, inmate, kaplan, nobullagent, san diego, Tax