Buy Now or Suffer 8,000 Consequences?

Today I got this email from a friendly neighborhood Realtor:

Hello everyone,

I wanted to send out a friendly reminder about the deadline to take advantage of the first time home buyer tax credit.  The tax credit expires on Novemeber 30th, 2009.  However, assuming a 45 day escrow period from the time you buy to the time you close and get the keys, you would need to find a house, negotiate a purchase price, and have mutual acceptance by October 15th to take advantage. There are some income restrictions, it must be for your primary residence, and you must not have owned a home in the last 3 years.  If you or anyone you know would like more information about the tax credit, please email me and I will follow up.

Arg! Less than a month to find a house and close escrow?

On the other hand, I heard a rumor that this tax credit may be extended. Hard to imagine we have the money to do so in this country, but still, that’s the gossip from my broker. Nick Timiraos of the WSJ blog writes:

Not only are some legislators (and real-estate industry lobbyists) already pushing hard for an extension of the tax credit, which will expire Nov. 30, but they’re also arguing that it should be increased, to $15,000, and expanded to all buyers, and not just those who are first-timers. The current $8,000 tax credit emerged in the stimulus legislation that Congress passed in February, replacing an existing $7,500 credit that had to be repaid over 15 years.

The questions are not just whether the country has this money available, but whether other issues, such as health care, will push the homebuyer’s plight to the back burner.

In the meantime, we first-time buyers have about a week to buy our homes, people. No pressure.

Generous Uncle Sam, Via Coldwell Banker

7 thoughts on “Buy Now or Suffer 8,000 Consequences?”

  1. As much as I respect the moves the Obama admin is trying to make to improve the life of the middle class in this country, there’s a limit on the country’s funds. I believe we are already over that limit as is.

  2. I am not sure 8k is enough motivation for someone to spend 800k on a house. Isn’t the low end of the market clearing up with foreclosures and 300-400k homes getting multiple bids ?

  3. I’m a Realtor who’s not a fan of extending the credit (actually, there’s a lot of us out there). A buyer really shouldn’t let the lure of a one time $8K tax credit push them into a home purchase. I don’t believe that we should borrow more money to provide a big tax break to a select few.

  4. Asad, well stated. I always wondered if that credit did much for the SF market, being a drop in the proverbial bucket here. Seems more something for cities and their residents enjoying more moderate prices.

  5. Many people find themselves to have mortgages they are not really able to afford because of rising interest rates and real estate prices. But, do people truly let go of homes at auctions for mere coins?

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