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Nearly 200,000 Could Lose Tax Credit

Remember that the original deadline for closing a home purchase to get the tax credit was June 30 for purchases in contract by April 30.  While Congress is considering extending this closing deadline until September 30, it isn't law yet, and there are as many as 200,000 purchasers threatened with loss of the credit because they can't get their deals closed by June 30.

While there do not seem to be any numbers posted, many of these buyers are said to be trying to do short sale transactions.  In trying to get a bank to take less than the loan balance as the sale price of a home, delays are a well-known problem.  Some sources have stated that as few as 20% of short sale offers ever make it to the closing table.  Many deals die due to buyers walking away after growing tired of negotiating with banks and the associated delays.  If an extension is passed, this could encourage those buyers to hang in and try to get their deals closed, as the tax credit is bonus dollars.

Other buyers simply underestimated the time it takes to get through the process, including inspections and repair negotiations to satisfy lenders, especially in foreclosed home situations.  By the time inspection reports are mulled over by the buyer and their lender, and necessary repairs decided with planned action, it's going to be too late for some.  With the surge of homes put under contract in the last weeks before April 30, there are likely many deals in jeopardy.  

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