Progress made on extending closing date deadline for homebuyer tax credit
NAR's Chief Economist Lawrence Yun announced that NAR had asked Congress to extend the deadline by which deals entered into before May 1 could close and still qualify for the homebuyer tax credit. We scoured Realtor.org looking for more information about this request to Congress, but found none. With no confirmation of the request from NAR's government affairs department, we began to wonder if the request would have any chance. But little by little, we found more information about Congress's moves, giving us hope.
Now, it seems much more likely that the deadline to close deals entered into on or before April 30 and claim the homebuyer tax credit will be postponed. USA Today reported yesterday that the Senate approved an amendment to HR 4213 to extend the deadline until September 30. The Senate's amendment still must be reconciled with the House and the bill must signed by the President, so this extension still isn't a done deal.
But according to some in the industry interviewed by USA Today, stretching the deadline into autumn might not be enough:
"How are you going to close a short sale in two months?" says Edward Goldfarb, a Realtor with Keller Williams in Fort Lauderdale. "Hundreds of people are not going to close and are going to lose their tax credit. September is not any better. A short sale can take a year and a half."
Another concern is that buyers who face losing the tax credit could pull out of pending deals altogether. Any extension must be passed this week, or buyers will start canceling deals next week, before the deadline hits, says Richard Smith, president and CEO of Realogy, parent company of Century 21, ERA, Coldwell Banker and Sotheby's International Realty. "We're concerned, as many people are, that this will force people to cancel their contracts," Smith says.