First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have Three Weeks To Find A Home

The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify you must close on a home by November 30th; if you close on December 1st, you’re out of luck.

If you’re a first-time buyer in metro Washington, DC, you have just over three weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.

Close By November 13th

In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving this year.

If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:

  • Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
  • Friday , November 27th: Unofficial holiday. Everybody is recovering from their day of gluttony.
  • Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
  • Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.

To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.

Get An Offer Accepted By October 1st

Right now, it’s taking our DC-area clients an average of 43 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by October 1st. That’s a little more than three weeks away.

For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.

Find A Home You Like

Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.

  • http://blog.franklyrealty.com Frank Borges LL0SA

    Are you seeing a flood of buyers looking to get in under the wire?

    If so, what will happen a week later? If buyer’s dry up, won’t prices likely have to go down? And perhaps more than the $8k?

    Good point in not rushing to purchase.

    Frank

  • http://www.brandongreenandassociates.com/ Brandon Green

    Great reminder!

  • Norman

    I would advise folks not to rush in at all. I suspect that prices have been propped up – all along the chain – by 1st time buyers coming in at the bottom with the $8k over and above what they could otherwise afford. I’ll wager that economics 101 rules have not been repealed and that home prices will fall by almost the entire $8k once the subsidy is no longer available.

    (For the same reason, the market for autos is being severely impacted by the ending of the subsidy there. Of course, in that market, the impact is primarily on sales volume rather than prices because of the limited number of suppliers of vehicles.)

  • http://www.ngrealtygroup.com Baltimore Homes

    As with the end of any sale or special (what the credit actually is in psychological terms) you will usually have a buying panic toward the beginning and now the end. So run don’t walk to get your foot in the door of your new home (just kidding).

  • Clint

    To give a little perspective on this, for most first time home buyers, the tax credit is probably only around 2% of the overall cost. I don’t think it is unreasonable to assume the market will go down 2% in the next few months after the credit expires. The credit may even be extended but we probably won’t know that until December.

  • Pingback: First Time Buyer Mortgages | Mortgage Capped

  • http://www.webjam.com/breastactives NoniEngerge

    CrerePype, http://www.webjam.com/breastactives, Assorsbag, breast actives, apaptaxtymn