Los Angeles Sweet Digs

September 8, 2009

First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have Less Than Four 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 Southern California, you have a little less than four 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.

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: Los Angeles & Orange County offices are closed.
  • 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 4th

Right now, it’s taking our clients in Southern California an average of 40 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 4th. That’s 26 days 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.

Posted by Chris Glew on September 8, 2009 4:54 PM | del.icio.us | Digg

  • Hey everybody. We love debates here, but no personal attacks. Let’s keep the focus on real estate.
  • Come on guys money is money. Get it now or get it later if the market drops or nothing if it doesn’t drop. Just get the mortgage that matches your budget. This is why you buy in a sellers or buyers market. Good luck.
  • Hey everybody. We love debates here, but no personal attacks. Let's keep the focus on real estate.

    There's no reason to assume Gary doesn't have a college degree. In fact, Gary has a degree in business administration from the University of Cincinnati.
  • SFV818
    Gary Kolar's comments are just too funny. If he's a realtor is California, his comments about a lack of shadow inventory, over-bidding, and market upswing are pure BS. Sure, if you find the house you LOVE, buy it and like it. BUT I wouldn't be reaching to buy because you're fearful of the market rising. The only homes being over-bid are the ones priced BELOW MARKET VALUE. For all the other homes, make your first offer your best offer. If the seller counters higher, you counter slightly lower. Realtors are not experts and ones that pose to be like Gary are just upset that business is slow. Remember Gary isn't college educated and that 1 econ class you took in college makes you more of an expert than him.
  • Gary Kolar
    Prices dropping 20-30%??? I guess it depends on what market you are talking about. I am a Realtor and our local market is on the upswing and if you do not over bid the home, you have no chance of getting it. As for the supposed flood of repos, its not going to happen, at least not here. I track the notice of defaults and the homes going back to the bank on a daily basis and see absolutely no "flood", "wave", or "shadow inventory" hitting the market anytime in the near future. This is also backed up by the bank agents in my office, not a one of them has more than one or two homes coming up in the next two months. We have already passed the bottom of the market and prices are rising. If you are thinking about buying, contact your agent to find out your local conditions and see if now is the right time to buy a home.
  • Thomas-
    1. The income limits for the tax credit are based on your modified adjusted gross income (MAGI).
    * Single taxpayers with a MAGI between $75,000 and $95,000 are eligible for a partial credit:
    * Single taxpayers with a MAGI greater than $95,000 are ineligible for the credit.

    * Unmarried partners who purchase a home together can split the credit, or one partner can claim the entire credit.

    * Married couples who file separately with a MAGI of less than $75,000 will be eligible for a maximum credit of $4,000 each.

    * Filing jointly with a MAGI between $150,000 and $170,000 means you're eligible for a reduced credit.


    2. The $8,000 tax credit is not a loan. However, you have to stay in the home for three years. If you sell within 36 months of taking ownership, you have to give back the money.
  • Glenn JeanJacques
    Come on guys money is money. Get it now or get it later if the market drops or nothing if it doesn't drop. Just get the mortgage that matches your budget. This is why you buy in a sellers or buyers market. Good luck.
  • Diaphne THINKS
    Yes $8-10k is nice, but why get all hot and bothered over it, when the market will be falling another 20-30% before stabilizing? This is the proverbial drop in the bucket.

    Just hang on--you'll be glad you waited.
  • Thomas
    Can you help me confirm two things? Because I have read deviating stuff on the internet.

    1. Is this tax credit conditioned on your yearly salary? If I make 130k a year, would I qualify for the 8k tax credit?

    2. Is the 8k tax credit in real life just a loan, you have to pay back the following three years through your taxes?

    Thanks
  • Betty
    The extension is only speculation at this point. There is a bill that was introduced that will extend the credit through 2010 but also calls for some outlandish additions such as eliminating the income ceilings and extending the credit to all home buyers not just first timers. I doubt it will pass with those provisions added.

    http://www.govtrack.us/congres...
  • Vermil
    Hey First Time Buyer do you know of a link that verifies the extension?
  • Greg
    Don't count on getting the money any time soon. I mailed my amended 2008 return June 18th (3 days after I closed), I confirmed with the IRS that they did receive it June 22nd. The IRS told me it's at LEAST a 12-16 week wait to get the check. The woman there said they are overrun with the "cash for clunkers" auto program.
  • First Time Buyer
    Just heard in the news not only is the goverment extending this offer but increading it to 10K!!
  • Sam Raymi
    No rush!....but your sense of urgency is noted. Gov't is more than likely to extend or increase the credit in order to apply more make-up to this pig.
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