If you have been thinking about taking advantage the government’s $8000 First-time Homebuyer tax credit, you are quickly running out of time. In order to qualify for the tax credit, the purchase needs to be completed by November 30, 2009. Several things have made this date be a lot closer than you think.
The Phoenix area has become a hotbed of real estate activity over the past months with sales approaching the volume of 2005 – the highest volumes recorded. Values have gotten so low that many homes for sale are having multiple offers by consumers trying to advantage of the pricing. This has created several problems for the potential home buyer.
First, since many of the properties are either bank owned foreclosures or short sales, the banks are slow to respond to offers waiting to see which will be the highest offer. The second problem is that short sales require a lengthier period of time to close just due to the fact that all lien holders need to sign off on the offer; many times offers take 60 days or more just to get any response. Finally, the mortgage lending industry has such a large volume of business the whole approval process is backed-up. This will only continue to get worse as more people rush to get their purchase in time to qualify. More pressure was added to the system by the recent closure of the third largest FHA lender – Taylor Bean & Whitaker – in August.
It is now mid-August, and if you haven’t even started to look or gotten yourself pre-qualified, you are rapidly running out time to get a purchase closed in time. Realistically you should have a purchase offer completed in September to help ensure you will get your transaction completed in time.
If you are considering buying a home, whether you are a first-time buyer or not, values have not been this low since 2002. Mortgage rates remain near historic lows. Neither of these items are likely to continue. Now may be the home buying opportunity of your lifetime.
