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Ann Arbor Real Estate Blog

Blog about Ann Arbor and Saline Michigan

Should the Closing Date for the Tax Credit be Extended?

Ann Arbor Area buyers and sellers, do you think the Tax Credit should be extended for the closing date?

The Missy Caulk Team was incredibly busy the whole month of April with buyers who put homes under contract to get in on the $8000.00 First Time Home Buyer Credit and the $6500.00 credit for move up buyers.

Now it is time to get those homes closed by the June 30th deadline and people are panicking because of appraisal issues or they chose to work with lenders who haven’t been able to get the job done.  To say nothing of a few short sales (10) that have been under contract for 4 or more months.

NOTE: THIS IS NOT AN EXTENSION OF THE CREDIT, only an extension of the closing date to September 30th, 2010.

Today the Wall Street Journal wrote on post on how FRAUD could enter the picture IF agents back dated the contracts. This is a complete NO, NO.

Any Realtor who does this should lose their Real Estate License in a heartbeat.

Since the Amendment to the Bill has already passed the House and the Senate has wide support it will probably pass…but who knows.  I am in favor of the closing date being extended with a paper trail to show the home was really under contract and not backdated.

The National Association of Realtors is in support of the extension.

“NAR estimates the number of home buyers who have qualified for the tax credit and met the contract deadline of April 30, but who would not be able to close their transaction by the June 30 deadline, could go as high as 180,000. Realtors® have reported as many as one-third of qualified applicants have been notified by lenders that their mortgages will not close before June 30 due to the sheer volume of applications in the pipeline.”

What say you?

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6 thoughts on “Should the Closing Date for the Tax Credit be Extended?

  1. Missy…

    I commented on your Facebook status without reading this post. I had thought you meant the actual Tax Credit. In regards to the closing date, I would say add 1 more month. I am sure that there are many lenders dropping the ball in regards to settlement dates. And I am sure that there are some appraisal issues also. But food for thought.. the last date for the contract was April 30th. I can’t believe that it is taking 2 months to close a transaction. If it’s just because of the loan officer and or the lender, that is just sad…

  2. It is not just the lenders, but the short sales that have been under contract for 7 months or longer. Also the appraisal issues that have to be reviewed, and reinspected. Lots of issues and the buyers should not be punished for this.

  3. There are other reasons the loans have not closed. If you bought a new home, you have to have a certificate of occupancy before you close. If you bought a home that needs flood insurance, well Congress hasn’t approved the funding yet, so you won’t be able to close until that happens. There are so many people closing that the title companies don’t have room for any more closings. Extend the closing time.

  4. Anyone who says it should not take 60 days to close a sale knows nothing about real estate. A routine sale in New York State takes approximately 60 days to close when there is a mortgage involved. Cash sales can close in about 30 days. States that do not use attorneys can close faster. Short sales and foreclosures can take months to close due to the banks having to bounce the paperwork between departments and order unnecessary multiple appraisals, BPOs, duplicate paperwork, etc. Right now there are many people who legitimately entered into a contract of sale before April 30 and will not be able to close by June 30. Usually mortgage issues in the form of bank required repairs, bank requests for paperwork that has already been submitted, clogged pipelines in attorneys’ offices and other problems cause the delays. Fraud is not an issue. There is too much paper involved and a paper trail involving too many people. Backdating a contract would be nearly impossible because of the attorney approval process, mortgage applications, home inspections, etc. all being documented. To perpetrate a fraud with the tax credit would require a large number of people all being a party to it. Realtors have virtually no influence on the closing process in states involving attorneys and lengthy mortgage approval processes. It is a cooperative effort among several entities. It is in most cases through no fault of the buyer or Realtor that many of these properties cannot close by the June 30th deadline. The buyers should not be penalized for following the rules established by the Federal government for their tax credit program.

  5. It would be a shock to the real estate market if these contracts did not close. Why? Because many of these sales will allow the sellers to purchase another home. In short sales or foreclosures, this sequence of events does not occur.

    So, extend the deadline or we will see a national real estate market in double trouble.


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