Probably won’t happen. The bill that the tax credit extension was attached to failed last Thursday and with the current deadline being set to expire on Wednesday, there seems to be little chance of an extension being passed. However, the National Association of Realtors is hopeful:
(June 25, 2010)—NAR is working very closely with key Members of Congress and the Senate on a possible extension of the June 30, 2010 deadline for closing contracts eligible for the Homeowner Tax Credit. NAR is pursuing all possible options to determine what other legislation may be available for passing a June 30 extension. Each of the possible options face difficult obstacles, but NAR’s efforts to clear the way are on going. The Senate will not have any votes today, June 25, which will push the Tax Credit Extension deadline to the week of June 28, 2010. In the meantime, those impacted should proceed as if the June 30, 2010 date is binding.
Of course, this current tax credit is an extension of the previous credit which was an extension (and addition) to an even earlier tax credit from 2008. Nevertheless, there were many people (NAR says around 180,000) that were expecting this credit and won’t be getting it. So what do buyers in this situation do? Stick with the current purchase without a tax credit or move on and keep looking (or wait)?
Either way, you won’t be getting $8,000 from the government and if they don’t extend this, they probably won’t do another credit in the future unless shtf (again). If the only reason you chose the house you are currently purchasing was because of the tax credit (which you shouldn’t have done), you’ll probably want to walk away and rethink your home purchasing decision (consult your agent/lawyer regarding earnest money deposits and other liabilities you may have incurred). However, if you were looking to purchase a home and the tax credit was just a bonus, you’ll probably be best off sticking with the home you have under contract assuming that it is still a good deal (which most will be). The added benefit will be if they do extend the credit through September 30, 2010 (the originally proposed date) and you stay under contract and close before then (but after June 30th) you’ll still get the tax credit. Whereas, if you jumped ship and found a different home, there is no chance you’ll get the credit.
I’ll keep watching the news blips on this and update as I get them.
(June 29, 2010)—The United States House of Representatives has just passed HR 5623, the Homebuyer Assistance and Improvement Act of 2010, by a vote of 409-5. This bill extends the deadline for closing tax credit eligible transactions from June 30 to September 30, 2010. The bill moves to the Senate where the outcome is much less certain. NAR will continue to update you as the events move forward.
We’ll see if this gets passed in the Senate or not…
