Tax Credits Expire Soon

Nearly 1.8 million people took advantage of the home buyer tax credit last year. Most of those received the full amount of the credit - $8,000.

The program was extended and expanded, so that it now covers both first-time buyers and many repeat buyers. First timer buyers can receive up to $8,000 and certain repeat buyers can receive up to $6,500.

To receive the credit, eligible buyers must be under contract on a home by April 30, 2010.

That date is not that far off. According to the latest Homebuyer survey by the National Association of Realtors, the typical home buyer spends 12 weeks searching for a home. There are a little more than 11 weeks till the expiration of the tax credit.

The looming deadline has urged more buyers to get out and shop earlier in the year. Last month was Thurston County’s third highest January on record for pending home sales.

In particular, the expansion of the tax credit to cover repeat buyers is helping more repeat buyers realize their dream of moving to next home. Up to $6,500 is available to buyers who have owned a home for 5 consecutive years out of the past eight years.

There is a little more breathing room with this current tax credit deadline. Unlike the previous tax credit, where a buyer had to close on the purchase by the deadline, now the buyer must only be under contract to purchase by April 30th. The buyer then has until June 30, 2010 to close on that purchase.

It is important to remember not to overlook price when putting the tax credit to work. Many homes are affordably priced now. More than one-third of all homes sold in 2009 did so without a price reduction. That means that two-thirds of the homes did require at least one price reduction before selling.

When that perfect home is found for the right price, the available tax credits and quite low fixed-rate mortgage rates make this a great time to buy and get into that dream home.