The White House is kicking around the idea of extending deadlines for this year's $8,000 tax credit for first-time home buyers. About 1.4 million home buyers already have applied for the credits, which essentially are super-sized tax refunds, the Internal Revenue Service said Thursday.
No big surprise there. The idea has been kicking around since Cash for Clunkers arced through the economy this summer. Bankers, builders and Realtors are all for it; they're sweating the recession too. And U.S. Sen. Johnny Isakson, a Georgia Republican and one of more than a dozen lawmakers proposing their own extension plans, wants to sweeten the deal by nearly doubling the credit, to $15,000. However, that may be tough to sell to deficit hawks, Bloomberg News' Dawn Kopecki reports.
But this leaves first-time home buyers - anyone who hasn't owned a home in the last three years - with an $8,000 wager to consider. Do you hustle now to catch a tax break you know is on the table? Or do you wait to get maybe either the same deal or an almost twice better tax break next year, or maybe nothing at all if the credit runs out?
There isn't much time to decide either. Taking the most conservative bet, and grabbing the tax break that's on the table now, requires closing the deal by Dec. 1. That's a daunting process for first timers, as outlined here by Bankrate.com. It's no picnic for those of us who've done it before either.
It's not a quick process either. Under ideal circumstances, buyers can close on their new homes in as little as two weeks after they reach an agreement with sellers, writes About.com's Elizabeth Weintraub. But nearer 30 days is more common and it may take longer.
Count on longer. Tighter lending practices and recession-thinned financial services backshops are stretching the closing process to nearer two months in some places, reports The Wall Street Journal's Amy Hoag. You may want to aim for no later than the last week before Thanksgiving to be sure you don't miss out. Thirty day closings are still happening in the Kansas City area, where I live, but plan on 45 days just to be safe, suggests the Kansas City Regional Association of Realtors.