Will Short Sales Meet the 2010 Federal Tax Deadlines?
Will home buyers be added to the list of consumers suffering financial harm because of the actions of soulless Big Banks and major lenders? I am concerned because this may be the last shot first time home buyers have at the $8,000 federal tax credit.
What deadlines?
Home buyers must be under contract by April 30, 2010 and then close in 90 days. From IRS.gov
"an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010"
Sounds generous at face value. BUT, I have been doing short sales for a while and banks have not significantly shortened their response to contract offers despite promises to the contrary to Congress and to the American consumers.
Banks Still Dragging Their Feet When Responding To Contracts
When we send a contract in on a short sale, we are still sitting by the phone and waiting,,,,,and waiting and waiting for the bank to get back to us with an answer. Probably just a matter of not allocating personnel to a "work out" department in the banks structure.
But, the lack of communication puts the home buyer seeking the $8,000 tax credit AT RISK.
HOME BUYERS Only Get One Shot
Home buyers only get one shot at the Federal Tax credit. I am going to advisel my buyers to make offers in MARCH if they want to buy a short sale home AND get the benefit of the $8000 Federal TAX credit. Anything beyond the latter half of March and I would be concerned the Banks will not respond in time to be Under Contract AND close by the qualifying deadlines.
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I noticed a blog yesterday that highlighted Wells Fargo for streamlining the short sale process. Hopefully other banks will follow.
And another blog from an agent in Charlotte who was asked by Bank of America to serve on a task force to HELP get their short sale process figured out! Could it be?
I'd think banks would be doing anything and everything they could to keep from having more homes in THEIR inventory than some cities have! You'd think, wouldn't you?
As I said before, the banks have the money....we are at their mercy! Sometimes they play, and sometimes they don't!
I won't put a Buyer eligible for the tax credit into a Short Sale. That's a recipe for an unhappy Buyer and an unhappy Broker!
Randy:
I have heard the same thing about Bank of America. But, until proven otherwise, I am going with the state of Missouri creed: show me.
Sally
Hey Thom,
Yea, this has been on my mind for the last couple of weeks. Especially with first time buyers who really need the 8000 to make things work. It is going to cause some headaches for sure.
Sally, I agree. I will try to stay clear of short sales as the deadline approaches. The time it takes is crazy. Plus first time buyers have enough stress on them they do not need the"wait" added....
Sally - Bank of America is the worst, dropping the ball every step of the way. This year, they implemented the REOTrans systems - they call it Equator - for tracking their short sale offers. It seems to help move the process along - as it shows when negotiators are overdue on their tasks. (slacking off!!) With the tax credit deadline in April, I can only imagine the banks will be overloaded.
Patty: So agree. I had hopepd for better. I have been working with them for several of my sellers. Yes, BOA will definitely be a warning buzzer for contracts in the tax credit season
Pat, we are all sweating that. Thnaks
I'm seeing buyers on several of my short sales refusing to stay the course, afraid they will lose out on the stimulus package.
Kay:
Buyers have a lot to lose. It is a major beth they are placing on short sale lenders ($8,000). I can see where most buyers would decide this is too risky for their taste.