Short-Sale Buyers Benefit From Homebuyer Credit Extension

On Friday, July 2, President Barack Obama signed into law a three-month extension of the
Homebuyer Tax Credit. The extension was expected, especially considering the backlog of
approved contracts sitting at many lenders' offices.
However, this extension is great news for those awaiting lender approval on short sales.
For those who are unfamiliar with the term, a short sale is a popular method of selling a home
whereby the lender agrees to take less than the homebuyer owes on the mortgage in order to
sell the property and clear title. The deadline for an approved contract under the tax credit was
April 30, after which the parties had until June 30 to close the deal. However, anyone familiar
with the short sale process is well aware that a 60-day window on a short sale is way too
optimistic.
So now parties have until Sept. 30 to close, which means the short sale window is about five months. It's still a small window, but it opens up the possibility of a tax credit to many who never even expected to get one.
For instance, we have many short sale clients who had very little intention of falling within the tax-credit window, who now are the beneficiaries of up to $8,000 in tax benefits. On the other side, there were clients who barely met the June 30 deadline after much angst and hours upon hours of negotiation and effort.
Like the French poet Jean de La Fontaine said, "Patience and time do more than strength or passion." Those are words to live by in today's real estate marketplace.

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