The Federal Tax Credit Deadline Has Passed--------NOW WHAT???

Now that April 30th is here and gone it alleviates any questions (so far) if the tax credit will be extended. I personally think that it will be re-introduced after the housing numbers are out detailing the inevitable increase in homebuying and hopefully a slight stabilization if not slight increase in home sales. While April 30th was the deadline to be under contract, June 30th is the deadline to close to be eligible. I hope that an amendment to the program is added to include ANYONE who closed before June 30th.

To agents and to actively seeking homebuyer's credit, it was NOT the ideal market to make a deadline in. From the high number of buyers using FHA and the low number of FHA eligible homes it cause bidding wars that I haven't seen since 2006. Also with the high number of foreclosure and short sale properties, forcing a bank to understand the need to expedite the negotiation process in order to get binding contracts in time was almost futile in every way. I started April with 10 buyers 8 of which were eligible for the tax credit. Seven went under contract in time (two were ON the 30th!) After gaining more buyers, through referrals, I now start May with 10 buyers again with 4 who were unable to secure a property in time.

The market I anticipate this month is going to be more of the same. I think less than 5% of buyers who were actively looking will stop looking because of the expiration of the tax credit. Once people are emotionally invested, money becomes less of a motivator. I think that sellers will take note and still remain motivated to sell. Banks may begin to see the importance of sprucing up these foreclosures a bit to expedite the sale. I also think a positive result of the bidding wars will be better comps (comparable properties used in appraisals) to help increase property values. Which EVERYONE will be happy about.