With the Nov. 30 deadline for closing a home purchase in time to claim the first-time homebuyer tax credit fast approaching, the $8,000 question has become: what’s the last possible date to find a home, make an offer, and begin the closing process?
In a recent appearance on NBC’s "Today" show, Barbara Corcoran — former owner of the New York City brokerage The Corcoran Group — raised a few eyebrows when she suggested that it would take a "miracle" to start the process now and still beat the deadline.
Real estate agent Jessica Riffle of Coldwell Banker Sea Coast in Wilmington, N.C., took issue with the suggestion, saying most loans in her market are closing in 30-45 days. AllDAY, the official blog of the "Today" show, invited Riffle to make her case in a video, which NBC posted on Wednesday.
In a segment that ran Tuesday, Corcoran — a regular "Today" show contributor — didn’t rule out the possibility of beating the deadline, and said it’s almost certain Congress will extend the tax credit.
If "you believe in miracles" and find a "really good foreclosure where the bank has sweaty palms, yes, it’s not too late," Corcoran said.
"But for the most part, it’s impractical" to try to beat the deadline, she said, because banks don’t lend money so readily and most home sales now take 60 to 90 days to close.
If a homebuyer were to find a house this weekend, "chances are very very good that you wouldn’t get the tax credit," Corcoran said.
"To me, that’s kind of like saying you’re too late to get the tax credit," Riffle responded in her video. "I just want to say that in North Carolina and in a lot of other areas in the country, you’re not too late."
Coldwell Banker publicized Riffle’s video in an internal e-mail, and a number of agents responded on the "Today" show blog.
"Way to go Jessica!" said one response. "I too heard the segment … and thought to myself, ‘That is just not the case here in Texas.’ "
Corcoran also warned prospective homebuyers against racing to beat the deadline.
"It’s ridiculous to try to rush it, because you wind up being a bad negotiator when you’re in a rush, and you don’t find the right house," she said. Besides, Corcoran said, a dozen bills have been introduced in Congress to extend the deadline.
Every lawmaker "wants to tie their name onto this very popular bill, so I fully expect this will be extended," Corcoran said.
One bill introduced earlier this year by Sen. Johnny Isakson, R-Ga., S 1230, would nearly double the tax credit’s ceiling to $15,000, and expand the pool of those eligible to claim it by lifting first-time homebuyer and income restrictions. The Congressional Budget Office estimated the cost of a similar bill introduced by Isakson last year at $34.2 billion.
Isakson, a former real estate broker and industry advocate, has since gotten behind a more modest compromise bill, S 1678, that would extend the existing tax credit to June 1, 2010.
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