Repeat buyers have limited window for $6500 tax credit

This past week our listings saw an average of 2 showings each.   I’ve been pleased that traffic has remained steady even though we are heading into the early part of the holiday season.

Recently I’ve been writing a lot about the first time buyer credit and now the new $6500 credit  for repeat buyers.   This new credit is available to repeat home buyers who have lived in their current primary residence for at least five years.   More details can be found on the IRS website.

The limitations are that you must be under contract by April 30, 2010 and closed by June 30, 2010.   At first glance, this seems like plenty of time for those buyers that are interested.   However, most repeat buyers that would qualify for the credit must sell their current residence first.   Considering that the market is still relatively slow, it could take a few months for those buyers to sell.   At a minimum,  a wise buyer should secure a contract  on their current home prior to signing a contract for their new home.   Additionally, the IRS rules say that buyers must sign a “binding” purchase contract by April 30th.   Therefore it is questionable whether or not they would allow a “contingent” contract, meaning that the buyers new purchase would be contingent on the sale of their current home.   The law is still fairly new, so we’ll have to wait on further clarification there.

The bottom line is that the $6500 credit is a great incentive for repeat buyers.   However, those looking to take advantage should act quickly.   Listing right after the first of the year and setting a very realistic, aggressive asking price would be a step in the right direction.   But the window of opportunity is limited so anyone interested in giving it a go would be wise to get the process moving immediately.

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