Homebuyer Tax Credit Update 7/1/2006 Passed both The House and The Senate, so pretty much a done deal. Should be signed into Law by the President today.
********
NEW UPDATE 6-29 – Looks like this is going to pass as a stand alone Bill. Passed the house by a huge majority and the Senate is expected to pass it any day now…stay tuned

*******

UPDATE 6-25 The Bill did not pass. The vote was 57-41, three short of the 60 needed.

********

Just received this email. Seems to be “Breaking News”:

“NEWS FLASH Senate OKs new tax credit closing deadlineThe Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit. Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.”

All of my June 30 or before closings are closed, but I do have one we did not expect to be eligible for the tax credit, because it is a home being built which is not expected to be completed until August 31 or so.

If the closing date requirement is moved out to September 30, as noted in the quote, my clients will be eligible for the $6,500 credit (not the $8,000 one). Since we were at the showroom yesterday morning trying to decide on wood floors in the living room and dining room, which would cost less than this credit, this could be an important decision making factor.

Of course this is so “hot off the presses” that we need to verify and also wait for it to actually be confirmed and signed. But it looks like an extension to September 30 for closing is just about a given…just about.

This is not legal advice. For legal advice, consult an attorney, not a blog.

It appears that the number of foreclosures in the area will continue at a high rate into the foreseeable future. Thus, there will be more and more bank-owned homes for buyers to consider. But from the perspective of an average buyer, is that a good idea?

In my experience, and from my perspective as a lawyer, the answer is an emphatic, “No!” Banks tend to be far more concerned with protecting themselves without regard for actually selling the property. Their required addendums — no changes allowed! — severely restrict the buyer’s remedies if the deal blows up, or if the house is a complete lemon, or even if the buyer’s financing fails. Banks tend to be remarkably inflexible in regards to negotiations. Indeed, they often refuse to sign ANYTHING until it has been signed by the buyer, even when it is their own addendum! Thus, negotiations are difficult, and the resulting contract is weighted heavily in the seller’s favor. Banks impose unreasonable requirements, such as mandating a photocopy of a cashier’s check of the earnest money, rather than just a personal check. As a result of the required contractual terms and the bank’s inflexibility, if the deal gets squirrely the buyer runs a very real risk of losing her earnest money.

Is this true of all banks, in all transactions? Almost certainly not. It has been, however, my experience to date. Are some banks more reasonable than others in this regard? Very probably, but I’ve only come across the difficult ones.

In fact, if you’re thinking of making an offer on a property managed and sold via First American REO Servicing — well, proceed at your own peril. Based on my experience, as well as the experience of others, First American is remarkably difficult to deal with and its actions can be, quite simply, irrational.

I recently assisted a client in attempting to purchase a house from a bank where First American was acting for the seller. I could author a dozen posts about this very unpleasant experience, but who has that kind of time? Instead, I will simply give two examples. When I received the bank addendum, the box for “cash sale” was checked, as was the box for “buyer financing.” Clearly this was an error, as these two boxes were inconsistent. The listing agent agreed that this appeared to be an error. I was concerned about this ambiguity in the contract (like any other competent attorney). I assumed it would be an easy fix. I was, needless to say, wrong. The bank flat-out refused to correct this error and demanded that the contract proceed with these mutually inconsistent terms.

Once under contract, my FHA buyer proceeded to seek financing. Unfortunately, a previous buyer about four months earlier had also sought FHA financing, so an appraisal had been performed. Per FHA rules, another appraisal cannot be obtained within six months of the first. We received essentially no information about this prior buyer or lender, and nobody was able to find this prior appraisal. Eventually, we had to seek a new FHA file number for the property, which would in turn allow for a new appraisal. Of course, all of this took time and naturally required an extension of the closing date. Did the bank agree to a short extension? Of course not. Huh? Ready, willing, and able buyer (who had invested significant time and money into the property) who had a good faith reason for seeking an extension — but the bank did not budge. The deal collapsed as a result, and my client’s earnest money is now hotly contested.

One would think that banks would be anxious to sell these assets. One would think that they would work cooperatively with buyers. One would think that banks would act reasonably and rationally. One would be wrong. In my experience, banks — or at least the individuals sitting at desks in distant states who are responsible for these files — are unreasonable and, in at least one instance, may even be irrational. Proceed with an offer at your peril.

Today is my 20th Anniversary as a Real Estate Agent. Seemed like a milestone worth noting.

Still had my original photo taken back in 1990, so I thought I’d share it with you…yes back before cell phones. 🙂

My grandchildren are pretty much the same age as my children were back then. We didn’t use email…we didn’t even use faxes…and the mls was DOS with the only pictures available via the mls “book”.

We’ve come a long way, baby!

My “cell” phone in 1990 had a cord too.