What does the tax credit extension mean?

I stood my ground on an earlier blog titled Will the Tax Credit be extended again?  In that posting I knew that a second “home buying” extension would not be granted past April 30, 2010 and I was correct.  What this newly passed legislation (today June 16, 2010) means is that if your home has a binding contract on or before April 30 you can now close up to September 30 to obtain your tax credit.

Kudos to the Senator Issakson (former Realtor) who saw the nightmares we were experiencing out in the field.  There was such a rush in the spring to take advantage of the tax credit that many buyers and Real Estate Agents took advantage of the great deals on distressed properties like foreclosures and short sales.  What we all found out is that the same approval timeframes we were accustomed to pre-tax rush (such as Wells Fargo short sale approvals coming in under 45 days) did not necessarily apply this Spring and Summer.  Actual numbers won’t be out for months but I have a very strong feeling that the already overwhelmed departments of distressed lenders found themselves devastated once the avalanche of offers came pouring through in 2010.  For the past few weeks buyers and agents have been scrambling, stressing over the impending deadline and thanks to a few Senators, we have a little breathing room to continue working towards our goal.

So if you have a contract on a short sale, foreclosure, new construction or resale that went binding on or before April 30, take a breath a relax.  You now have until September 30, 2010 to close on the home to receive your tax credit.