With the April 30th expiration of the home buyer tax credit, it’s time for buyers, Austin sellers and Austin Realtors to figure out what happens next. Austin Sellers who didn’t get offers might wonder, “are the buyers all gone now?” Austin Buyers who didn’t get their act together and claim the tax credit might wonder, “did I miss the boat?” Realtors in Austin are wondering if business might dry up as the market takes a breather while the hangover wears off. Here’s what I think.
Many Austin Sellers in the sub-$250K price ranges placed homes on the market earlier this year, sooner than they otherwise would have, hoping of course to catch the wave of tax credit buyers. This is something we encouraged, and rightly so, as many of these homes did in fact sell. These “timing opportunist” sellers include both motivated sellers and fair weather “let’s see what happens” sellers.
The latter group of sellers with unsold homes will start removing homes from the market fairly quickly as they’re already experiencing the early stages of “seller fatigue”, and might now feel discouraged. They don’t really have to sell anyway, but would have if the right offer had come along. It just didn’t happen. If I’m right about this, the May real estate market stats for Austin will show a spike in Expired/Withdrawn listings.
The $8,000 First-Time Home Buyer Tax Credit will end April 30th. By “end”, I mean Friday April 30 is the last day to write a contract that qualifies. The transaction must also close by June 30th, which should be plenty of time.
But an interesting thing will start happening May 1st, 2010. Buyers who miss the April 30th deadline to be under contract might wonder if the purchase contract can just be back-dated for April 30th, 2010, thus allowing them to still claim the $8,000 tax credit. In Texas, the “Effective Date” of the contract is written in by the agent after that last signature or initial has been placed on the contract. That’s the official contract date, and the date from which all time related matters are counted. It reflects the date the transaction becomes a “done deal”.
So, here is a potential scenario, just for discussion purposes.
Let’s say on Saturday May 1, 2010, we receive an offer for one of our listings. It’s a full price offer, clean, ready for the seller to sign, and is accompanied by a pre-approval letter. And let’s say this hypothetical offer includes a note from the Buyer Agent stating, “Meant to get this to you last night. I assume the seller will sign as-is so I went ahead and filled in the Effective Date April 30th, 2010 so the buyer won’t miss out on his tax credit”.
Can we do this?
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