Time is running short to get a home purchase through the escrow process and closed before the first-time homebuyers $8,000 tax credit deadline, scheduled for Nov. 30.
For those who are still unaware of the federal tax credit, first-time buyers can purchase a home this year and receive a tax credit for 10 percent of the purchase price, up to $8,000.
Those who have owned a home in the past three years aren't eligible. Buyers also have to meet eligibility requirements regarding income; the current credit begins to phase out for singles who make more than $75,000 and couples who make more than $150,000.
Some mortgage brokers are recommending that first-time buyers close no later than the third week in November to ensure that no holiday-related schedules slow down the escrow process. The National Association of Realtors recommends going into escrow no later than Oct. 2. The Realtors group reports that it's "taking about two months to complete a home sale in the current market, as lenders scrutinize borrower paperwork and issues with appraisals pop up."
For buyers who don't make the deadline, there is a chance the credit will be extended.
"There are at least 20 bills drafted regarding the credit; one-third of them have been introduced recently," said Lucien Salvant, managing director of public affairs for NAR. Some proposals would not only extend the first-time buyer credit into next year, but would also expand it to include all home buyers, remove income restrictions and raise the maximum amount of the credit, up to $15,000.
"By including all buyers, there could be more of a ripple effect as more Americans spend money on moving vans, lawn equipment - any items or services associated with making a move," said Jerry Howard, president and CEO of the National Association of Home Builders.
NAHB and NAR have been lobbying heavily for the extension.
"The first priority is going to be to renew the $8,000 credit, but we have some good arguments for expanding it," said Jerry Giovaniello, senior vice president and chief lobbyist for NAR. He argues that the credit doesn't cost much but has a huge impact.
Yet with Congress currently focusing on other issues, and concerns about the country's rising deficit, some wonder how difficult it will be for housing to garner attention anytime soon.
"All eyes are on health care," said Bruce Hahn, president of the American Homeowners Grassroots Alliance.
According to Realty Executives broker Valerie Black, "If you're a first-time buyer, waiting for the extension may work against you. Right now you have an $8,000 tax credit, nothing is guaranteed after that."
According to Janet Willson of Nevada Property Mortgage, you should begin the pre-qualification for your home loan now. Potential buyers should do all they can to ensure a smooth mortgage process by gathering current paystubs, bank statement, W-2's and all other documents necessary to start the loan process.
"There are a variety of assistance programs available for 100 percent financing," Willson said. "While your loan is in process, don't buy large purchases on your credit cards adding to debt, and don't make any major changes, ie: job, until your home purchase is complete."
• Sheri Wilson is a real estate agent with Realty Executives.