A sign promoting the $8,000 tax credit for first-time homebuyers is posted outside a home for sale. People are racing the clock to qualify, as Wednesday is the last day to close on a home and receive the credit.
A sign promoting the $8,000 tax credit for first-time homebuyers is posted outside a home for sale. People are racing the clock to qualify, as Wednesday is the last day to close on a home and receive the credit. Al Behrman/AP
Buying a house is almost always stressful. But the stakes are raised for people racing the clock to qualify for the federal homebuyer's tax credit. Wednesday is the last day for buyers to close on their purchase if they want to get the $8,000 credit.
But the National Association of Realtors says 180,000 people may not make it because of various delays.
"Everything is coming down to the wire," says Sara Dyson, who, along with her husband, Matt, was supposed to close on a townhome in Northern Virginia a month ago.
But the Dysons faced one delay after another. Now it's not clear whether they'll be able to close before the credit is set to expire at midnight.
On Tuesday, the House of Representatives overwhelmingly passed a bill that would extend the deadline to Sept. 30. It wouldn't extend the credit — just the closing date for buyers who already have a contract.
The Senate may vote on the extension Wednesday.
Lucien Salvant, a spokesman for the National Association of Realtors, says that when Congress expanded the tax credit last fall, everyone thought allowing 60 days for buyers to close was plenty of time. But they were wrong, he says.
"There were a lot of factors in there that we didn't think about," Salvant says. "A lot of the lenders are saying that their pipelines are filled right now. They just weren't staffed up to close so many loans on June 30 or just before it."
Add to that tightened lending standards and countless other things that could cause hiccups, and Salvant estimates 180,000 people who were expecting to get the tax credit could lose out.
"I think it's a tragedy," Salvant says. "This would sort of dash all their hopes and crush their dreams."
Tim Maruszak, 27, says he may have to back out of buying if he can't get the tax credit. When he made an offer on a four-bedroom house in Austin, Texas, in December, he could not have imagined he'd still be trying to close come summer.
The house is a short sale. He's buying it for less than the current owners owe. And that means a bank had to get involved.
"I was told that we were going to close by June 4," Maruszak says. "The bank came back and said that they will not meet that deadline, and they are not sure when they're going to close."
And all he can do is wait.
"I'm ready to close, my Realtor is ready to close, my mortgage company is ready to close," Maruszak says. "We're just waiting on a bank just to send the information over and say, 'OK, sign here.' And that's really kind of irritating because it's totally out of my control."
At his Washington, D.C., office, Todd Ewing, the founder of the Federal Title and Escrow Co., guides a couple through the closing process. He passes them document after document to sign. Ewing says he'll be doing a lot of that Wednesday.
"Basically, we are triple-booked on the hour every hour starting at 9," Ewing says.
He has 19 people on the schedule for Wednesday who are all rushing to close before the credit expires. And, Ewing says, there are many more waiting for their paperwork to come through.
"If all those 15 or so get on the calendar, in addition to the ones we have, we're all going to be here until midnight," he says. "And for those who don't make the calendar, there will be some tears shed."
That is, unless Congress steps in and votes to extend the deadline.