Thanksgiving Holiday May Cause Problems for First-Time-Buyer Tax Credit

September 4, 2009

Finance

The first-time-buyer tax credit of $8,000 is scheduled to end effective December 1st, 2009, however the transaction must close by November 30th, 2009. This will impact both real estate agents and first time buyers. Realtors® and buyers may not realize the month of November is notoriously slow for underwriting as many companies are working at a very reduced staff due to vacation wrapped around the Thanksgiving holiday.

Chaos Likely on November 30th in Closings Around the Country

Are you going to be stuck in a long line on Nov. 30th, worrying if your close will happen?

Are you going to be stuck in a long line on Nov. 30th, worrying if your close will happen?

It is also important to remember that Noverber 30th is a Monday, and right after the Thanksgiving holiday weekend. Like many businesses, banks and title companies often have reduced staff and early closing times. This will absolutely have an effect on the dates that agents should have their buyers go into contract. In fact, many people take the week of Thanksgiving off and this will have a major impact at the lenders. The volume is currently picking up on refinances, which will also have an effect on underwriting times.  For your clients that are in the first-time-buyer category, here are a few important dates and facts:

  • November 25th (Wednesday) ? Most banks and title companies will be at a reduced staff and may also close early.
  • November 26th (Thursday) ? Thanksgiving everything will be closed.
  • November 27th (Friday) ? Many banks and title companies will have reduced staff, and may be closed.
  • November 28th (Saturday) ? Most banks will be at a half day or closed.
  • November 29th (Sunday) ? Everything will be closed.
  • November 30th (Monday) ? Last day for first time buyers to close (can you imagine the chaos at title companies?)

Real Estate Agents Must Lead & Buyers Must Be Educated

Everyone involved in transactions should understand they should be under contract no later than October 15th (not November 15). Agents would be advised to show the timetable above so first-time buyers understand the issues. Agents should make  sure their clients are pre-approved, even if the property address is not determined as of yet; approved buyers can save up to ten business days. FHA loans typically take longer to complete, so keep that in mind if working with clients who are securing FHA loans. Encourage your clients to have their files submitted to underwriting to be approved for income, credit, and assets. The final step is the property, which can be sent in after the first portion of underwriting is complete.

The sooner your first-time buyer goes into contract, the less stress on everyone. I wrote this post as a direct result of my client who is a first-time buyer; she explained to me that she anticipated going under contract the first week of November and closing before the deadline. This got me to thinking, is that a good strategy for my client? After discussing the above she quickly realized securing a property by mid October would be the best scenario.

We would like to thank Daniel Rothamel for sharing today’s photo via the Creative Common’s License.
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About Chris DePaepe

Chris is a lifelong Chicagoan who was born and raised on the Northwest side. She has a business degree from Rosary College in River Forest and a MBA in finance from DePaul University. She has been in the mortgage industry since July of 1996 and understands the importance of educating clients about the process of purchasing or refinancing a home. Chris?s education and customer service separates her from her competition, from taking an application at 11 p.m. to doing a closing in the convenience of your home, customer service is her #1 priority! With her extensive financial education she is able to pass along critical information to potential clients about mortgage interest and the differences between a 30, 25, 20 and 15 year loan. Chris will run every amortization chart and spend a great deal of time explaining the savings on your mortgage interest by showing actual examples. Also, most first time buyers do not understand the tax advantage of owning a home and she will break that down and show the actual tax advantage of owning a home versus renting. Chris prides herself on taking the time to fully educate every buyer so they are aware of the process from the beginning to the end without any surprises. Whether you are looking to refinance or purchase a home, understanding today?s market is extremely important to getting your loan approved. You can contact Chris 24/7 at chrisd@aandnmortgage.com, 773-305-7016, or 773-848-4144.

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