Here is something I learned the other day.
People are running from short sales afraid they will not meet the April 30, 2010 deadline. But, there is a misconception out there.
When a Purchase Agreement (PA) for short sale is signed by both the buyer and seller (the owner of the home) the PA is considered a binding contract and a final acceptance date is usually written in.
The following is a question was posed to the Minnesota association of Realtors (MNAR) and according to Heidi Peterson, In-House Legal Counsel and Vice President of Risk Management for MNAR the following answer was given:
Q. My buyer has submitted an offer on a property and the seller has now accepted. The property is a short sale, so the bank still needs to approve the Purchase Agreement before we can close. Does this need to happen before the April deadline to qualify for the first time homebuyers tax credit?
A. A buyer may qualify for the homebuyer tax credit as long as the Purchase Agreement is signed by both parties and delivered to both parties by April 30th, 2010. This will be the case even if the Purchase Agreement contains contingencies. However, the parties will need to close by July 1, 2010 in order for such tax credit to be effective.
What does this mean to you?
If you have a signed PA agreement on a short sale by both buyer and current seller (not neccessarily the bank) as long as you close by June 30, 2010 you may still qualify for the tax credit! Yeah!
Good news? I say yes…a short sale can take up to 120 or more days to process and a few more months means a whole heck of a lot in the world of shorts!
Of Course, we always recommend that you check with your tax preparer for more details, further clarification and information.
Now get out there and buy….
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