10-08-2009 10:32 PM - last edited on 10-19-2009 02:51 PM by Matt
The problem is getting compounded as frustrated short sale buyers are starting to jump out of their transactions into shorter escrow foreclosure properties in order to get the $8,000 credit. It’s almost like a game of chicken for the $8,000 first time home buyer credit. Buyers don’t want to wait too long, but if they jump ship early someone else could swoop in and steal their spot in line. What’s been happening and which will likely increase in the next month are short sale buyers that put multiple offers in on properties....Brentwood Real Estate News
10-08-2009 11:52 PM
Well, if the government plans to extend the tax credit, I think now is the time to announce it. Otherwise, we're going to have 6-7 weeks of chaos between now and Nov. 30th! Of course, this tax credit is probably without precedent, so maybe the government didn't anticipate all of the issues during the transition.
I think the best solution is to have a phase-out period. For example, the maximum tax credit drops by $1000 each month starting in December for the next 8 months. Or, if they want to phase it out faster, $2000 each month for 4 months. I would think the phase-out approach would be the least disruptive to the market.
10-09-2009 09:58 AM
I like the idea of a fade out... I also like the idea of an extension based only upon transactions that are currently pending. This way both distressed home sellers and short sale buyers have incentives to stick with their contracts or hurry up and get their homes listed.
The short sale banks wouldn't be able to adjust prices because they wouldn't know who is getting the rebate. If the government's end goal is more home sells than improving the short sale process is definitely the way to go.
Why are short sale banks so backed up? because everyone is jumping around from one transaction to the next.
In other news congress just approved an extension for service members who have 3 months of overseas duty in 2009 yesterday.