Realtors react to tax credit extensionWritten by Kristen Criswell | | firstname.lastname@example.org
President Obama signed a three-month deadline extension of the homebuyers tax credit July 2.
The law allows individuals, who were in the process of purchasing a home before April 30, a closing deadline extension. Originally, the homebuyers had to close by June 30 to qualify for the homebuyers tax credit, but the extension now requires all closures to be completed by Sept. 30.
The number of houses in contract on or before April 30 caused delays and back-ups with paperwork and loans that prevented many homes from closing by June 30, said Ed Sitter, president elect of the Toledo Board of Realtors.
In the Toledo area, the extension prevents approximately 100 homes from falling out of their contracts and starting over, Sitter said.
“The tax credit gave buyers the incentive to by and helped them determine the price they wanted to pay for their house. They had it in the back of their minds how much they’d get back with the tax credit,” Sitter said. “ Home owners could afford to take less knowing they’d get he other tax credit on their new home.”
Additionally, Obama signed the National Flood Insurance Program Extension Act of 2010 on July 2.
The law reauthorizes and retroactively authorizes the Federal Emergency Agency (FEMA) to enter into new flood insurance contracts until Sept. 30.
Homebuyers that are purchasing a house on a flood plain are required to have flood insurance, Sitter said. FEMA recently redrew flood maps in the area increasing the areas that fall into the flood zones, he said.
“If you are going to buy a house and fall within a flood zone, you are required to have flood insurance. The lenders require it because the government requires it of them through regulations,” Sitter said. “ If the government didn’t provide insurance to the market those houses would be kept unaffordable.”
Realtors across the country are petitioning the government to come up with long-term legislation to address the problem, Sitter said. The current extension is just a “sigh of relief” until it comes time to renew the legislation again.