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SALT LAKE CITY -- The countdown is on. This is the last week to take advantage of the $8,000 tax credit for first-time home buyers, and both buyers and agents are feeling the pressure.
More than 21,670 Utahns already have collected $161,409,356 in First-Time Homebuyer Credits. -IRS
If you've been thinking of buying a home, you're a first-time buyer and you can qualify for financing, this is a great time to do it.
But you may have to sacrifice going after a short sale or you may miss out.
Buying your first home is a big investment, and Scott Coleman wanted to make sure he was taking advantage of every incentive he could. The $8,000 tax credit was enough to convince he and his wife to take the plunge.
"We've been renting for a few years, and there was a little incentive with the tax credit," Coleman said.
He's not alone. According to the Salt Lake Board of Realtors, nearly every ZIP Code in Salt Lake County saw single-family home sales increase in the first quarter compared to the same quarter last year.
Realtor Home Sales along the Wasatch Front
1Q 2009 | 1Q 2010 | % change | |
---|---|---|---|
Homes/condos sold | 4,445 | 5,292 | +19% |
Median Price | $205,500 | $193,097 | -6% |
Midvale and Salt Lake City's west side saw the greatest changes, with 72.7 percent and 122.2 percent increases respectively.
The price of homes dropped 8.8 percent during the first quarter, from $238,000 to $217,000.
The Colemans thought they were saving money by shopping for short sales, but they soon learned if they wanted the tax credit, a short sale wasn't the way to go.
"There wasn't a lot of communication between us and the banks, and so that's when we kind of had to refine our search," Scott Coleman said.
Jeremy Leger with Elite Realty Group says short sales can take months.
"There's a lot of people right now who are trying to get a hold of this tax credit, get that extra $8,000, and they're going to miss the opportunity a lot of them ‘cause they're waiting on the short sale," he said.
If you're hoping for a short sale and haven't closed by now, Leger says chances are it's not going to happen by April 30, the deadline for the tax credit.
Through mid-February, nearly 1.8 million Americans had filed returns to collect $12.6 billion in tax credits for homes that they purchased in 2008 and 2009. -IRS
"If the $8,000 is an important aspect of the purchase for you, then you should be looking for a different home," he said.
Coleman says backing away from short sales paid off. He got the credit and now has his first home.
"It was a big help," Coleman said. "Help on our down payment, helped get us some things that we also needed, yeah, so it was a big blessing to receive that $8,000."
The problem with a short sale is that if you're under contract and don't have third-party approval by the end of this week, there's no guarantee that you'll get that approval and be able to close on the house by June 30, which is the closing date deadline.
In that case, you'll be out the credit when you could have received it purchasing another home.
E-mail: jstagg@ksl.com