Can you sell your house in time?You'll have to close on your new home by June 30, 2010, although those in the military get an extra year. Because you certainly don't want to be carrying two mortgages at once, a lot hinges on how fast you can sell your current home. Again, that depends a great deal on where you live.
"There are some (areas) where the lower-priced homes in the market have started to see multiple offers again," says Mark Foreman, 2009 liaison for the NAR's law and policy group. "So if you are selling a house that's in the entry level that's attractive to homebuyers and is priced right according to the market, the likelihood of you getting that property sold sooner is pretty good."
Marc Henn, president of Harvest Financial Advisors LLC, in West Chester, Ohio, says sellers who have a house that is unique to their area will probably have the greatest advantage when it comes to selling quickly.
"Let's say it's the middle of a subdivision but has a small woods behind it, while the other houses don't," Henn says.
Take a look at the recent history of how long it takes to get a "sold" sign up in front of other homes near you.
"If you put your house on the market now, and the average time on the market in your area is 90 to 120 days, you should be OK. But you just want to make sure that you pay attention to that," Foreman says.
Can you close the expense gap?While the tax credit can help offset expenses like home repairs and the seller's commission, $6,500 will only stretch so far. If you are upgrading, you need to make sure you have enough equity and available cash to cover the down payment, Henn says.
Saulnier warns that if you're counting on the tax credit to cushion the higher mortgage cost of your new home, that's a red flag.
"In this economy, if they lose their job, the increased mortgage payments could throw them under," Saulnier says.
While the tax credit can be a financial boost to many homeowners who are ready to buy again, Saulnier insists that the purchase of a home should never be a tax-based decision.
"This $6,500 is just the cherry on the sundae," he says. "The sundae itself is the historically low home prices, substantially low interest rates (and) sellers willing to bargain."
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