If you wrote a contract on a home before April 30 and hope to claim a homebuyer tax credit, your work has just begun.
That's because you only have a few weeks -- until June 30 -- to close on the home if you want to snatch a credit of up to $8,000 (for first-time buyers) or up to $6,500 (for "move-up" buyers).
A delayed closing -- whether due to an unexpected problem with the mortgage loan, a lien, a low appraisal or another factor -- could mean losing out on the tax credit.
"No one wants to wait too long to close on their home, but sometimes problems occur," says Christina Holmes, a real estate broker in Chattanooga, Tenn. "It's best to resolve the issues sooner rather than later, so the transaction can be completed."
Here are four tips from real estate pros on how to anticipate problems, work to correct them and complete the sale quickly:
1. Schedule an early closing
Set the closing date a few weeks ahead of any deadlines you may have, Holmes says. Buyers trying to purchase a home by June 30 should set the closing date for mid-June or earlier, she says."When you pick a date that's a few weeks earlier than necessary, you're still OK if something happens and you have to extend the deadline," she says. "Also, try to pick an odd day of the week, maybe the middle of the week, when everyone is not as rushed."
If buyers and sellers wait until the last Friday at the end of the month to close, they may have to wait for title companies and lenders who are swamped with other homeowner paperwork, increasing the chance that a mistake will be made, she says.
2. Clear the title quickly
In order to close the transaction, the buyer's (or seller's) real estate attorney will likely order a title report and conduct a title analysis, says Neil Garfinkel, a real estate attorney and partner with Abrams Garfinkel Margolis Bergson LLP in New York.Make sure the title is ordered promptly, he says.
If the attorney finds that there's an outstanding lien on the property, it would have to be cleared before the transaction could close. (A lien or encumbrance is a claim on the property that gives a debtor the right to be paid whenever that property is sold.)
"Assure that you can clear a problem in the time frame needed by ordering the title report upfront, right after (signing) the contract. It gives everyone lots of time to avoid surprises," Garfinkel says.
A buyer may also order a survey of the home's property lines. If it's determined that there is an encroachment -- a neighbor's barn was built over the owner's property line, for example -- the issue will need to be resolved, Garfinkel says.