You have less time than you think to cash in on the federal home buyer tax credit.
Unless legislation extends the deal, you'll have to close escrow by Nov. 30 to take advantage of the maximum $8,000 tax credit available for first time home buyers.
But given the 30 to 45 days -- or longer -- it takes to close escrow -- especially on some distressed properties -- you can't wait until Nov. 30 to buy a home.
"You can't be casual about this right now. You have to on it. Committed, very serious, with lots of time available," said Jean Manner Schwimmer, a real estate agent with Coldwell Banker Gay Dales in Salinas area.
The federal tax credit for 2009 is only for first-time home buyers -- people who've had no ownership interest in a home in the three years prior to the purchase. Single and head of household tax payers can earn no more than $75,000. There's a $150,000 ceiling for married couples filing a joint return.
A tax credit is a big deal because, unlike a tax deduction which reduces your taxable income, a tax credit reduces the taxes you owe, dollar-for-dollar.
This home buyer tax credit can also net you a rebate if the credit is more than the taxes you owe. The rebate is the difference. If you owe no taxes, your rebate can be a maximum $8,000.
It's also a big deal because it's spurred home sales and that's helped boost the economy.
The California Association of Realtors says nearly 40 percent of first-time home buyers credit the tax credit with prompting them to buy a home this year.
(California's own tax credit is already over budget.)
To cash in on the credit you should already have signed a contract and be in escrow now or on the verge of doing so any day now.
While buyers should never rush into the decision to buy a home, if the tax credit is a motivating factor, there is a deadline.
"You need to be pre-approved for a mortgage. We are down to just two months and its hard to get an escrow in less than 30 days," said Stephen R. Pearson, a real estate agent with Century 21 Classic Properties in Watsonville.
Pre-approval gives buyers an edge in a market that includes investors looking for bargains. A pre-approved mortgage gives the holder proof he or she has money in the pipeline to actually buy a home.
Kim DiBenedetto, president of the Monterey County Association of Realtors says, given that many properties are distressed properties buyers should be working with both a local real estate agent, mortgage broker or loan officer and title and escrow company familiar with the details of the fractured housing market.
She said FHA loans, for example, come with more requirements mandating that the home is in good condition.
"Make sure the utilities are on. I had a listing go into escrow and the utilities were on. By the time the inspection was due the owner had let the bills go and the utilities weren't on. That costs time. One day can make a huge difference," said DiBenedetto, also a real estate agent with Coldwell Banker Del Monte Realty in Carmel.
With fall comes travel bargain rates but don't take a vacation just yet. Stay available for escrow details that can crop up in a moment's notice.
Serious buyers need to be flexible with what they want in a home and have their nose to the listings to be ready to pounce when the right property comes along.
"Your really need to be Johnny-on-the-spot when listings come up. The internet makes this easy, but you have to be available and watching," said Pearson.
Those already under contract, likewise, should be imminently available.
"If you are in escrow, be involved and aware of the time frame element. Deadlines are my responsibility and if we are approaching some contingency I'm going to inform the client," said Schwimmer.