Home buyers planning to take advantage of the $8,000 First Time Buyers Tax Credit, may think they have some time to buy a home since the program is effective until Dec 1, 2009. In reality, you need to be in contract by the end of Sept in order to BE ASSURED of closing by Nov 30. Some agents are saying buyers need to be in-contract by Oct 15 but I think that’s cutting it too close and doesn’t allow for any “WHOOPS!
Working backward from the closing date, here’s my thoughts on timing …
- Nov 30 – a Monday: The absolute last day when the home MUST be closed, title transferred, mortgage funded & wire receipts received. Waiting to close on this date means that absolutely NOTHING can go wrong! Now, there will be people who wait till the last minute, so consider how busy the title companies will be. Maybe you’ll get in their schedule and maybe you won’t.
- Nov 23-25 (Mon-Wed): Closing on these dates should be a much safer option as some “slop” factor is built-in, however, remember that is Thanksgiving week so title companies may not work on the 27th.
- Nov 16 (Mon): The new MDIA rules requires that lenders must submit the final closing costs to the buyer for review 7 days in advance of closing. This means the loan needs final underwriting approval and all HUD-required forms be completed by Nov 13 so they’re ready to give to the buyer on the 16th.
- Oct 14 (Wed): Lenders are wanting 30-days once the go-ahead is given to order an appraisal. Underwriting can’t occur until the appraisal is received and hopefully is at or above the purchase price. Since appraisers and underwriters are going to very busy with all the last minute requests, that 30-day may be extended to 45-days, as some lenders are already requesting.
- Oct 12 (Mon): The inspection contingency portion of the Purchase Contract should be removed so the buyer can advise their lender to proceed with ordering the appraisal.
- Sept 28 (Mon): The buyer should be in-contract on a home, ready to have their home inspections scheduled.
Between now and Sept 28, the buyer will be meeting with their selected lender, obtaining & providing the required paperwork to become pre-approved for a mortgage, so they know what price of home they can shop for. They should also be selecting and meeting with a Realtor® concurrently with selecting a lender. Most likely the lender will be able to give a “first blush” idea of the home price with a pre-qualification. That information can be used with the Realtor® to begin searching the MLS system for homes meeting the buyer’s criteria with the “expected” price range.
Depending on how much free time the buyer has available from their work schedule to view homes, the buyer should be starting this process in the next few days. Give me a call to get started. YOUR TIME IS UP!
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