San Antonio Move-Up Buyers And The First Time Home Buyer Tax Credit.

By rerockstar • November 9th, 2009

What to do now that the tax credit has arrived?

** UPDATE July 2, 2010 – Congress separated the first time home buyer tax credit and National Flood Insurance Program extensions from their original bill and passed them as H.R. 5623 and H.R. 5569 respectively. President Obama signed them into law on July 2, 2010. **

** Please note: the first time home buyer tax credit extension only applies to those who were already under contract as of April 30, 2010. **

As you’ve already read in “First Time Home Buyer Tax Credit – The New Extension And Expansion,” the new changes to the First Time Home Buyer Tax Credit allows for so-called “move-up” buyers to receive a tax credit of up to $6,500. So how does this affect you as a potential new move-up buyer in San Antonio. The idea seems simple. Take the house you’ve owned for at least five of the eight past years, sell it, and buy a new one (that doesn’t have to bigger or more expensive than your current one – you can actually downsize). File the appropriate forms (Form 5405 (pdf) and a “properly executed” HUD-1) with the IRS and receive a tax credit check in the mailbox. Simple. Right?

Well, here’s the problem. You have to sell your home. Although it’s possible you may be in the position to afford two mortgage payments, chances are, you’re not. Very few have that luxury and even when they do, I advise against it. Things can change very quickly in life and to get stuck with two payments you can’t afford is a big risk to take. So, let’s assume you don’t have that luxury.

We need to get that house sold. How’s the San Antonio market performing in terms of days on market (DOM)? If we don’t take a look at this, you could easily lose out on your chance of getting everything wrapped up in time to make the deadline for the extension of the First Time Home Buyer Tax Credit. Not only do you have to sell your house in time, but you have to buy one as well.

The San Antonio seller and average days on market.

Real Estate Market Chart by Altos Research www.altosresearch.com

As you can see, the average days on market for San Antonio is running at around 175 days. That’s about 5.8 months. Guess where that puts us if we listed your home today? May 3, 2010. Guess when the First Time Home Buyer Tax Credit expires? May 1, 2010 (you have to have put the home under contract on or before April 30, 2010). So, if you’re home follows the San Antonio average, you’re out of luck.

So what do you do?

First, make your decision that you want to go for this…and make it now. Don’t wait, as a few weeks could make all the difference between selling your home and not receiving the tax credit. Second, don’t despair completely over the chart I just showed you. You see, those are stats for all of San Antonio, we need to look at your area and not the city as a whole. For instance, San Antonio 78250 is running around 142.5 average days on market. To view your zip code’s data, check out the San Antonio Market Reports page on the site. Or just contact me and I’ll gladly run a full report for your area (with much more info than just days on market).

Armed with that data, we can begin to build a plan for the sale of your home. Although averages might be high, it doesn’t mean we can’t beat the average. That’s always the goal! Between simple steps to make your home shine to the right price to aggressive internet marketing, your home doesn’t have to sit on the market forever. During the time your home is on the market we’ll have a lot to accomplish as well. From getting you pre-approved for your next home to searching the San Antonio MLS for your next home, the work won’t stop. Plus, we’ll have to time when to actually begin searching for homes as we don’t want to start too early only to find a home that you fall in love with that we can’t make an offer on just yet (and watch it be bought by someone else). As well, once we have a contract on your home, we’ll have to deal with inspections, surveys, and getting all of our paperwork in line. Good thing that’s part of my job. I’ll keep it all on track and get us to our goals in the most efficient way possible.

It can be done, you just need to be prepared and have a San Antonio Realtor® on your side who’s ready to work hard and help you through the process. Have questions, just let me know.

photo courtesy of procsilas