How to lose your $8000 tax credit

As most working Real Estate Professional will tell you now a days, the rush is on to collect the government tax credit. Just as cash for clunkers had lit fires under the feet of potential car buyers, the same is true in the real estate industry.

First time home buyers are trying to collect their just rewards, and many know that the property must close escrow by November 30, 2009 to qualify. End of November seems like a long time off, but here is some food for thought because I don’t want you to lose out on technicalities.

Let’s consider that November 26 is Thanksgiving this year. Let’s admit it, most of us are procrastinators, so we will push the envelope and wait until the last moment to get in the door. Case in point, look at the lines at the post office at 11:30 PM on April 15 of each year.


The number of people trying to close escrow on November 30 will be overwhelming and it is also a Monday. But here is an insider tip in Real Estate: avoid closing escrow on Mondays and Friday because government employees at the County Recorders Office have higher rates of absenteeism on Mondays and Fridays, so the office will be under-staffed and the likelihood of your deed not recording on those particular days increase dramatically.


As Thanksgiving is on November 26 this year, we can pretty much eliminate all of that week, meaning November 23 through 27. But remember, we will have probably hundreds, if not thousands, of people trying to get their $8,000, so the County Recorders Office will be overwhelmed compared to normal number of closings, but given the current budget crisis in California, I doubt your County will hire extra staff or provide over time to handle the extra influx of closings. I could be wrong, but do you want to make an $8,000 bet on that? This is a government credit program, if you miss your filing deadline for whatever the reason, do you want to challenge the bureaucracy and hope you they will take your side?

To compensate for the overwhelming number of people wanting this credit (see Cash for Clunkers above) a safe move would be to close escrow probably at least a full week before Thanksgiving (that means November 19); I would even argue a week before that or November 12. But wait, we need to discount 30 days for escrow time, so we will need to find, negotiate (in probably multiple offer situation) and be in contract by October 12, 2009 to insure you get your $8,000 credit.
October 12 is not that far off……

Steve Mun, Silicon Valley Realtor
www.stevemungroup.com