Don’t look now, but summer is quickly passing by and we’ll soon be saying hello to autumn.  Real estate activity typically takes a dip in the latter part of the summer as prospective buyers take vacations and basically try to wring the most out of the remaining days of summer.  But this year it may be a different story, or let’s say it should be… the first time home buyer’s credit, which provides a 10% tax credit on home purchases for first-time buyers up to $8000 (or buyers who have not owned a home within the previous 3 years) expires on December 1.  That doesn’t mean that a buyer has until December 1 to find a property, or to make an offer or even to have the offer accepted… the transaction has to CLOSE by December 1!

Given the issues we’ve seen with tightening credit and falling property values, a ‘typical’ closing is taking no less than 45 - 60 days from the time a contract is signed.  If issues are found during an inspection or if the property doesn’t appraise out, then that can add even more time.  And as for short sale and foreclosure listings, the boat may have already left the harbor.  Those deals can take months to close.

A buyer hoping to take advantage of the tax credit really should have a signed contract no later than October 1 (for a ‘non-distressed’ property; much sooner for a foreclosure or short sale).  Many parties in the real estate industry have been lobbying Congress and the President to extend or increase the incentive but so far nothing has been announced.

So, if there is a message for first-time buyers it would be to take advantage of the late summer ’slow time’ in real estate to be scouting out your dream home.  Home sellers are anxious to sell before winter, when market activity falls off a cliff.  There are fewer buyers to compete with in late summer so you have the ‘pick of the crop’.  There is no guarantee that there will be another buyer incentive when this one expires so if you are in a position to buy, now may be the ideal time.  Rates are still historically low, prices have fallen but are beginning to firm, and there is ample supply.  Sounds like a great deal to me!