Short Sales are Risky for Homebuyer Tax Credit

In the article titled Homebuyer-Tax-Credit-Deadline-Freezes-Out-Short-Sales By Steve Cook at Real Estate Economy Watch, Mr. Cook discusses the unpredictable and lengthy nature of short sale transactions.   In particular, he focuses on the inability to rely on a short sale timeframe to guarantee qualifying for the Homebuyer Tax Credit which requires that a buyer be under contract by April 30 and close by June 30. A buyer doesn’t know how long a sale might take. Homeowner associations, mortgage insurers and second lien holders, to name a few, can all effect the duration and outcome of a short sale. This doesn’t mean that Tax Credit buyers can’t purchase short sales just that they need to understand the sooner they are under contract the better off they will be and they need to understand the risk. 

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