Repeat Home Buyers Need to Act Fast

We've written about this subject a couple of times before, but it bears repeating now. Repeat home buyers need to act fast to capitalize on the expanded tax credit.

This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.

To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.

Of course, there is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one, need to move quickly. In normal situations, it takes around 3 months or longer to sell a home, and these are not normal times. So acting now is critical, if you hope to secure a buyer for your existing home before purchasing your new home and still fall under the time frame allowed by the expanded tax credit.

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