From the Record:
Luis Ponce of Union City is closing on a Westwood home Wednesday — he hopes.
If the closing is delayed, Ponce and his wife won’t qualify for a federal tax credit of $8,000, which they plan to spend on repairs, paint and a washer and dryer for the house.
“If we don’t get the money, that’s going to be a big setback for us,” said Ponce, an information technology specialist.
With the tax credit expiring Wednesday, it’s crunch time for buyers, real estate agents, lawyers and lenders. While the National Association of Realtors has pushed for an extension, as of Monday, Congress had not acted to extend the deadline. The credit is available to buyers who signed a contract by April 30, as long as they close by June 30.
“Time is running out,” said Paul Marino, a Hackensack real estate lawyer.
Ponce’s agent, Tony Sanchez of Weichert in Clifton, is working on six deals he hopes will close by Wednesday. Two of them, he said, probably won’t make the deadline. In one case, there are problems with the property’s title; in the other, the lender requires repairs that may not be done in time.
But Sanchez was optimistic about the Ponces’ purchase, which involves a bank-owned property that needed repairs before the town will issue a certificate of occupancy.
Short sales, in which the lender accepts less than is owed on the mortgage, typically are more complicated and time-consuming than regular sales. As a result, some buyers in these deals won’t be able to meet the deadline.
“Short sales take forever,” said real estate lawyer Patricia Kieck of Hackensack. Two of her clients who had hoped to close by Wednesday won’t make it. One case, she said, is a short sale where a second mortgage and judgments have clouded the title.
“Sixty days from contract to closing: sometimes that’s a tight squeeze unless everything is smooth and there are no issues,” Kieck said.
The NAR estimates there are 4,300 buyers in New Jersey and 180,000 nationwide who are in the process of buying a house and are eligible for the tax credit but will not be able to meet the June 30 deadline.