Let’s talk about deadlines.

I’m very good with deadlines, or very bad, depending on how you look at  it.  I’m good in the sense that I generally meet my deadlines (our Marketing Department might take issue with that, but I stand by it).

I’m bad in the sense that meeting those deadlines generally involves a lot of coffee, late nights, and immense stress, because I leave everything to the last minute.

When it comes to the Home Buyer Tax Credit, don’t be like me.  Don’t leave things to the last minute.

The Deadlines

As you might know, the Home Buyer Tax Credit has two principal deadlines:

· You have to be in contract by April 30^th, 2010; and

· You have to be closed by June 30th, 2010.

These are hard deadlines.  It’s not like high school when you can go to your teacher and ask for an extension because you were sick over the weekend.  The government is not likely to issue another extension of the tax credit, and the IRS has been extremely strict about enforcing the deadlines. 

If you want to take advantage of the Home Buyer Tax Credit, the time to start is right now.  I realize that April 30^th seems a long time away, but it’s only 112 days from January 8^th, the day I’m writing this.  Some of you have probably been looking for months already, so you know that it can take time to find your perfect home.

Remember that getting into contract on a home can take a lot of time, that you have to get all these things done:

· Find the right real estate agent.

· Find the right mortgage officer

· Get pre-qualified for a loan amount.

· Look at lots of homes online.

· Look at lots of homes in person.

· Find the right home, and make an offer.

· Negotiate the price and terms.

· Arrange and hold an inspection.

· Deal with the inspection results.

· Hire an attorney to review contracts.

· Review contracts with attorney, sign and return.

And then even if you’re in contract by April 30^th, you’re not home free, because you still have to be closed by June 30^th, which gives you only 60 more days to get through the title and financing process.  And those can take a while. 

Moreover, I fully expect that as we get closer to these deadlines, we’re going to see business activity explode. If you wait too long, you might have trouble scheduling an inspection when the inspectors are being hammered with urgent calls from people in the same position. A lot of people are going to be scrambling to get into contract in the last two weeks of April, and closed in the last two weeks of June.  Try not to be part of that mob.

Seven Tips

So to get you off to the right start, as we begin this wonderful new year, here are 7 Tips for Meeting Your Home Buyer Tax Credit Deadline:

1.  Get your team together today: Realtor, Lender, Lawyer, etc.

Don’t waste time in getting your team together. If you already have a great Realtor, then you’re off to a good start. If not, email me and I’ll set you up with someone great.  And if you need a great mortgage officer and lawyer, your agent can direct you to someone that can make sure you get in contract and close on time.  But don’t wait until the last minute to hire someone. Talk to a lender today.  Moreover, go hire an attorney today.  Your attorney won’t have much to do until you negotiate a deal with your agent and get contracts from the seller’s attorney, but it’s a good idea to have the attorney prepared and at the ready for when those contracts come in.  You don’t want to be sitting around for two weeks after your inspection because you’re interviewing attorneys.

2.  Make sure everyone knows what you’re doing.

Don’t hide your intentions – make sure everyone on your team knows that you need to be in contract by April 30^th and closed by June 30^th. Most of your real estate professionals work with lots of clients, so they might not know who has the urgency of being in contract. Put them on notice that you need to meet those deadlines.  This includes the seller and the seller’s attorney, since their cooperation in meeting your deadline is going to be crucial.

3.  Start gathering your documents immediately.

Talk to your lender about the documents you’re going to need to get your loan approved, and start gathering them now. You’d be surprised at the extensiveness of the documentation sometimes required, including proof of employment, past employment, income, tax returns. Those documents are not always easily available, so the earlier you have notice that you’re going to need them, the better.

4.  Be proactive with your lender.

The most likely area of delay in a real estate transaction is in the financing, not because your mortgage officer did anything wrong but simply because bank financing is a complicated process.  My colleague Drew Kessler once told me that buyers always eventually get annoyed at their mortgage officer, regardless of how good a job he or she does, because the nature of the process itself drives frustration.  So be proactive with your mortgage people – stay on top of them, keep lines of communication open, and make sure they are working on moving your transaction forward. 

5.  Stay on top of everyone.

The same goes for everyone in the transaction.  Communicate with everyone, stay in touch with all the moving parts of your transaction, don’t let anything fall through the cracks.  Treat your real estate transaction like a business project, and keep a checklist of items that the people on your team are working on.  Your real estate agent should be your project manager, but don’t just defer to him or her.  Be active in the process, and remind everyone of your deadlines.

6.  Be prepared for last-minute delays.

No matter how well you manage your transaction, you’re going to end up with last-minute delays.  Problems crop up – a missing survey, a forgotten lien on the seller’s title, attorney schedule conflicts, a document that the bank suddenly decides it needs. That’s why it’s important to make sure you don’t leave things to the last minute.  The more proactive you are, the more likely that the four days you lose because of last-minute problems aren’t the four days between April 28 (you get the credit) and May 2 (you don’t).

7.  Choose your Seller wisely

Lastly, be careful about your seller.  Think of your seller as someone who is going to be on your team.  A good real estate transaction should be cooperative, not adversarial.  Once you get through the negotiation on price and terms, you’re supposed to work together.  So ask yourself – “is this someone that I can trust to work toward the goal of getting this deal closed by the deadline.”  You’re not going to have a huge amount of interactions with sellers directly, but you can get a sense of their character from the way they handle showings, the inspection, the negotiation process, and the contract.  If you see red flags in the way the seller deals with you – obnoxiousness, adversarial posture, or just plain craziness – you might consider the implications for meeting your deadline.  A great seller who is a good person is going to work with you help you meet the deadline.  But if you get the sense that the seller is a jerk, you need to be prepared that the seller might keep you from meeting your deadline. I’m not saying you shouldn’t buy that house, since it would be silly to make a decision about what home to buy based on the seller, but it’s a factor for your consideration if you are depending on the tax credit.

Ultimately, all of this comes down to you and your ability to take responsibility to manage your team and your transaction project.  The key to all of that, of course, is a great real estate agent who can help you manage that project.  Let me know if you need one.

The Market Intelligence blog provides real estate analysis and information about real estate throughout the Hudson Valley, in Westchester County, Putnam County, Rockland County, Orange County, Sullivan County, and Dutchess County.  Feel free to comment below.