First-Time Home Buyer Tax Credit to Buy Chicago Properties

Everyone wants to get in on the action today in distressed properties and pick up incredible bargains. And first time homebuyers can sweeten the deal by applying for an $8,000 tax credit. Even better, you don't have to wait until April 15, 2010 to receive the credit. By filing an amended tax return, you can receive the money within a matter of a few weeks!

There is one detail that can derail your whole plan: you must CLOSE your transaction prior to Dec 1, 2009. In other words, you need to make finding a property a high priority.

Purchasing A Short Sale:
When the consumer uses the term "foreclosure", it is a categorization that includes 2 separate and distinctly different scenarios. The first is a "Short Sale" situation. In a short sale, the owner still owns the property but they are selling it for less than what they owe. The bank must agree to accept less than what is owed them, which is not an easy task - even in this environment. It is not unusual for the bank to take 90-120 days to even respond - and sometimes they may choose to just reject your offer. It's OK to submit an offer - but in the meantime, you will want to continue to look for another property.

Purchasing An REO:
You may do better to look at "REO's" - which stands for "Real Estate Owned". An REO is a property where the bank has already gone through the foreclosure process and now owns the property. The problem with an REO, however, is that once a property sits vacant - sometimes for over a year - there is major damage to the property. Typically, an experienced contractor or investor is a more suitable buyer for an REO.

If you are looking for distressed properties to use the $8,000 tax credit, keep these points in mind:
- If you submit an offer on a "short sale", don't stop looking at other properties.
-Other forms of distressed property, other than foreclosures, are estate sales (where the owner has passed away) or where the owner must sell due to an urgent personal situation (e.g. a job transfer or a divorce).
-Remember, you must CLOSE prior to Dec 1, 2009! The time you submit a contract until you close can easily take 60 days - and more if the financing is complicated (such as FHA 203k loan). In other words, you need to find something NOW!
-Let your real estate agent know your goals so she can assist you in finding a suitable property quickly.

Don't let the illusion of buying an incredible property at a bargain price cloud your judgment. The economy has affected all sellers - not just sellers that are in trouble. You may discover that your best deal is the "normal" one - the one with a realistic seller.

Rarely has there been a better time to be a first-time homebuyer. Let me help you, or someone you know, take advantage of the opportunities available in today's market! Contact Ramona DeMille - Chicago Realtor for more information on how to utilize this once in a life time opportunity.