Rush on to meet tax credit deadline

Lasner on Real Estate Blog, posted by Jeff Collins

Local escrow offices are rushing to meet today’s deadline to close home-buying deals in time to meet the federal tax credit deadline.

“It’s very busy,” said Elaine Janks, vice president-sales for Chicago Title’s Irvine office, which handles escrows for much of Southern California. “We’re getting a lot of incoming wires and trying to meet the different county recorder deadlines and get loose ends tied together.”

Janks estimated that her office has had a 25% increase in business over its usual month-end workload.

Homebuyers had until April 30 to start a transaction that qualified for up to $8,000 off their federal income taxes. But those deals had to close escrow by today to qualify for the tax credit.

Californians had an added incentive to close escrow by today. A pair of state home-buyer tax credits — one for first-time buyers, another for new-home buyers — allow home-buyers to get up to $18,000 in federal and state tax credits.

As of June 22, more than 17,800 first-time home-buyers had applied for state tax credits, accounting for more than 90% of the $100 million available in the first-time buyer program, the Franchise Tax Board has announced.

In addition, more than 6,400 buyers applied for new-home buyer credits, accounting for more than 40% of another $100 million in credits.

“We have several transactions that we’re trying to close today,” said Debi Peters, certified senior escrow officer for Tiempo Escrow II in Laguna Niguel.

Peters noted that some lenders selling foreclosed homes are letting deals close even though some bills are missing. Normally, they insist on knowing how much their total costs are before closing escrow.

“They were willing to work with the buyer,” Peters said. “They were willing to bend their own rules to get it closed.”

Peters said that in her office, opening new transactions have taken a back seat to getting existing deals done on time.

“Everyone’s concentrating on closings,” she said.

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