Real Estate

OK so the federal tax credit closing deadline was finally extended to September 30th.
We put a *cash* contract on a short sale condo 3 mos. ago, yet to be approved by bank.
We put our daughters name on the contract so she could qualify for the tax credit, and she was to live in the home while she’s at college. The contract had an expiration date of June 30, the original closing deadline for the tax credit.
With no approval and the condo in need of repairs that would likely take several weeks, we needed to find a suitable place for our daughter to live before start of fall classes mid-August. We signed a 12 mo. lease at a student apartment complex. They were filling up fast and we couldn’t afford to wait on the short sale any longer.

We’re no longer interested in the condo without benefit of the tax credit to put toward repairs, and have suggested to the realtor that we’d only go forward on a price reduction to compensate. Realtor’s pushing us to extend the contract, saying we’ll still get the tax credit due to the Sept extension. I don’t think he ‘gets’ my point that without our daughter living there, this isn’t possible.

As far as I can tell the recipient of the tax credit must live in the property as their primary residence for 3 yrs, and that occupancy has to be in the same calendar year as the year of purchase.

Can anyone with real knowledge and experience in this area clarify the occupancy requirements? Thanks.

You’re right.
Realtor only gets paid when there’s a closing.
Hopefully they aren’t encouraging fraud on your part. . . . .?
Contract dies at end of term if you don’t extend it and youget your deposit back.
Put it in writing to realtor and other side that you are NOT extending time on contract and requesting return of deposit. Give the realtor a nice giftcard and move on.
www.irs.gov First Time Home Buyer’s Credit form 5405