The hope is that Congress will extend the program for an additional six to 12 months, which will in turn take some pressure off buyers, agents and escrow companies alike.
If you are a buyer and you're just beginning to look for a home the tax credit rules requires buyers to close escrow and not just be in escrow no later than November 30th of this year. For those who have not picked a house or have not secured financing are running out of time since purchases usually take several weeks to several months.
The National Association of Realtors and the National Association of Home Builders are spending this month lobbying intense campaigns to extend the federal tax credit. Their efforts are initially targeting both the House Ways and Means and Senate Finance committees and then the organizations are expected to contact most of the other members of Congress as well.
Additionally, large groups of real estate brokers and home builders are already contacting many district offices and explaining the financial facts on the numbers of homes sold in each Congressional member's district that were a direct result of the tax credit and how these purchases have also boosted their local economy and have brought in additional tax revenue that have also helped local governments.
The National Association of Realtors has shown Congress that by extending and expanding the tax credit there may be an additional 300,000 to 350,000 home sales this year and they have also explained that each sale generates over $60,000 in revenue for the local economy.
If these efforts are not successful in getting an extension to the tax credit then one of the most effective parts of President Obama's 2009 stimulus legislation may cost jobs and slow additional economic growth and tax revenue.
Fortunately, Congress may be getting the message because there are a couple of bills that are pending in both houses to extend the $8000 tax credit for yet another year. Senate Majority Leader Harry Reid (D-Nev.) has reportedly stated that he is in favor of an extension of the tax credit particularly since his state has been among the worst hit by the housing crisis.
Also, Sen. Christopher J. Dodd (D-Conn.), who is the chairman of the Senate Banking Committee, is working together with Sen. Johnny Isakson (R-Ga.) and together they are cosponsoring a bill that would raise the tax credit amount up to $15,000.
Both the National Association of Realtors and the National Association of Home Builders are concerned that their efforts might not be completed before the November 30th deadline particularly since Congress is dealing with the higher-profile issue of healthcare reform that may get most of their attention until the end of September or October.Sadly, if the extension is not successful then it may cost much more in lost revenue which will have a very powerful negative effect on the federal budget's deficit which is already in the red.
With all the positive effects that the $8000 federal tax credit has already done for the economy and for the housing industry, there is a good chance that an extension may happen although it will most likely happen later rather than sooner. Let's all keep our fingers crossed.