Many realtors practice the “win-lose” way. They’ll stand in the way of creating a win-win solution so all parties are satisfied, and instead bury the other party every chance they get.
Take the dishwasher story for example. I mentioned earlier about the listing agent who went berserk over our request for a new dishwasher, which, of course, was then denied by the sellers. They did agree to a couple of repair requests, but cut corners on those and then said if you don’t like it too bad. Then once it closed, the agent wouldn’t meet me to hand over the keys, and I had to get a locksmith to gain entry. There was no remorse.
It’s those types of agents that don’t get i,t about this being a cooperative business.
Don’t be surprised if we hear some stories about the new California Homebuyer Tax Credit form not being completed in a timely fashion. According to the instructions, the sellers have 14 days to complete the tax-credit form (including their social security numbers), and return to the buyers. The knucklehead agents who delay the return of the form are going to cost some buyers their tax credit, and $10,000.
Here are the links:
INSTRUCTIONS
http://www.ftb.ca.gov/individuals/new_home_credit.shtml
FORM
http://www.ftb.ca.gov/forms/2010/10_3549a.pdf
My guess is May 27th as to how soon the $100 million will be used. Beginning May 6th, they are going to have a countdown clock too!
Here are other facts from the ‘instructions’ link:
The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.
We will allocate the tax credits on a first-come, first-served basis. We expect it to take 3-6 months to notify taxpayers after an application or reservation is received. We need to develop a computer system to capture, verify, reserve or allocate, issue letters, and track the credits. Please be patient and do not fax an application more than once. Since the First-Time Buyer Credit is expected to be used up very quickly, we will provide estimates, based on sampling, of the number of First-Time Buyer applications and the related credit amounts that we have received beginning May 6, 2010. This will allow First-Time Buyers to estimate whether they will be able to apply for the credit and allow us to determine when we have received enough applications to fully allocate the $100 million and stop accepting First-Time Buyer applications. Since the New Home Credit is not expected to be used up as quickly, we will wait until approximately mid-July after our computer system is available to post information about the New Home Credit usage. (Updated 04/28/10)
Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.
“Then once it closed, the agent wouldn’t meet me to hand over the keys, and I had to get a locksmith to gain entry.”
Isn’t this kind of crap what Small Claims Court was designed for? When you buy a house, you expect keys, or at a minimum, if no keys ever existed, then the place should not be locked.
“The knucklehead agents who delay the return of the form are going to cost some buyers their tax credit, and $10,000.”
This is why I always hire an attorney. If there were any delay that cost some loss, I’d be looking to those who delayed for compensation. The compensation would be less than $10,000, as that is an undiscounted value, but the starting point would be the full $10,000.
At 6% commission rate and a $500k purchase price there is $30k in sales commissions. I am fully aware that there are various expenses, but is it unreasonable to expect these paid professionals and the seller to act timely?
CA tax credit = cluster***k
So buyers can sue?
I see the State Cheese is going to be a clusterf**k as well because it will “be months” before you’re notified!
Gee wiz
The realtor I worked with to buy my first home back in 1983 had a practice of writing contracts to require sellers to give a set of keys to the title agent at the time they did their final signing, and I have asked for this every time since. Maybe buyers should be insisting on a clause making the sellers and/or their realtor liable for paying the homebuyer tax credit if it is denied because the sellers failed to file their papers correctly and in a timely manner…?
Could the seller fill out the seller’s section before close of escrow? It looks like the seller only needs to sign and date for the new home tax credit, not the first time home buyer credit. If it can be done before close, the buyer could insist on it before forking over the down payment.
Or, if you can find out the seller’s SSN, you can fill out that section for them, since their signature is not required.
Jim,
Do you have any idea when the new home credit will be used up. My close date is mid-June. Thanks.
I think last year’s new home credit was used up in 3 or 4 month, so my guess is you’ll still be good in mid-June. But if you signed a contract on May 1 or later, you can reserve your credit now. (If not, maybe you can get the seller to agree to sign a new contract to supersede the old one?)
The first time home buyer credit is a different story. That’s going to get used up very quickly, because many more buyers will qualify for that.
Thanks, Mark.
I signed the contract before May 1st. Builder agrees to cancel and sign a new contract now in order to reserve the state credit. But this way I would lose Federal credit. So maybe the only way I can do is just waiting.
This excerpt from what Jim quoted implies that the FTB believes the new home credit will still be available in mid-July:
“Since the New Home Credit is not expected to be used up as quickly, we will wait until approximately mid-July after our computer system is available to post information about the New Home Credit usage.”
So probably just waiting is the right thing to do.