John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Last week, I blogged that first-time home buyers should place homes under contract sooner, rather than later, if they want to take advantage of the $8,000 federal tax credit that expires at the end of November.
Mortgage lenders and real estate brokers are concerned that the home closing process could take as long as 45 days, which means that buyers should have homes under contract by Sept. 28 to be assured of getting the home closed in time for the tax credit as it currently stands.
A number of real estate groups are lobbying to extend, and even expand to $15,000 and to all home buyers. but it is a gamble.
But Brian Hamilton, executive vice president of Denver-based Land Title Guarantee Co., a co-sponsor of InsideRealEstateNews.com, told me late last week that he does not expect his industry to be part of any closing delays.
“My sense that the title insurance industry will not be the stumbling block,” Hamilton said. He added that consumers would still be wise to get homes they want to buy in the pipeline as soon as possible, because there could be delays on the lending side.
Indeed, he pointed out something that I hadn’t initially considered.
“The reality is how this really plays out is that you have Thanksgiving right before the deadline, so you are really going to lose two working days,” Hamilton said.
He said Land Title will be monitoring the situation closely, and is prepared to beef-up staffing, if necessary.
“We are going to make sure staff-wise that we have enough people,” he said. “We have talked about this internally. We are going to be working until the bitter end. And we have the ability to electronically disperse funds, which will be a help.”
But Land Title, and other title companies, may not need to increase staffing.
“When you look at our overall business, from a historic basis, we’re not that active on the residential resale side in the fall,” Hamilton pointed out to me. “Quite honestly, our normal real estate purchase business starts to fall off in October and November. The seasonal drop should give us ample excess capacity to handle any increases because of the tax-credit closings. In general, we see a 30 to 35 percent drop in closing volume in November from what we see in June, July and August.”
I said that it is a good thing that the program didn’t close in August, which would have sent people scrambling during the summer months.
“That would have been a train wreck,” he said.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865
