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Do the sales count on closing or on signing the contract? The contract had to be signed by April 30 to get the tax credit, so if sales are falling now that means the tax credit had even less effect that Obama and gang hoped.

Since sellers raised their prices (or at least didn't lower as much) in expectation of more buyers with tax credit cash burning holes in their pockets, the tax credit mainly aided the sellers and especially their banks. What smart person wants to buy a house where the price has been temporarily boosted by a few thousand dollars, which will nearly immediately disappear from the equity when the credit goes away.

Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to Form 5405 as proof of the completed home purchase. In cases where a HUD-1 form is not used, such as for construction of some new homes, you should attach a copy of the certificate of occupancy in lieu of the HUD-1.

Federal Housing Tax Credit

Do the sales count on closing or on signing the contract?

Good question. Contract needed to be signed by 4/30, Closing needs to be complete by 6/30. So we'll know a little better in a couple of weeks, I guess.

As for homeowners raising prices, I actually saw (and did) the opposite. Dropped the price around the 1st of April in anticipation of the April 30th deadline. Ditto for the sellers on the house that I bought, and on several others that I looked at. I moved the house almost immediately after dropping the price.

My thinking was "This is pretty much the last shot for 2010, and who knows what's going to happen in 2011. I'll just take my lumps now and hopefully will make it up when I buy the new house.". Which is exactly what happened. Dunno what the other people were thinking.

And with regards to the tax credit, FReepers may laugh, but it didn't sway me one bit in regards to purchasing a house (I needed to buy one, or be homeless....), and I actually wrestled with my conscience in deciding to take the credit. I've decided that if someone left a pile of money on my doorstep with a sign saying "Take Me", I'd be foolish not to use it. I'm looking at it as found money, will likely invest it in the kids' college fund.