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Realtors seek tax-deadline deal

A home for sale.

A home for sale. Credit: Getty Images

Some saw it coming and now it’s here:

The National Association of Realtors has started quietly lobbying Congress to stretch the June 30 deadline for closings under the federal home buyers tax credit.

The trade group said worried brokers say short sales and foreclosure sales are taking longer to close than regular deals. Based on just the short sale contracts in the pipeline for the past two months, NAR said up to 75,000 sales might not close in time for buyers to get as much as $8,000 in tax credits.

“They want to know if they can get the deadline extended because without the tax credit, the whole deal would fall apart because that’s the basis that the buyers are using to buy these properties,” said NAR spokesman Lucien Salvant.

The time risk in such deals was common knowledge not just in Long Island real estate circles but nationwide. Many agents had advised buyers to stay away from short sales and foreclosures to meet deadlines.

But Salvant said the collapse of many deals would put a crimp in the nation’s fledgling economic recovery.

NAR has not proposed any specific changes.

But there is a double-edged sword for lawmakers in NAR’s campaign – the elections. They come at a time when many voters worry about skyrocketing, federal deficit.  

“We have talked to key people (in Congress) and they understand the problem,” Salvant said. “We’ve got elections coming up in a few months and that’s on their minds too, about how much to help certain kinds of voters.”

Nick Gigante, broker owner of Re/Max Shores in Massapequa, said agents, buyers and sellers have little control over the deals now – the matter is in the hands of lenders and attorneys.

He favors stretching the deadline, especially for buyers in regular sales. Buyers had to be in contract by April 30 for the credit, and while two months for a closing was plenty of time in normal times, lenders are swamped these days.

“The buyer knew if you’re going for a short sale that there was a chance that you couldn’t close by the 30th of June,” Gigante said. “In a normal sale, if the buyer was in compliance and the bank is slow, the buyer shouldn’t be penalized for that.”

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