First Time Home buyers Logistics

[equinecpa]

I am currently selling an entry level home ($53,000 price tag). I'm getting lots of inquiries about renting to own. I'm trying to find a way to enable these people to BUY my home now (so long as they can get a mortgage) by taking advantage of the first time home buyers credit. This property rents at $500.00 per month, yet currently a mortgage with 10% down would only cost the purchaser about $300.00 per month...

Is it OK for someone to claim the credit on their 2008 tax return if they have a contract to close on a property dated say 04/01/09? Can the enter a FUTURE date in the box and still get the credit on their 2008 return?

Carolyn

[WhiteOleander]

No. You have to close on the property. If for some reason the sale didn't go through then they would not have been entitled to the credit.

[Beth]

What if you sold the house on a Contract for Deed with say a 4 month balloon for the balance?

Maybe then you could sell it, they could get their refund, then go finance the balance....

[jimmcg]

[QUOTE=Beth;75779]What if you sold the house on a Contract for Deed with say a 4 month balloon for the balance?

Maybe then you could sell it, they could get their refund, then go finance the balance....

Contracts for deed vary with individual state law. Do your local state law research carefully first. Generally in a contract for deed the purchaser acquires an equitable estate in the real property. It is generally accepted that the seller retains legal title to the real property however some state courts have held that the seller has only a security title and the buyer is the equitable owner of the property...........Check your state law and court interpretations first.

[David1980]

What if you sold the house on a Contract for Deed with say a 4 month balloon for the balance?

Maybe then you could sell it, they could get their refund, then go finance the balance....

Only issue would be "What if they can't get a loan". I guess you could take it back at that point...

[equinecpa]

I don't believe a contract for deed will work as the property is currently financed. And does a contract for deed qualify as a sale?

This is the problem with the whole homebuyer credit. I have a willing buyer who is approved for the amount of the loan required to purchase the property-but is just short about 2 thousand for a down payment-which the credit will more than cover. I could take a giant leap of faith and take back a 2nd for the downpayment and then amend or file the buyers 2008 return once closed. But giant leaps of faith are scary these days...