Most purchase agreements are subject to contingencies, even though you may not specifically think about it in those terms. According to Heidi Peterson, In-House Legal Counsel for the Minnesota Association of Realtors, contingencies do not have to be met by the April 30th deadline to qualify for the tax credit… you just need a fully executed purchase agreement, signed and delivered to both parties.
What are examples of contingencies?
- Subject to inspection – including whole house inspection, radon, moisture, mold, asbestos, structure, lead-based paint, etc.
- Subject to financing – including satisfactory appraisal, title review and final underwriting approval
- Subject to review of association documents – including governing documents, financials, rules and regulations, HOA certification, etc
- Subject to short sale approval – purchase agreement is signed by buyers and sellers, then sent to the bank(s) holding the mortgage(s) for short sale approval negotiations to accept less than full loan payoff amount as payment in full
- Subject to well water testing, septic inspection
- Subject to sale of existing home – removal of this contingency requires a signed purchase agreement for the sale of the contingent property, not contingent upon anything other than financing and with a closing date not later than the closing date in the contingent purchase agreement
Even though contingencies do not have to be met by April 30th, they must be met in time to close by June 30th to qualify for the homebuyer tax credit.
Qualifying repeat buyers who are also selling a home do not have to sell their current home by June 30th… or ever. However, their new home must become their primary residence.
Sharlene Hensrud, RE/MAX Results – Email – HomesMSP.com
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