8000 Credit Frustrates some Buyers

RISMEDIA, October 16, 2009—(MCT)—This summer, Brian Smith decided he should buy a house. Prices were at record lows; “for sale” signs were common, and, most important, he could get a tax credit of as much as $8,000 for first-time buyers if he bought before December. But four months later, after looking at more than 40 houses and condominiums, Smith quit his search in frustration. 

“Honestly, my heart was so broken,” said Smith, an associate at a financial-investment company. “I hate that I am going to miss out on the tax credit. But it’s better to wait and get the place you need and want than to get a place and not be happy with it.” 

As the Nov. 30 deadline nears for the first-time home buyer tax credit, no hard numbers suggest how many buyers are in Smith’s position. But interviews with real estate agents, lenders and buyers suggest that the number of first-time buyers who are encountering challenges is rising. 

At least some are learning they must play by a whole new set of rules from just a few years ago. Stung by a real estate meltdown fueled with free-flowing mortgages and runaway prices, regulators have reacted to the downturn by forcing lenders to be stingier with loans. 

Buyers in Orlando, one of the hardest-hit markets in the country, must compete with multiple offers on bargain properties. Short sales can take months to finalize. Foreclosed houses often need repairs that disqualify them from federally backed mortgages. And, amid the free-falling prices, deal-killing appraisals often fall short of sales prices. 
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