Most of you (the ones who have been cheating on us and reading other blogs) are probably aware of a limited time chance in California for home buyers to double-dip. From the California Association of Realtors (CAR):
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state home buyer tax credits. To take advantage of both tax credits, a first-time home buyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time home buyers may use the same time frames to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Which brings us to the Law of Unintended Consequences. State legislators who failed Logic 101 and who, due to lost revenues and government cutbacks, apparently now find themselves without calendars didn’t anticipate the effect of the little overlap. What was presumably intended as a stimulus measure has stimulated all buyers currently in escrow to delay their closing until May.
In case you missed the punch line, let me point out the obvious. These are people who were buying anyway! So, in effect, the broke State of California has just thrown untold millions out on the proverbial freeway.
We have several clients who are currently horse-trading with the sellers to get an extension of their closing dates to next month. And, don’t get me wrong. I don’t blame them. Who doesn’t like free money? It’s just that I can’t believe that the intent of the State tax credit was to hand out bonus prizes to people who had already made the decision to buy and had committed to a purchase. Why not make it retroactive? I purchased my home in 2000, and I could use a little extra cash.
On the subject of stimulus, what you may not be aware of are some lesser-know bills that are winding their way to the Governor’s desk.
AB 349-BS – Home buyers who enter contract on April 17th between 1:00 PM and 1:45 PM (GMT) and close escrow during the current administration will receive a free four-slice toaster in their choice of white or brushed steel finish (subject to availability), provided they did not sign the contract electronically or otherwise use modern means to communicate with their agent and the seller during the transaction in order to comply with current lender policies. “Modern means” may include e-mail, text messages, or handwritten notes written with other than a feather quill. Hand gestures are acceptable, but only if they are recorded for reel-to-reel playback.
AB 350-BS – For all home buyers closing escrow before 10:00 AM on any Thursday in May, the State will donate $1,000 to the homebuyer’s favorite school. Dubbed the “Textbook Buyback Program,” costs will be offset through elimination of campus water fountains, bathrooms, teachers and other non-essentials.
AB 351-BS – Home buyers who meet the requirements of both AB 349-BS and 351-BS and who can name all islands in the Lesser Antilles will receive a gift card for 10% off their next Amazon.com purchase. The State has set aside $12.83 for this program, which will sunset when funds run out on Tuesday. Buyers who think they may qualify should first read the State booklet, “Mean-Spirited Island Chain Names,” for more information.
AB 352-BS – The “Instant Winner Bonanza Bill,” this program awards prizes to lucky home buyers who can match the numbers on their first meter reading to the closing costs on their final settlement statement. For odd numbers, buyers will receive $1 million paid over 25 years. Those with matching even numbers will enjoy a free Grand Slam breakfast at Denny’s (no substitutions allowed; gratuity not included). There will be no costs to the taxpayer, as the program will funded through the elimination of power and potable water services to incorporated municipalities.
AB 353-BS – Under the provisions of this bill, for home buyers who can prove that they wouldn’t have bought a home anyway but just decided to do it now rather than in, say, July or August, because they wanted large sums of money and a new toaster, the State will just buy them the dang house (value to be determined based on Zestimate).
How’s that for stimulus?