Congress came through at the eleventh hour (or was it the 25^th hour?) with an extension of the June 30 closing deadline to qualify for the tax credit.  That will no doubt help many buyers and sellers, although some are going to have to work through the red tape of contracts that were contingent upon closing by June 30.

In the process, there were a lot of lessons to be learned:

1. In today’s financing world, it takes longer to get most deals through.  This is a message for sellers and buyers—and  for agents.  When buyers are serious, they need to move forward quickly.  We need to give them the incentive to do so.  We also need to have closer working relationships with lenders than ever before—and stay right on top of every detail, making sure the settlement process is not delayed at any point.
2. Buyers whose hopes are dashed have an even greater pent-up desire to get into a new home—having come so close to closing the deal.  And if the $8000 tax credit makes the difference, where else could that money come from?  How else could they achieve the same bottom-line financial results without the tax credit?
3. Always try to have a backup plan.  Anticipating a last-minute backlog and the possibility of missing the closing deadline, some home builders wrote a contingency clause offering to reduce the price to compensate for the lost tax credit—provided buyers signed the purchase offer in a timely fashion and applied for financing from lenders approved by the builder.  Some form of seller financing could be used as a backup plan for existing home sales.
4. Were the purchase agreements written contingent upon closing by April 30? 
   1. If not, and assuming there was a reasonable downpayment, buyers would still be better off moving forward with the contracts rather than forfeiting the downpayment.  Consider also the fact that in many places, prices are beginning to creep up again and it is unlikely they will be able to buy a home later at the same price.
   2. If there was a contingency clause, was it carefully constructed?  “Contingent upon settlement on or before April 30, 2010” would seem to suffice.  However, with hindsight, knowing that the deadline has now been extended, wording that would have more closely tied the contract terms to the reality of the situation would seem more apropriate.  Sales contracts that did not specifically allow for the extension of the closing date, would have been “dead on arrival” even if the deadline for the tax credit were extended.
5.  Contracts that “kicked out” because of failure to close by the deadline leave both buyers and sellers hanging.  And these are buyers and sellers who have demonstrated their seriousness about making a move right away—and both have been taught a serious lesson about the need to be decisive.  As the listing agent, review the listing price and terms and possible seller incentives that could attract buyers now that the tax credit incentive has disappeared.  If you had the buyer side, be sure to get an “exclusive right to represent” signed and get these buyers back out into the marketplace right away.  You couldn’t ask for better clients!  And, if you are successful in fulfilling their expectations, be sure to get referrals and testimonials!
6. The large consumer outcry over the tens of thousands of contracts that were in jeopardy just demonstrates that home ownership still holds an important place in the minds and hearts of American public.  Let’s find ways to make headlines with this.  Instead of the media focus on the doom and gloom of foreclosures, let’s bring the spotlight to focus on this pent-up buyer demand!