Pragmatic people understand that no one is ever really ready to buy a house or have kids, so you might as well just go for it.

There is some wisdom in his leap-before-you-look approach — if you are actually waiting for the day when you can afford to buy a house outright, you will wait at least until the day you hit Lotto. More likely, you’ll still be waiting when they stick you in the ground.

Still, being a buyer, particularly a first-timer, can be excruciating. Instantly tacking $200,000 (or much more) onto your bills-due list has to be bad enough. But on top of everything, you have to contend with the daunting issue of getting past creditors that have become what could most charitably be described as gun shy.

However, a first-time buyer has an ally in the federal government, at least until November 30. That is the date on which the first-time buyer credit of $8,000 expires. But, as the New Jersey Association of Realtors, based in Edison, reminds, November is not as far away as you might think, particularly when dealing with a house.

“Potential buyers need to account for the time it takes to shop for a home, present an offer on the property of their choosing, and manage the various contracts and logistics that are required in a real estate transaction,” says NJAR president Diane Dilzell. “Starting the process now should allow just enough time to reach closing before the expiration of the credit.”

First-time buyers might be unaware of what they need to consider when buying a house. Dilzell says buyers need to factor in the following steps that are typically involved in the purchase of real estate: shopping for and securing a mortgage, finding an agent, creating a list of preferable features for the home, searching for homes that fit criteria, settling on a home, presenting an offer, obtaining a home inspection, shopping for homeowners insurance, and closing.

You also need to factor in extra time to allow for unforeseen circumstances and any additional steps that may be necessary in their particular transaction.

What helps the first-time buyer is that sales prices are as low as they are likely to get, and creditors looking to reignite some business are offering mortgages with good interest rates. It is not a stretch to say that based on the asking price of a property, the right offer could spell a savings of $20,000 to $30,000 for the first-time buyer, after the $8,000 credit goes through.

Just remember, you have to close on the house in order to get that $8,000, and closing will take you past November 30 if you wait too long. As Dilzell reminds, “The clock is ticking.”

“Unique circumstances can be encountered in any transaction so it is important to get started early to account for those factors,” she says. “Since numerous third parties are involved, delays can often be expected no matter how swiftly you act. That wait time can be very detrimental if it is the difference between $8,000 and nothing.”

Real estate experts remind that is often takes 60 days or more to close on a home purchase.

The tax credit is available to buyers who have not owned a principal residence during the three-year period prior to the purchase. The credit does not have to be repaid, but it does have to be claimed on your federal income tax return.

The good news is that the credit can be applied toward repairs and renovations in fixer-uppers that buyers might not otherwise have been able to afford, be invested for future use, or used to buy new furniture and appliances.

The bad news is that if you try to take the credit and do not qualify, you are screwing with the IRS, and the IRS has started prosecuting frauds.

On July 23 a tax preparer named James Price of Jacksonville, Florida, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces up to three years in jail and a $250,000 fine.

The IRS has executed seven search warrants and has 24 open fraud investigations relating to the credit, and the agency claims to have “sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.”

Eileen Mayer, IRS’s criminal investigation chief, has warned, “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns could cost you payment of back taxes, plus penalties and interest.

For more information from the NJAR, visit

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