The federal home buyer tax credit expires April 30 and the deadline is sparking a home sale surge. It figures to burden real estate, mortgage and title offices nationwide over the next 60 days so plan your closing date accordingly.

Especially because the last Friday in May is the Friday before Memorial Day.

Now, if the connection between the tax credit and Memorial Day is not immediately clear, think of your own office on a 3-day weekend’s Friday. Some of your colleagues take a half-day at work, others take the entire day off.

Office-wide, productivity drops.

The same is true in the real estate space. Offices are short-handed ahead of a holiday so, if you’re under contract for a home and plan to close in May, consider a closing date other than Friday May 28, 2010.

And meanwhile, with 6 weeks until Memorial Day, here’s some steps you can take today prepare for other people’s time off later.

1. Notify your lender of your planned vacation time between now and your scheduled closing
2. Purchase a homeowners insurance policy and prepay the first year. Send proof of payment to your lender.
3. Have Power of Attorney forms lender-approved and signed by all parties in advance, if applicable
4. Deposit gift monies and/or retirement fund withdrawals into an acceptable bank account, if applicable
5. Schedule your final walk-through as far in advance as is realistic so there’s time to make “fixes”, if needed
6. Have your closing funds ready at least 1 day in advance

The tax credit’s expiration is around the corner and as it gets closer, real estate-related businesses are taking on more work. Basic title and mortgage tasks are taking longer to complete and that should persist for a while.

Get ahead of the curve and beat your contract dates handily. Use the checklist above and be responsive to your lender’s requests.

And, if at all possible, avoid closing on the Friday before Memorial Day and even the Tuesday after — it’s when office staffs are at their smallest.

Related posts

• Updating Your “Old” Pre-Approval
• There’s 100 Days Left To Claim The Homebuyer Tax Credit
• Pending Home Sales Soar | Values Heading Higher
• Mortgage Approvals Are Getting More And More Scarce
• March Shows New Home Sales Surging

There’s just 30 days remaining to use the federal home buyer tax credit.

The credit ranges up to $8,000 for first-time homebuyers, and up to $6,500 for existing homeworkers who have lived in their main home for 5 of the last 8 years.

Claiming the federal tax credit is a two-step process. First, you must be under contract for a new home on or before April 30, 2010.  Then, you must close on said home on or before June 30, 2010.

There are no exceptions on the dates (except for certain members of the military).

Timeline aside, homebuyers and the subject property must also meet minimum requirements in order to be tax credit-eligible:

• You can’t purchase the home from a parent, spouse, or child
• You can’t purchase the home from an entity in which the seller is a majority owner
• You can’t acquire the home by gift or inheritance
• Each buyer in the purchase must meet eligibility requirements
• The home sale price may not exceed $800,000
• Buyers may not earn more than $125,000 as single-filers; $225,000 as joint-filers

The complete eligibility checklist is published on the IRS website.  Or, if you find IRS-speak too difficult, make a phone call to your accountant.  Asking a tax professional’s advice on a tax-related matter is never a time-waster.

And lastly, don’t forget that if you’re claiming to federal tax credit for home buyers, it’s a tax credit and not a deduction.  This means that a tax filer who qualifies for the full $8,000 and for whom the “normal” federal tax liability is $8,000, will owe no federal taxes in 2010 to the IRS.

If you’re an active buyer in Chicago, or anywhere else in the country , mark your calendar for April 30, 2010. It’s 30 days from now and, as the date gets closer, buyer traffic will increase. The likely result is higher home prices and more difficult negotiations.  The best time to act may be today.

Related posts

• There’s 100 Days Left To Claim The Homebuyer Tax Credit
• $8,000 Tax Credit Ends In 7 Weeks
• Updating Your “Old” Pre-Approval
• Pending Home Sales Soar | Values Heading Higher
• Mortgage Approvals Are Getting More And More Scarce