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I am a first time home buyer and have a ratified sales contract

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signed and dated by all...
I am a first time home buyer and have a ratified sales contract signed and dated by all parties April 20 2010. I am purchasing the home from a contractor who bought the home out of foreclosure, and has only owned the home for a short while. I am still in the process of trying close, and I understand that the contract needs to have been signed by April 30th and closing must take place by June 30. One of the stipulations we just got from the lender is that they need a ratified sales contract with a date of May 4 or after, because there was a problem with the seller's name not appearing on the deed until that date due to his short length of ownership. My question is, if we provide that ratified sales contract with a date of May 4, will I be inelligable for the tax credit even though the original contract was signed April 20?
Submitted: 7 years ago.Category: Tax
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Answered in 27 minutes by:
6/1/2010
Tax Professional: Robin D., Senior Tax Advisor 4 replied 7 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,253
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello and thank you for using Just Answer.

If you entered into a binding contract by April 30, 2010, you must close (go to settlement) on the home on or before June 30, 2010. Since you had the sales contract on the 20th of April you will be held to the June 30th date for closing. You will be required to send copies of your closing documents when you apply for the credit. The dates will be looked at and you will not be allowed the credit if after June 30th.

I sincerely XXXXX XXXXX information is useful,

 

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Customer reply replied 7 years ago

My question was whether having the second ratified contract dated May 4th used to secure the funds from the lender will negate the first contract dated April 20th. According to the lender, the seller was not legally allowed to have a contract for April 20th because their name was not on the deed until May 4th.

Tax Professional: Robin D., Senior Tax Advisor 4 replied 7 years ago

Yes, the first contract is voided by the second. If your dates for sales contract or closing are not within the dates prescribed you will not be allowed the credit.

You must have bought - or entered into a binding contract to buy - a principal residence on or before April 30, 2010. Since you will be signing a new contract the old contract is not valid and that will cause you to miss the date required.

A taxpayer would have needed to have bought a house by April 30th 2010, knowing that closings take a certain amount of time the credit was extended to say that as long as you signed a sales contract by April 20th then they would extend the closing date to June 30th 2010.

If you have a change in your sales contract date to May then you will not be allowed the credit.

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