It has helped breathe new life into the housing market. And a lot of people are trying to get deals done before the deadline.
It is a credit aimed at first time homebuyers and it was supposed to end last November. But with the housing market still on life support then, the Obama administration extended the credit to now. And people who are thinking about buying their first home have just a few hours to get a qualifying deal done.
Belgravia Group is getting Red Bull and pizza ready for evening shoppers who they hope will come through their model suite ready to buy a unit in building where prices were slashed 25 to 40 percent a month ago. The balcony just helped seal the deal with a young client of agent Andrea Hebner's who, with the expiring tax credit, gets a $275,000 loft of 1,100 square feet with a bedroom and multi-purpose room and parking for 3.5 percent down.
"It is $2,000 out of pocket," said Hebner. "If you work the numbers it is less expensive to buy this unit than it would be to rent the unit."
Spurring such real estate activity in the wake of this recession was the purpose of the credit expiring Friday night. It offers up to $8,000 to first time homebuyers who make less than $125,000 annually or $225,000 for couples. It's money right off the down payment -- enough to push information technology specialist Roy Calayo out of his parents' home.
"It definitely helped. I was in the market to buy anyways," said Calayo.
"We needed a little help like having a flat tire. You call for a spare, we had the spare and we are rolling again, and I am very optimistic about the future," said Buzz Ruttenberg, chairman, Belgravia Group.
And so is Coldwell Banker, which is looking to extend the credit's momentum by offering up to $8,000 off homes it is listing starting May 1.
"Not only does the normal person who had the tax credit get this, this is available to every single person that is trying to buy a home. It is a great opportunity," said Chuck Goro, Coldwell Banker.
According to the commerce department's Census Bureau and the Department of Housing and Urban Development (HUD), sales in March increased 26.9 percent from February in anticipation of the end of the tax credit.
The deadline for the free money is midnight which means a deal has to be signed by then but the transaction only has to close by June 30. And the same applies to the $6,500 long time resident credit for existing homeowners.