Lots of people have been asking about when do you have to have a deal signed and then when does it has to close to be eligible for the $8000 tax credit.

I am not an attorney nor do I play one on TV.  This is what I have read and heard from my mortgage broker friends.

A buyer have a fully executed contract in hand by April 30, 2010 for the transaction to be considered eligible.  Then the deal must close by June 30, 2010 in order to take advantage of the first time home buyer tax credit.

The primary key here is that you need a “fully executed” contract.  The typical REO or retail sale that gets done signed by April 30 should have no problem skating across the finish line.  Conversely, I bet most short sales will not make it.

Many short sales will agree to your offer, sign it, send it to the bank for approval and then wait.  If you as the buyer do not receive a signed copy, you do NOT have a fully executed contract in the state of Minnesota.  The way to fix this is to demand that the seller sign the contract and give you a copy, but make it contingent upon bank approval.  The contract can still be “subject to bank approval” for it to be binding and fully executed.  That is simply a condition of the contract like an inspection contingency.

I know you don’t want to hear this, but I believe that it is already too late to make an offer on a property that is a short sale and get it through the bank’s short sale department before June 30.  Some agents may disagree, but every short sale I have been involved in takes at least 4-6 months to close.  You would have needed to get an accepted offer on one January 1 or earlier to feel good that it will probably close by June 30 (even then it is a crap shoot!).