Time is running out to take advantage of the extended (and expanded) home buyer tax credit. The $8,000 credit is still available to first-time home buyers – but it’s going away very soon. And those of you who wait until the last minute might not find a home at all when the feeding frenzy begins as the deadline nears.

“First-time home buyers” who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. To qualify as a “first-time home buyer” you may not have owned a home during the past three years.

Current homeowners are also eligible for a tax credit up to $6500, so long as the home being sold or vacated was their primary residence for 5 consecutive years within the last 8. You don’t have to sell your existing home, but you must occupy the new home for three years or risk recapture of the credit.

The maximum allowable credit for first-time home buyers is $8,000 or 10% of the sales price, whichever is less. Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit. The credit decreases for higher-earning homebuyers. Single homebuyers earning more than $145,000  and couples earning over $245,000 aren’t eligible.

To qualify, you’ll need to have a written binding contract to purchase in effect on April 30, and the deal must close by July 1, 2010.  Those buyers who are waiting until the last minute are going to be competing with all of those other buyers who made the same mistake!

The market hasn’t slowed down much at all. A few people are still sleeping off the holiday spirits, so those who are shopping now are getting offers accepted a bit more readily. I’m busier than I’ve ever been during a holiday season, and I expect sales to continue to rise. So much for the winter slow season. As buyers realize they can’t wait any longer if they want the tax credit, we’ll see more competition for an already-short supply of REOs.