ROCKLAND, Maine — Kevin Malmstrom and Rhiannon Dorin got full-time jobs, were engaged, bought a dog and, quite frankly, were sick of living in an apartment. The $8,000 new homebuyer’s tax credit, which ends today, was a big draw for the young couple, who got the full benefit.
“We weren’t sure we would qualify for a loan, but we thought we would try,” Dorin said.
First-time homebuyers had to be under contract by April 30 to qualify, but June 30 at midnight is the deadline for closing on the houses.
The House on Tuesday approved a bill would give buyers until Sept. 30 to complete their purchases. The extended deadline only applies to people who signed purchase agreements by April 30. The Senate is expected to take up the matter this week.
The two Rockland residents, both of whom work at a local coffee shop — Dorin as an assistant manager, Malmstrom as a roaster — did qualify and checked out about 10 houses in town.
“We had a pretty low price range, but in the recession, prices are low,” Malmstrom said.
This was typical of many people who used the tax credit program, according to Linda Gifford, who serves as legal council and spokesperson for the Maine Association of Realtors.
“Pricing is good, interest rates are historically low and there are lots of choices,” Gifford said. This, combined with the tax incentive, drew in a lot of young professionals, she said.
“The $8,000 piece, the first-time homebuyer tax credit, which was not tied to low income limits, definitely was targeting two-income, young, professional families,” Gifford said. “They are the ones who are looking to get into a home, are newly married and are trying to get into a home and get established and start a family, is oftentimes what we saw.”
People in similar circumstances as Dorin and Malmstrom made up a good chunk of the people who utilized the tax incentive, “maybe even the majority,” Gifford said. “This was definitely targeting those people who have been in apartments or living with a parent and saw this as a great opportunity to move into home ownership.”
Official numbers are not available, but Gifford said the trend in Maine seems to indicate a rush to the finish with the tax incentive. Interested buyers had to be under contract by April 30.
According to Gifford, April’s numbers of sold single-family homes shot up at the end of the month. April 25 saw 22 houses, the 26th saw 78, the 27th had 83, the 28th had 81, the 29th had 91 and by the last day of the offer, April 30 had 137 single-family homes taken off the market.
May 1, though? Back down to 15 single-family homes sold.
“Obviously people were rushing, rushing, rushing to get under contract, then it just ended,” Gifford said.
Dorin and Malmstrom closed in August 2009, avoiding the rush.
After looking at lots of wrong houses, they finally found the right one.
Dorin called her old cape on the north end of town “big and ugly,” so the two have been working on beautification since they closed on the four-bedroom property.
“Everything is in really good shape, but it is really ugly,” Dorin said.
Dorin and Malmstrom admitted that beautifying their house has taken up some pocket money.
Malmstrom said he acquired a lawnmower, a toolbox and an entirely new skill set through the repairs.“It was a little overwhelming at first because it needs a lot of cosmetic work and we are not very experienced,” Malmstrom said. “I was going on YouTube to figure out how to change outlets.”
Dorin and Malmstrom said they recently got their $8,000 check for their big purchase. They plan to use the money for new siding for their home. Or for their wedding.
Gifford said this was partly the goal of the government — to give homebuyers the ability to make purchases in other industries.
“It was a cash motivator. It was also hoped that they would turn around and spend it,” Gifford said. “It is not just the house they buy, it’s the new refrigerator, it’s the carpeting, it’s the landscaping. It’s all of the other things they spend money on.
“These are young, first-time home buyers. They aren’t going to put this in the bank — they are going to spend it,” Gifford said.
The two said the process for getting the refund was easy. They went online, printed off a form, signed it and sent it along with their taxes.
A month and a half later, they got their money.
For now, the two live in the house they are fixing. Their clothes are in bags and their belongings in boxes — but it is theirs — which is the whole point, according to Malmstrom.
“I wanted my own house by 30, and I did it. It seems surreal,” Malmstrom said.
“I think we will look back and remember we bought at the right time,” he said.