Despite all her efforts to buy a home earlier, Nicole L. Payne found herself looking at properties Friday with a heck of a deadline looming.
If she could get a home under contract by the end of the day, the federal government would send her $8,000.
Later — nothing.
The Brooklyn Park resident joined last-minute homebuyers rushing to get in before the door closed for the first-time homebuyer tax credit, an incentive aimed at reviving a floundering housing market and helping the struggling U.S. economy.
Economists are still debating how well that worked, and whether the credit simply borrowed sales from the future at a multibillion-dollar expense to taxpayers. Congress, which unveiled the credit as a loan in 2008 to a tepid response, made it a cash-back keeper in 2009 and later added a $6,500 credit for certain repeat buyers.
Two months after the federal government sweetened the deal, contract-signing in the Baltimore region went on an upswing. Real estate agents rejoiced.
Then came Friday. The last day.
David Orso, Payne's real estate agent, was at another buyer's home at 7:30 in the morning for a contract signing. Then on to a settlement to close a deal signed earlier. When the Century 21 agent arrived in Brooklyn Park at lunchtime to show Payne several homes on the market, he had another settlement still to come.
"I said to him while I was signing my life away, ‘Did you get any sleep last night?' " said Judith McCarthy, his 7:30 appointment, who was hoping to get the repeat-buyer credit. "He said, ‘Actually, no, I had to get all these papers prepared for today.' "
Payne, 35, didn't expect to go down to the wire on the credit. She started looking three months ago for a home under $180,000, was outbid on one offer and made another that fell apart after the home inspection came back with problems. Now here she was, hoping to find a place in the credit's final hours.
She wasn't about to buy just anything for the money, but $8,000 would mean a lot. That's almost as much as her down payment.
"I would basically get my money back," said Payne, a supervisor in a cardiologist's office in Columbia. "Which would be wonderful."
She and her eldest son, 16-year-old Christopher, met Orso on Friday with a plan to see six homes. First on the list was a one-level cottage with an attic that she'd seen once before and really liked. The home had been on the market for more than a year. Asking price: $184,500.
"I love this kitchen," said Orso, walking through the airy space that looked as if it had been recently redone.
"It's awesome," Payne said.
The house had three bedrooms with potential for a fourth in the attic, enough space that she and her three sons could each stake out their own spots. It had a backyard big enough to run around in, too. But Payne wanted to consider her options. On to the next place.
It was a rowhouse that had recently been renovated, and looked it. Everything was clean and fresh. "This is nice," Payne said, smiling.
Crystal Mitchell, the owner, waited in the backyard with her dogs and hoped for the best. She said with a sigh that she was well aware of the day's significance.
"I was hoping to actually get the tax credit myself since I've owned this for six years," said Mitchell, a conference manager. "But because I haven't sold, I haven't been able to put a contract on anything."
As Payne followed Orso to the next home, the real estate agent was busily multitasking from his SUV, checking up on the status of his other buyer's contract. McCarthy wanted a bank-owned Annapolis condo — a foreclosure.
First-time buyers made an offer on McCarthy's home in April, so she kicked her home search into hyperdrive. Now she needed the lender to agree to her terms before the decision-makers went home for the day, or she'd lose the tax credit. But big banks are often slow to respond.
"It is now 1:15, so we have three hours and 45 minutes," Orso said, leaving a message for the bank's agent. "Let's see what kind of magic you can work — you're the man."
The single-family house he pulled up to, with Payne close behind, had a big tree in the front yard. Everything else was small. Living room. Bedrooms. Attic. Payne was back on the road in a few minutes.
The next place was also a disappointment: Neatly kept, but just two bedrooms. And the wood paneling on the walls? "Not lovin' it," Payne said.
She walked out to go to the next listing and suddenly decided she'd seen enough. The first house — that was the home for her.
"Let's get the contract done," Orso said. "Today's the day."
With the paperwork spread over the hood of her Volkswagen, Payne signed here, initialed there and drove off hoping the sellers would accept her $175,000 offer, plus a request for $7,500 in closing-cost help. It was less than the sellers wanted, and there wasn't time for a drawn-out negotiation.
But the homeowners' agent knew an offer might be coming and was poised to act fast. As Orso hopped back in his SUV, he promised Payne: "You'll hear from me in an hour or two."
Two hours later, he was jubilant. Payne's offer was accepted — he'd expected as much. But he'd also heard back from the agent for the bank, and McCarthy's offer was a go, too.
"It was a stroke of luck," said the lender's agent, Tom Richardson. He deals with many foreclosures as an associate broker with Long & Foster in Annapolis and knows better than to count on such a quick turnaround.
What happens to the housing market now is a subject of great debate. Some predict that so many people bought now rather than later that the market will once again slump after all the tax-credit deals have closed. Buyers have until June 30 to go to settlement.
Patrick Newport, an economist with IHS Global Insight, is counting on a decline in sales initially but thinks job growth will help later in the year.
"It's still a bad housing market, but it's going to get better," he said.
For Payne, what matters is that her family will have more space than in their rented rowhouse, and for a lower monthly payment than the rent on a three-bedroom apartment she'd been considering. She was already rearranging the place in her head Friday afternoon. Her boys were discussing what colors they wanted their rooms painted.
And McCarthy, Orso's other buyer, was over the moon. When he called her to say her contract had been accepted, "it was like, oh my gosh, fireworks," she said. The $6,500 will pay for window coverings and furniture at her new place.
After he brought the prized document to McCarthy for initialing, Orso headed off for one more settlement — finally almost done with a frenetic day to end all days.
"I'm not complaining at all," he said from the road. "This is a dream come true in what's supposed to be a down economy. I'll take it while I can."
By the numbers
Homebuyer tax credits claimed by Americans through the middle of February for purchases in 2008 and 2009: 1,795,429
Value of those credits: $12.7 billion
Number of credits claimed by Maryland residents: 29,298
Value of those credits: $206.5 million
Source: Internal Revenue Service