The prolonged government shutdown means non-essential functions of the federal government may not be happening for a while. When the government opens up again, whenever that may be, catching up on all those non-essential functions will take some time. If you are a home buyer or seller either in the middle of or close to a home purchase or sale, are there non-essential government functions that could derail your plans? Are there impacts from the government shutdown for home buyers and sellers?
The short answer is it’s possible there will be impacts from the government shutdown for home buyers and sellers. If the buyer is getting a loan, there are a couple areas of concern to talk to the lender about. If the loan is an FHA or VA product, there may be administrative delays. Regardless of the type of loan, it’s typical for the lender to request tax documents from the IRS. Those may document requests may see delays or potentially not available at all until the government re-opens. If the shutdowns continues for any length of time, lenders will surely come up with a work around to continue to do business. The government shutdown should not stop the loan for your real estate transaction, but it could certainly cause delays.
If no loan is involved, your purchase or sale should be able to continue on without a hitch. The federal government has no involvement with real estate transactions in any significant capacity.
Most federal taxes due from the sale of real estate are determined when you file your tax returns. However, you will need to pay any taxes the government is expecting from your transaction on time. The shutdown does not alter any deadlines. You will still face penalties if you delay payment whether or not they are there to collect the funds.
The bottom line is for both buyers and sellers to be aware of the potential for delays and to discuss those possibilities with the lender involved. If everyone is aware of the situation as soon as possible, buyers and sellers can make adjustments as needed to compensate for any hassles from the government shutdown. You should expect minimal disruption from the government shutdown for home buyers and sellers.
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