First-time home buyers looking to take advantage of a tax credit need to watch the clock.

People should have mortgage negotiations settled by mid-October at the latest if they want to close on the sale by the deadline to qualify. First-time buyers can get a federal income tax credit of as much as $8,000 for homes purchased before Dec. 1, 2009. That means sales must close by Nov. 30.

"You've got to get into the game now," says Greg McBride, senior financial analyst for Bankrate.com, because it can be 45 to 60 days from the time you get approved for a mortgage to the day you close on the sale.

To speed a home purchase along, it's best to be pre-approved for a loan before you start house hunting. And expect a rush of last-minute applicants to create a backlog for mortgage companies and potential lenders, says Mr. McBride. "You're probably going to see a mad dash for loan closing."

The home must be the in the U.S. and must be the buyer's principal residence for at least three years.

To get the full credit, married couples filing jointly must have a modified adjusted gross income of $150,000 or less, while single filers must make $75,000 or less. The credit is phased out after that.

For more information, visit www.irs.gov. (See the Starting Out column for the pros and cons of buying vs. renting.)