We all know about the impending November 30 deadline for getting a transaction completed for eligible purchasers to qualify for the federal tax credit.
Realistically, if a house is not under contract as of today, it probably will not close in time and the chances are that the opportunity to get the first-time homeowner's tax credit in its current form will be lost.
However, the market is not robust enough to support a complete recovery without incentives, so it is likely that some new opportunities will be created for buyers. In the meantime, we are in no-man's land until something concrete is enacted.
And so we wait ... and hope!
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I agree that some incentives need to be in place. However, I have trpedations about the $8,000 tax credit. My gut tells me it has the potential to creat a bubble of artificial demand.
Thanks for sharing your thoughts. I think it is time for some fresh approaches to incentives. Best wishes for continued success.
Syreeta...
The fact of the matter is, that I wish it had not been set in the first place. My preference would have been a loan of some kind, but you have to weigh the long term detriment of increased national debt against a total collapse of the real estate market.
I don't know what the answer is.
Richard:
There is a lot of controversy surrounding this issue and many people have argued that it needs to be ended due to its enormous cost, However, I see it as a Pandora's Box that has been opened and it is going to be difficult to close it now without some severe damage to the real estate market recovery. I predict there will either be an extension or another program put in its place. They will be too afraid to do otherwise.
Hi Richard,
I just had 2 listings go under contract this week and the inspections were done immediately, the appraisers are coming out today and the lenders assure me we will be closing November 12th and 18th of November. Both loan officers I trust and know how to keep on top of things. These buyers will be closing in time to get their $8K tax credit. If it is not a short sale or a foreclosure it can still happen WITH the help of a seasoned loan officer. If it's the end of next week it will be done with a prayer! I agree with your thoughts about additional incentives, we offered a $5K bonus to the buyer for closing costs and got an offer on a home we've had on the market for some time. Creativity in attaining a win/win is crucial in today's market. Thanks for a great post!
Something will be rolled out in due time. There's planty of buzz about extending the tax credit, increasing the dollar amout, and even making it available to more folks, not just 1st timers.
And, I agree with your statement: "you have to weigh the long term detriment of increased national debt against a total collapse of the real estate market." 100%
Richard,
There is a some talk about creating a new tax credit of $15K for everyone, not just 1st time home buyers. Right now the market is selling about 5.2M houses a year nationally, give or take. That would equate to a 78B incentive. Not going to happen.
The government is creating an entitlement society, and the reasons are political, not economic.
Rich
It's hard to say what is going to happen and when it will, but for now, all we know is that the current credit is slated to go away.
Richard: I hope they extend this thing if for no other reason than to relieve some of the pressure my buyers are unde.r Still writing offers, not under contract. And it's not for lack of trying.
Richard - I think the best incentives will be those that put people back to work. Put the tax credits where they will generate jobs. But I did see that there is at least a bill to extend the credit for military overseas. That is a very good thing. I am hoping that passes.
I currently have two seperate clients FRANTICALLY looking to close in time. I'll tell you what, they better be very organized because it won't get done in time unless they are. Many buyers don't realize that their speedy, accurate cooperation is vital to a smooth process, that the outcome lies heavily on their part.
Rolling with the puches is what this job is all about. Folks will always buy homes and get mortgages. I just need a small slice of the pie.
Good post
Tony
Hi Richard.
However, the market is not robust enough to support a complete recovery without incentives, so it is likely that some new opportunities will be created for buyers. In the meantime, we are in no-man's land until something concrete is enacted...
I must say I couldn't disagree more...
Ken
Richard - I hope they extend the homebuyer tax incentive for at least another year. If our real estate market totally collapsed, this would be disastrous....especially given the record-high unemployment rates.....whose idea was it to let companies shift all those jobs overseas AND get a tax benefit for doing it? YIKES!
Richard - Whether congress extends this credit or invents another there needs to be some incentives put into place to address our unemployment crisis. Nothing like healthy buyers with a job to bring the machine back to life.
Richard... I agrre with your first comment about it being a loan. The way it was set up in the first place where it was $7500 and you paid back $500 a year was a much better idea in the long run.
Richard my theory on the housing recovery has to do with the jobs market getting better not the expiration of a housing incentive tax credit. I still see the jobs area going the wrong direction. Maybe in early 2010 a bottoming out?
Richard,
I am thinking that we will not be hearing much about another tax credit for home buyers until after the first of the new year. The White House at that point will have enough of the health care issue out of the way and going on to ohter things.
Richard - Thanks for the post. You are right! We keep looking and waiting. My guess is that they will not bring anything out until after the holiday!
lots of rumors out there my guess they will wait until the 11th hour to approve any extension.
Roy...
Thanks my friend, I really appreciate it!
Claudette...
After all, they ARE politicians! THX
Dorie...
I know you'll make the deadline! Because it NEEDS to! Thanks for chiming in!
Richard - There are still opportunities out there that can close before the tax credit expiration date. For example, deals with seller financing, developer financing deals, etc. But, I agree with the premise - get on the stick before it is gone.