I am in no position to stand on a soapbox and preach a “How To” on revitalizing the real estate market. I can however let you in on today’s most un-secretive, yet still ambiguous headline that stands to be one of your greatest selling tools for 2009: The $8,000 First-Time Home Buyer’s Tax Credit.
With more than 300,000 buyers ‘coming off the fences’, one could attribute the recent industry uptick to several factors: a reduced inventory of agents which means a higher quality offering from those that remain; constant technological innovations serving to assist agents and streamline the closing process; the ‘21st Century brokerage model’, changing the game for both agents and clients; Zillow and Trulia; NAR/DOJ outcome; the list goes on and is highly debatable.
What we can all agree upon are the undeniable, long-awaited benefits of the $8,000 Tax Credit. A near-clone of the $7,500 Credit of 2008 (which was more of a low-interest loan, than anything), the $8,000 Credit is different in that it does not have to be repaid. Quick, read this article.
As you can see, I dare not exaggerate. The skinny on the $8,000 Tax Credit:
- $8,000 tax credit/refund available to first-time homebuyers (anyone who has not owned a principal residence in the last three years, and/or has/will purchase/d a home between January 1, 2009 and December 1, 2009.)
- Not to be repaid, unless taxpayer vacates residence within three years of purchase
- Taxpayer must make under $75,000 annually if filing alone; $150,000 annually if filing jointly with a spouse
Tax Credit cannot be used if:
- The home you purchased/received was purchased/received from a close family member
- Your gross income is above $75,000 if alone; $150,000 if filing jointly
- You have been in possession of a principal residence sometime on the previous three years
- The property you are looking to acquire will not serve as your principal residence
Those are just some high-level bullets as to the stipulations concerning the $8,000 Tax Credit. As you can see, it is fairly easy to attain, and applies to a large portion of America’s home buyers. The goal of the government in signing off on this Credit was to breathe some life back into the pocketbooks of our country’s consumers. Sale rates that have been free-falling since 2008 have since leveled off, and many buyers are now warming up their check-writing hands, looking for the next great deal.
Missy Caulk’s team had the right idea. The day that the false HUD comment was made (read this if you are unfamiliar with this event), one of Caulk’s team members decided to forward the information, along with info on the Tax Credit, to all of her home-searching contacts. Getting this Credit info in front of the eyes of home buyers is critical, and that’s where REALTORs come in.
The public needs to be aware and needs to be educated on the nuances of the 1st Time Home Buyer’s Tax Credit. Implemented wisely, this credit could be the deciding factor on whether or not some of 2009’s buyers will acquire a home this year. In many cases, the Tax Credit is equal or close to the full amount of a down payment. So, while the Credit cannot actually be used for down payments, it has served in many cases as a refund to the down payment. I’m saddened, actually, by the fact that I will not be able to take part in this great opportunity. Since I will not be buying a home before December 1st, 2009, I will not be eligible to receive a cool $8,000 from Capitol Hill. So sad…
However, do not let my missed opportunity be your clients’ as well. Get out there and get this info in front of them…the time to buy is now.