What is the reason that real estate tax credits are limited to first time homebuyers? It doesn't make any sense to me.

Real Estate Broker/Owner with Richard Weisser Realty

Federal Tax creit Illustration ...Southern MansionAt first glance, it seems like a wonderful idea, to provide an incentive for first time home buyers to get a refundable tax credit for purchasing a home. But what is the logic in applying this credit to first-time buyers only?

After all, first time home-buyers are the ones most likely to default on their loans. They have little or no experience with maintaining real estate or making adjustment for increased real estate taxes or hazard insurance.

Isn't this one of the problems that got us to where we are? The simple fact that someone can buy a home and put a wad of cash in their pocket is just another invitation to disaster.

If the government really want to open the real estate market, the credit should be allowed across the board, There are many sellers right now who might be able to sell their homes if they knew they could recover a potential net loss on the selling side with a credit on the purchase of their next home.

Think of the possible foreclosures that could be avoided, and how much activity would be stimulated in the resale market. When the bottom line is improved, many would be motivated to action.

So let's not repeat the mistakes of the past. Let's put this money where it will do some good ... with experienced homeowners that might just need a little subsidy to avoid a shortfall.

If this credit were applied across the board, I believe the market would recover in six months.

All content, including text, original art, photographs and images, is the exclusive property of Coweta Fayette Real Estate, Inc., and may not be used without the expressed written permission of ERA United Realty and Coweta Fayette Real Estate of ERA United Realty Newnan Georgia. All information is believed to be accurate but is not warranted, Copyright 2003-2009. Richard Weisser 770-827-6225.
Learn more about Coweta County and Fayette County Georgia Real Estate, and to search the entire Georgia MLS for free with no registration required visit CowetaFayetteRealEstate.com!


Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Yvette Gardner 03/28/2009 08:49 AM
  2. Jean Terry 03/28/2009 10:29 AM
  3. Barbara Martino-Sliva, Top Producer 03/30/2009 02:03 PM
ActiveRain Community
The Lounge at Active Rain
Dedicated Bloggers
Club Chaos
Diary of a Realtor
richard weisser
coweta fayette real estate
newnan homes for sale
refundable tax credit
800 tax credit
tac credit

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Barb Szabo, CRS
RE/MAX Trinity Brecksville Ohio - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

Richard, All I know is that I have ready willing and able buyers ready to buy but can't because we cannot sell their back up house. One seller even said to me if he had been eligible for the credit he would be more willing to take a "hit" on his current home.

Mar 28, 2009 08:46 AM #67
Mike Russell
Mike Russell & Associates - Overland Park, KS
Overland Park Kansas Real Estate

because they are democrats and heaven forbid any body get relief that doesn't fit their poor and dienfranchised motto.

Mar 28, 2009 08:53 AM #68
Patricia Aulson
Realtor - Portsmouth NH Homes-Hampton NH Homes

Point well taken...I agree with what your blog says.  There should be a credit for buyers, first time or otherwise.

Patricia Aulson/Portsmouth NH Real Estate

Mar 28, 2009 09:32 AM #69
Norma Brandsberg
Marks Realty Co. Inc., Lynchburg, VA, 540-586-9496 - Forest, VA

I'm sure the reason is that the move up the food chain in a recession normally starts at the bottom, with or without the tax credits. When a first time buyer buys a home, that frees up the next in the line to buy without a tax credit.

If we want to spend as little as possible, this is the way to do it.

Mar 28, 2009 09:36 AM #70
Cameron Wilson
Labrum Real Estate - Murrieta, CA
The Short Guy - Murrieta,Temecula,Menifee Californ

As Norma stated before me the first time home buyer drives the market and uncle sugar is trying to allow the market to run it's normal course. Hmmmmm........

My opinion is they should run it across the board to help the market shake out quicker and return to normal as fast as possible.

Mar 28, 2009 09:55 AM #71
W Paul Blakey
The HomeTeam Inspection Service - Sechelt, BC

I think tax credits for first time buyers is the same as those credit cards that offer you a low interest rate for the first few months before they raise them to 19 percent or whatever. The point is, they want to get the consumer hooked, after that it's all fresh meat.

Cynical ... who me?

Mar 28, 2009 11:57 AM #72
Sheldon Neal
Bergen County, NJ - RE/MAX Real Estate Limited - Maywood, NJ
That British Agent Bergen County NJ

Very good point Richard - seems so simple !

.... ever think of running for government ??? LOL

Mar 28, 2009 11:58 AM #73
Cristal Drake
Prudential California Realty - Fullerton, CA
Realtor - Fullerton Real Estate

Amen Richard!  I know SO many people (including myself) that when things started to turn, they realized they would have a tough time keeping up with their current mortgage, sold their home and rented for short term.  We did buy down after a year but it would have been nice to get something out of being responsible.  People buying homes gets things moving..that's for sure so let's give them the incentive!

Mar 28, 2009 01:06 PM #74
Paul Aragon
Coldwell Banker- Greater Valleys - Porter Ranch, CA

All for one and one for all...well...at least for this topic. I agree that the government is losing some of it's steam in a bypass valve by only limiting these programs to first time buyers when many previous homeowners are FULLY capable of doing their part to stimulate the economy. Why not let the floodgates open temporarily to allow some of that stagnant water to leach!!

Mar 28, 2009 01:53 PM #75
League City, TX - Worrell Team, REALTORS, GRI, CNE
RE/MAX 1st Class - League City, TX

Richard, I totally agree.  At least it is also helping non-first time buyers sell.  And it's helping Realtors.  If you offer 8 grand to everyone, that would be a huge amount of government spending when there has already been a huge amount as it is!!!

Mar 28, 2009 02:30 PM #76
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

Interesting thought. I guess the thought process starts with the first time buyers beginning the chain that follows up the price ranges and helps everyone.

Mar 28, 2009 03:16 PM #77
Harold "Hal" Benz
Keller Williams NJ Metro Group - Montclair, NJ
CEO/ Team Leader

Hi Richard,

Yes...a broad based credit would certainly get things moving more quickly...and I would love to see it. But under the current credit scrutiny, I don't agree that first time buyers create a greater risk of default. And it's well documented that the first time buyer starts the dominoes falling that facilitate other transactions. So while the government didn't get it completely right, I still appreciate the effort.

Now if they could only grandfather those folks who bought last year. Repaying the $7500 really hurts in light of the current rules...

Mar 28, 2009 03:30 PM #78
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

What heppens when the tax credit expires?  Do homes across the board drop by $8,000?  Frankly, I don't think it is a good idea to expand the tax credits. 

Mar 28, 2009 03:33 PM #79
Tony Orefice
Wilkinson and Associates/www.TonyOreficeRealtor.com - Harrisburg, NC
Realtor/Harrisburg NC,Concord NC

Hi Richard,

my!, you certainly have made alot of people think about this one! I agree, the credit should go to everyone.

Mar 28, 2009 04:06 PM #80
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

Richard, glad to see you are back on your game and out of your funk! This is exactly what this economy needs along with a loosening of the credit. People with 750 credit scores shouldn't be held up by the banks internal bickering.


Mar 28, 2009 05:26 PM #81
Laura Higgins
ERA Advantage Realty - Sebring, FL


Like Christina I am going to also defer from the general comments.   The American Recovery and Reinvestment Act of 2009 applies to homeowners who have not owned a home for three years.  The tax credit is based on 10% of the purchase price up to $8,000.  Additionally, the tax credit is determined by their income, so they may receive the money as a refund when they file their tax returns.  This will also assist in stimulating the economy as people receive their tax refund checks.    This money does not have to be repaid to the government as did the previous tax credit initiative. 


Mar 29, 2009 12:09 AM #82
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

More general comments...

This post isn't about the limitations or definitions of the current legislation... that has been covered ad nauseum and we are all aware of the parameters... it is about applying the credit across the board ...

If it's a good thing ... then logic says it should be expanded to all sectors of the market.

Mar 29, 2009 02:36 AM #83
Mark MacKenzie
Phoenix, AZ

I have been writing about this concept for months.  I agree that we need to provide an incentive to all buyers, but more specifically for people to invest in real estate.  We need new demand into the market, not just move up buyers.

As we are seeing, not surprisingly, first time home buyers have not been responding to the $8,000 tax credit.  Mortgage purchase applications are still very week.  I think a lot of people have overestimated the ability of the first time home buyer to get a loan in this market as well as their motivation to do so when property values are falling 15% and 650,000 jobs are being shed every month.


Mar 29, 2009 02:52 AM #84
Dr. Stacey-Ann Baugh
Century 21 New Millennium - Upper Marlboro, MD
A doctor who makes house calls.

I think that would have been great.  There are many other incentives for first time home buyers but we also need so move-up buyers to get some of the more expensive stuff sold.  The fact that the income requirement is so low doesn't make sense to me either.

Mar 29, 2009 09:06 AM #85
Steve Blaisdell
Beach Realty and Construction - Nags Head, NC

Here is my 2cents-

   The government folk putting this so called stimulus togther know NADA about business cycles & business in general . It's ovbvious that there are not many with Econ 101 under their belt- They do have an agenda for sure - Stimulating real estate sales or any other private business is nowhere to be found in the "Stimulus" plan- Shovel ready jobs are on the way though- as long as you are in a Union!! -- Line up comrades  !

Mar 31, 2009 04:49 PM #86
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Richard Weisser

Richard Weisser Retired Real Estate Professional
Ask me a question
Spam prevention

Additional Information