So, every agent in Cary and Raleigh and Wake County is trumpeting the $8,000 first-time HomeBuyer's Tax Credit. And we are all reaching out to first-time buyers to help them.
Well, the Tax Credit is great for Buyers who need to do something this year. It can make buying more palatable in a tough market, amongst incredible doom and gloom.
But, $8,000 is NOT a good enough incentive to get into a bad deal. $8,000 is not enough money to compensate for poor real estate advice from a professional Realtor who is supposed to represent you as a fiduciary.
First-Time Buyers, now, LISTEN UP!
1. Make the deal stand on its own. It must represent good market value, and be a home you would buy with or without a tax credit. Take the Tax Credit as a BONUS, not as a stepping stone that lets you buy something you cannot afford otherwise.
2. Listen closely when you are considering hiring an agent to represent you in the purchase of your first home. Be very wary advice that starts off, "Well, it's a little tight for your budget, but... you'll get an $8,000 credit on your taxes." Don't use the tax credit to help you dig a hole for yourself.
3. If you don't have cash for closing costs, be very careful about committing your tax credit as future payoff on a loan to cover closing costs. Make that tax credit be a bonus when you get it, not a means to cover debt incurred in buying a home.
4. When you get advice, ask yourself who the advice is meant to serve. Are you being pressed to buy a home in a rush? If the deal is not compelling, there is little reason to be in a rush. The Seller may be in a rush, like a builder who needs one more sale before the end of the quarter, so he needs closing quickly before the end of the month.
Or the rush may be to get a paycheck to the agent who is advising you. That is dereliction of responsibility, as the agent MUST advise you for YOUR best interest.
Bottom line?
Get great guidance and advice. Work with a real estate pro who is looking out for YOU. Get a great deal on your first new home. And next year, get a nice cash bonus at tax time!
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