There have been talks about the possibility of asking Congress to extend the First Time Home Buyer $8,000 Tax Credit. I, for one would love to see this pass.
The lower priced range homes in my service areas (greater Frisco TX) less than $300K have been selling as hot cakes. The Sellers are finally pricing their homes correctly. The interest rates have been historically low. This is a perfect heaven for home buying in the greater Frisco TX area. This is definitely helping the housing market like it was intended.
In addition to extending the First Time Home Buyer $8,000 Tax Credit, Congress, please expand the tax credit to include ALL home buyers - not just first time home buyers. This will definitely spur our local economy, and all the related businesses thereof.
Expansion to this tax credit to include:
$15,000 tax credit, not just $8,000
For ALL home buyers, not just first-time
Extension for 1 more year - into December 2010.
There are good deals to be bought here in greater Frisco TX areas. However, with the timing to coincide the current tax credit, buyers are no longer looking at short sales and foreclosure properties for fear that the dateline is not met.
If you are a first time home buyer looking to purchase, you should get in position on a contract by early October unless Congress extends the First TIme Home Buyer $8,000 Tax Credit.
We need as many people as we possible can to take action to ask Congress to extend and expand this First Time Home Buyer $8000 Tax Credit.
Please click here to submit your request for Plea here.
Super-serving Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets, Dallas White Rock Lake area communities and other surrounding areas.
89 Comments on Would Congress Please Extend the First Time Home Buyer $8,000 Tax Credit?
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2009
Loreena – my sense is that it will be extended …likely even enhanced. I understand the vote is scheduled for early October. Great Post … with a Call to Action! Thank you!
Hi Loreena, I agree with you on extending the first time home buyer tax credit (although I doubt whether our nation can afford $15K for every home purchase).
In Monmouth County NJ, sales under $300K have been very brisk all year, and driving the market as they cause a ripple effect up through the higher price ranges.
I've already sent the letter in your link to my Congressperson and Senators. Thanks for posting this so everyone else can do the same!
I agree with an extension and expansion. Although in the interest of increased taxes for everyone I think the 8000.00 is more than enough of an incentive to keep buyers interested. I'd like to see this get passed about mid November. Everyone would already be under contract with settlement dates in place for the current tax credit, which would spur a new wave of business going into the holidays.
I don't want the US to be a simon says society where the government says "jump" and we say "how high." We are becoming robotic toward government rebates and programs.
For example - Homebuyer tax credit, cash for clunkers (freaking stupid), and now the tax credit for appliances. Give me a break with all this.
David - Like you, I do know how you feel about all the tax credits proposed. I'm sure the car man thinks the cash for clunkers are awesome and the Maytag guy thinks the tax credit for appliances is super smart.
But I do feel that it will take the housing market leading us out of this economy. It will be one of the first signs of market recovery - which is what this tax credit is going.
Loreena, the dilema is we all worry about government spending. But when a cut comes at our expense we do not want it. I think the credit should be extended but i would be two faced to march in a tea party and support a govt give back. Yet I am sure there are a lot of folks there that do
I just wanted to comment that I liked your signature at the bottom. As for the extension, it would be great to see it, plus those adjustments you asked about.
John - Something new. As you can tell, I have a few extra minutes on my hand. I also uploaded the HD profile pic. Not sure if you noticed. They (AR) sure know how to bribe us for some extra points.
Perhaps there can be a compromise - if you are under contract to buy a home prior to the deadline (short sale...) that has taken longer than planned then you receive the credit once it closes?
Hi Loreena, the current tax credit has certainly gotten the attention of first timers in the Birmingham area. I would love to see it extended and enhanced to include everyone!
I agree that a recovery in housing will be the thing that leads our overall economy out of this recession. I also believe that an extension to the tax credit and an expansion to include all buyers are both important steps in that direction. However, I'm not sure about an expansion of the tax credit to $15,000. I, like many, am worried about government spending/deficits. I tend to think Congress should probably just do the extension and inclusion of all buyers for now and then re-evaluate after 6-12 months.
By the way, NAR just released a "call to action" which makes it easy for Realtors and others to let their representatives know their thoughts on extension/expansion of the tax credit. Click here to go to that page to Realtor.org and take action.
Loreena, if they do it like they usually do, it's unlikely that they'll take action before the current bill expires. Then they often make whatever they do retroactive.
I disagree... The market needs to find a bottom, or all of the propping in the world is only going to backfire and make things worse later. In the mean time, we are foisting off bills on our kids.
I think some kind of extension would be good, but I am not sure they will do it. After all Cash 4 Clunkers was a great success and it didn't last long.
I would like an extension of the $8,000 Tax Credit for First-Time Home Buyers until December 31, 2009. Loans are taking longer now, something that was not the case six months ago.
I think that a smaller tax credit would be appropriate for al other buyers, but only for a short time period.
Why do they need to extend it? There has been almost 2 years of some kind of government handout to first time home buyers. Everyone has had the same opportunity at the money it is time to end the handout. We need to get the welfare mentality out of housing.....it is what got us here in the first place...everybody does not deserve to own a home.
I'm with Lane. I think that an extension may be creating a bubble of artificial demand. I used to be in favor of the extension but I do think we need to tough it out and find the true bottom.
I will go against the grain, I do not thank they should extend it,or ever had it in the first place. People need to learn to save. Our tax dollars should not be used this way. It is only a short term fix. and in the long run just hurt us more. Sure we will sell more houses. But what is the long term affect of this. If the goverment wants to help , Put people back to work. Let companys have a tax break to creat jobs here in the USA. How is it fair for someone that has not owned a house for 3 years to get free money, How about us people that do with out to have what we want. 3.5 percent down will get you into a home in most cases, If you do not have that much saved toward a purchase , what will you do when you ac goes out, Ask for a hand out. I will get off my soap box, but I vote no on the hand outs, I guess since I have to pay 40% to the tax man makes me very concertive when it comes to band aid economics
Please don't, Congress...please don't extend the bribe. The tax credit is a bribe to get people who would have otherwise not bought homes to buy them at artificially high prices. Furthermore, that bribe will have to be paid by my daughter, in 20 years.
If we learned anything from the Depression it's that price declines are going to happen; Gov't intervention delays the inevitable. The only people benefiting from this bribe are the housing industry participants (like me). I said it before and I'll say it again; stop bad practices to appease a bunch of REALTORs and loan originators.
I'll take it one step further and ask REALTORs (and loan originators) to stop encouraging institutional theft to line our pockets. Please get the Gov't OUT of our businesses as quickly as possible so that we can finally roll back the tide of Collectivism this recession is inviting. If we continue to trade freedom for band-aid policies, we're all going to end up slaves in a decade or two.
If getting $8k is the tipping point on someone's decision on wether to buy a home or not, then I personally think we have way more problems than we think. Really, I'm going to make a huge family decision to commit myself to a mortgage, and to move the family and live in a new place for 8K? Really? Let's get this market moving without the goverment handouts. It will make for a much stronger foundation.
I am praying that the tax credit will be extended, increased and offered to all home buyers. Some of the government money needs to continue to stimulate the real estate market.
I gotta tell ya....I think I am gonna go with America's #1 Mortgage guy up there. I don't think we need anymore government in our lives. I also do not believe that the tax credit is going to make that much of a difference at the end of the day. People still will buy houses.
I'm glad that this post brought some different viewpoints to the topic and I do hope that Congress gets to evaluate both sides of the fences.
I also dont want to pretend to know something (perhaps I should) but I dont. I hear how this will cost our children future tax dollars. But could someone show me mathematically how does that happen? (I'm not saying it's not but I want to understand it).
One side of the argument has always been costing our children and grandchildren tax dollars. I'm not saying if we dont do it from the housing industry, isn't someone or some time this would happen? Again, I'm not saying if it has to happen, be it the housing industry, but I still honestly think that the housing industry will lead us out of the recession and the tough economic times.
@ Darrell - I think your suggestion of government helping put people back into their jobs. Again, I wont pretend like I know, but somehow if we could give incentives to corporations who do not lay off their employees - they should be the one rewarded.
@ Andrew - The $8K back has definitely been one of the reasons why some home buyers (some of the ones I serve) make the plunge sooner rather than later. I also have started working with a buyer who says that if he cannot get into a contract by mid-October, that he would no longer be interested in purchasing a home - at least not now. But sometimes other factors do speed some of our decision-making. Again, this decision is left for each individual home buyers. I also have some clients who decided to hold off home buying because they think they will be in much stronger financial position should they wait.
There are a lot of buyers in the market right now soley because of the $8000 tax credit. They still have to qualify with the much more stringent credit guidelines that are required right now. My opinion of the Tax Credit... Love - Hate. I'm good either way, and I am not staking my career on it.
Loreena... talk about boosting the economy.. Extending the first time buyer tax credit to ALL buyers for the extended period will have a HUGE impact. Not to mention$15,000 to boot.. You got my vote !
But could someone show me mathematically how does that happen?
Loreena, let's say I'm trying to sell record players (remember them?). They're still functional but not necessarily useful. I could, if I bribed enough people with tax credits, convince a lot of people to buy record players but at what expense? The money I used for the bribes could be used for other government expenditures (although most of them are anti-capitalist, too).
So, I propped up the record player industry but sacrificed future tax revenues. The Government spending hasn't gone down, so someone has to pay for it; it's added to the deficit so the Treasury Department borrows money through bond issuance. The interest the Treasury pays on those bonds saps more money. Eventually, our children will have to repay those debts through higher taxes.
It's just like balancing your family budget. If you don't do it right, you'll leave your kids with huge bills to pay. When you encourage the Government act irresponsibly, you're doing the same thing.
Great post, great comments. Instead of giving the free money to the big ones they should have more programs for the consumers. They don't have any feeling, sense ... It's like a video game or monopoly game.
I am torn on this issue, the program has definitely helped my business this year, but at the same think it needs to go away for the sake of the future. The recession is not nearly as bad now as it was when the tax credit was introduced. The idea of expanding it doesn't make any sense.
@ Brian - I followed you until I lost you again in the last paragraph.
On a personal note, if I passed on, any debt I still owe is paid by my estate. If I dont own anything, the debt dies with me.
I'm not trying to be difficult here but I "kinda" can see your point.
At the same time, there are lots of other "worse" off government programs that are worse to our national expenditure than allowing the housing tax credit. I'm not trying to bring another subject up but look at the serial generational of HUD's Section 8 housing. That cost more than $8K per household.
Thanks for cooming back to continue to share your thoughts. I do appreciate it.
On a personal note, if I passed on, any debt I still owe is paid by my estate. If I dont own anything, the debt dies with me.
Okay, let's assume I was disabled instead of dead; I'd REALLY sock it to my kids if I didn't balance my household budget.
(I'm not trying to be difficult either but I'm trying to illustrate financial planning concepts in the dramatic)
At the same time, there are lots of other "worse" off government programs that are worse to our national expenditure than allowing the housing tax credit
That's the slippery slope. Adultery isn't as "bad" as murder but both are sins.
Loreena... I am torn that I have only read about 5 comments that are opposed to this. It also stinks because I wanted to be the first to disagree... lol Seriously nothing against you, I find that you are a great blogger... and I left 2 long comments on Lane Bailey's blog, that is opposed to this. And I didn't read Brian Brady's 2 comments yet, because I didn't want his comments to influence my thinking. I respect Brian Brady and from knowing him and his background, I would bet he is partially against this, or maybe 100% against this. I just wanted to give my professional input first. Besides, there have been times when we didn't see eye to eye.
Overall, this tax credit is a phantom reason for the housing market to it's recovery. Yes, it has helped in some areas and in some cases, but are you looking at the near future and or the long term? Isn't that the thinking that got us in this mess, not worrying about the future, worrying about now, what can we do now? I think so...
On another note, how long has these tax credits been taking place? I would bet that many of these people that bought in the past, had plans of buying before the tax credit. This was a great incentive. So, why extend it, if not everyone has taken advantage of this? Why are some people saying that there is a mad rush now? Besides, I am more worried about my future and my nieces and nephews, who will be burdened with this expense.. yes, because who is paying for this? Where is the money coming from?
In regards to raising this to $15,000? WHY?? Seriously, the $8,000's worked and was good enough. Do you really think that another $7,000 is going to open the flood gates? You need money to buy first. In most cases, in most states, you still need the initial down payment. And to those that waited, gambled on hoping that it would go to $15,000... SHAME on them... I thought buying a house was a need... to have a home... a place to live... to support a family, and not to get money for doing it.
Here is part of what I said in Lane's blog...
Now, what would really tick me off is if they continued it, but by raising the limit to $15,000. If this happened, how about all politicians giving up their lifetime health care and pensions? Okay, maybe not give it up, but have to sacrifice a certain percentage. We will suffer, they won't, because they are protected... that really ticks me off.
Overall, I don't claim to be right, this is just my opinion, but can you give at least a few examples to why this would be good to extend it, even though this has been going on for almost 2 years, but you can't use the answer... "it will help the housing market". Can you come up with anything else? Because here is my thought on this... will it help the housing market? Yes, I do believe that part of the economy is dependent on the housing market. But there are other areas that we really need to work on. How about Jobs? Unemployment? What if many of these people buying lose their jobs then? Then what? What happened to all of that money for the tax credit? Poof... gone... and then what? Just food for thought..
My plea to the public, to congress, and to realtors... let's think this through first and not extend just because it sounds good. Besides, is this just another way for Congress and Obama to buy their votes for a re-election? Now off to read Brian Brady's comments and the 4 others that are opposed to this. thanks
Yes, yes, yes! Way too much demand and not enough supply now. People/buyers are doing everything they can, submitting dozens of bonafide ofers and still not getting into escrow. So dear Uncle Sam, quit bailing out companies and start helping American citizens.
Hi Loreena! Congrats on the feature! And, yes, some of our buyers ARE living on the 'edge' by not making a decision now--it's going to cost them $8K if they don't get off that fence SOON!
Loreena... I finally read all of the comments. What kills me and our market is that those that agree with your blog, just agree, with no added information to as why. And if they do add something, all anyone says is, that it will help our housing market. Okay, here is a question for all of those that say this. How will it help the housing market? Eat up inventory? But a year later, 30% of them go into foreclosure then? How can I say this? Maybe because we didn't put this money to good use in helping the unemployment market. Sure, we can partially argue that buying new homes helps create new jobs. .. but enough? As someone mentioned, what about trying hard to keep jobs in the United States? How about shrinking those huge benefits that I mentioned, to those employed by the gov't, especially those of congress.
Brian is right, about passing this debt onto our kids and possibly their kids. Look at our deficit now... how do you think this happened? From printing paper, money on paper, that has to be paid back. At each election, every person talks about cutting our deficit, but once elected, they all spend more money than we have. The printing presses in this case need cold water to keep them cool, because they are burning up from the money being printed. So much money can only circulate. We have flooded the market with IOU's... Look at California... they are beyond in trouble because they owe too much money, yet they want to hand our so-called promissory notes, IOU's...
Jean Hanley made this comment above... "I also do not believe that the tax credit is going to make that much of a difference at the end of the day. People still will buy houses."
I agree 110%.... people will buy anyhow..people have always bought... we worked our way out of the great depression. Maybe more people need to go back and study this era. This is just a quick fix to get us to think this will help more than it will hurt. Yes, I think it did help some, but continuing this is not a responsible solution. Just my opinion... back later, I need to go to sleep.. lol
Loreena, I believe the $8000 credit will be extended probably after the first of the year as Dec. is usually a slow market any way. By having the cut off day in 2009 for the Tax Credit it takes those buyers on the fence and pushes them to purchase now which is stimulating the market. This has been a good thing having the cut off date.
As for many more buyers in foreclosure I don't agree as the new buyers today in this market are going thru a very tough underwriting process (as it should have always been) and unless they loose their incomes the foreclosure rate on these new buyers on the stricter FHA and CONV underwriting guidelines probably won't result in foreclosures.
I believe this has been a great tool in helping the market and we most likely will see a new timeline for 2010 or until the numbers are right in Housing...
Wow, wow, wow! I REALLY appreciated the insight from all of the above comments. Jeff Belonger made a great addition to the conversation above, truly allowing us to see the "other" end of the spectrum. As Realtors, it is important to be educated and attempt to see the full picture. If we only believe what NAR or the local evening news says, wouldn't we be in a world of hurt!
Loreena - good post. Good conversation. Good impact from the current credit. It will float up the price point range over time -- it's already started upward. Extending the credit and then phasing it out would be responsible. Expanding it is unnecessary.
Giving EVERYBODY $8000 to buy a home just means there are X+$8000 more dollars out there per house purchased. That just bids all prices up by (close to $8000) -- shoving the median price even farther beyond the median family's real (i.e. long-term) buying power.
(Bidding prices up is already happening at the low end -- That's why so many of us like it.)
A $15,000 credit would have a more pronounced effect, plus AND minus.
Then when the credit IS finally ended there will only be x dollars available for each house purchased -- making for a downturn.
I'd like to see an extension of $8000 thru February 2011, then $6000 thru June 2011, then $4000 thru February 2012, then nothing.
I read another post earlier where a blogger suggests that the 8k Tax Credit be eliminated. I can see his reasoning but also the reason for this extension. Clearly, having this Tax Credit has worked in the past and if it continues will definitely help buyers purchase more and thereby reducing inventory which in turns will drive prices up. We see this working for Cash for Clunkers program and it is having the same effect here.
We are in the camp that thinks the credit is an artificial fix that will do more harm than good. End the government taxpayer handouts NOW and let the free market settle out. Everyone seems to think the $8000 is coming from the Housing Fairybut it isn't... it's coming from US, OUR CHILDREN and OUR GRANDCHILDREN.
Personally, I already have 3 mortgages; I don't need or want to increase my tax expenses just to bribe a few first-time homebuyers who, by the way, don't seem overly excited about the credit in our area anyway.
In fact, we have run into several lately who are "waiting for the $15,000 tax credit" that they believe will be coming next year along with lower prices due to the many new foreclosures predicted to hit the market.
It is bittersweet to me. I have many additional buyers because of the tax credit, and due to the specialty loans I do. I even have people approved now that I won't be able to approve after the tax credit is gone. But I still fear where the spending will lead us and what it will ingrain in our society, a society that already expects handouts for free.
I love all the above comments and here is what I'd love to add:
(Please be gentle with me as I want to take my explanation slowly):
There are concerns about jobs and unemployment. Again, I can only speak directly in relations to my personal experiences and what this credit has directly done to impact the people around me:
Most of my clients who qualified for the $8,000 has put the money right back into the house. I had a client (who has 10% down) decided to purchase a less than perfect condition home because he would use the money to replace the carpet, and repaint the house, change out windows for the $8000 that he would later receive from Uncle Sam.
These stir the remodeling busines, the title business, partial local delivery companies thereof because of all these contracts that need to be running around, title attorneys, Home Depot/ Lowes gift cards that we buy for our clients, Starbucks gift cards that we get from our loan officers, local flower shops that we use to send Congratulatory messages, Home Depot/ Lowes/ other local improvement stores when clients buy paint, door knobs and flowers, the pizza giftcards that I buy for clients for their move .... All of these contribution to the effect of $8,000 tax credit - Not just the "housing" industry directly. Almost all will NOT put this back in personal savings for emergency money - which is also not a bad idea in fact.
Oh btw, after showing homes to 2 sets of first time home buyers, it's 630pm. I'm tired and the last thing I want to do is to cook dinner for my family. I stop by to pick something up.
Would all of these count as in money back into the economy? Would all of us who had the impact of the $8,000 tax credit ultimately more in personal income taxes collectively be more than $8,000? Just a thought.
So, clearly my reasons for this extension is PERSONAL. Selfish reasons if you want to call it. Personal reasons on behalf of my clients and Personal reasons for my business since I have never served as many first time homebuyers as much as I have in 2009.
I had a great discussion with Brian. I still vaguely understand how it will cost generations. But doesnt the government spend taxpayers' money anyways one way or the other? If it is not this housing bill, what other industry?
It's time people actually started working for their own money and, gasp, maybe saving for a while before making big ticket purchases.
The federal government is not Santa Claus and the sooner that notion goes away the better off we will all be.
Not surprisingly, tax revenues are way down this year because the people that actually create wealth in this country are concerned about higher taxes coming on everything.
Lower tax revenues will mean the governement will need to raise taxes to keep their redistributio, er I mean, "revenues" at the same level to supply the goodies to the voters that keep them in power.
Also not surprisingly, when taxes were lowered in years past tax collections typically went up. Figure that one out and you're on the way to understanding how capitalism works.
The government doesn't create or give anything away; they merely take it from one person and give it to another.
They should because their lenders are just taking too much time and its driving people crazy if they don't make it under the wire...that's all we need now...more anxiety.
Loreena - I offer some Tax Credit Prefund programs that allow buyers to use $5,000 of the (up to) $8,000 tax credit upfront for a down payment and/or closing costs. The rate is better than other grant programs, and you can use this loan in additional locations that you can't use some of the first time buyer grant programs that we do (in NJ). I know many other states had similar programs, so their results may be similar (I only assume). I am going to post on this later today.
You state that most of your buyers have put the money right back into the house which further stimulates the economy but you don't factor into the equation the fact that the money used isn't real --- it is manufactured out of thin air and will most likely cause massive inflation.
The questionable "benefits" are short-lived and will be offset by inflation and increased public debt. It is all smoke and mirrors designed to buy votes and promote increased reliance on the federal government.
First time buyers should simply purchase a lower priced home rather than looking to their neighbors for an $8000 handout.
First time home buyers have always been the most active in any market. Most of the first time home buyers my team sold to this year were going to buy anyway. Maybe not the case with other Realtors in other parts of the country. But...IMO it was a give away from us the tax payers to those who would have already purchased. Not all...but many.
Time to let the market do it's thing and get back to stability.
The tax credit needs to end. Printing money and distributing it will have consequences. That is simple economics. If you are all about the tax credit then maybe you should take out your personal wallet and give your buyers part of your commission. How does government recovery from or fund these types of expenditures? They raise taxes. There is never a free lunch.
I may not be able to collectively add the sum of $8000 back together because I dont know how much other industries make there of.
But each of us that have been impacted by this tax credit, who have generated income because of it do end up personal income taxes? Does this not go back to the government?
The tax credit stir the housing directly and indirectly: the remodeling busines, the realtor, the loan officer, the title business, partial local delivery companies thereof because of all these contracts that need to be running around, title attorneys, Home Depot/ Lowes gift cards that we buy for our clients, Starbucks gift cards that we get from our loan officers, local flower shops that we use to send Congratulatory messages, Home Depot/ Lowes/ other local improvement stores when clients buy paint, door knobs and flowers, the pizza giftcards that I buy for clients for their move. Oh btw, after showing homes to 2 sets of first time home buyers, it's 630pm. I'm tired and the last thing I want to do is to cook dinner for my family. I stop by to pick something up.....
All of these contribution to the effect of $8,000 tax credit - Not just the "housing" industry directly. Almost all will NOT put this back in personal savings for emergency money - which is also not a bad idea in fact too.
No one knows the full impact of how much this would help or wouldn't help otherwise. The arguments about leaving this to the next generation must also directly accounted for.
Then, I would say if Congress should or shouldnt extend and expand it.
The expansion to encompass all home buyers may spur some higher end home markets that are currently hurting most in my area.
I think the govt has done enough in getting in everyone's business in order to get back to normal it needs to do get out the incentatives for this and that just gives everyone the mentality of thinking they deserve all the time
Your post has generated a lot of interesting comments from both sides. And, there is a valid reason for people to be concerned about another government giveaway.
But, really, these are not record players - they are home sales. And the housing market is part of the backbone of the economy. This has been the rationale behind the mortgage interest deduction and other programs designed to encourage home ownership. I think the housing market still needs a shot in the arm and extending the credit and making it available to all buyers would help to spur sales next year. Invigorating the housing market is good for the country.
But doesnt the government spend taxpayers' money anyways one way or the other?
Flawed logic; it's justifying rape as a less horrific crime than murder. Realtors and originators shouldn't devour the nation's flesh just because everyone else is doing it.
And the housing market is part of the backbone of the economy.
Says who? Actually, information is the new backbone of the economy and it has been for 25 years.
This has been the rationale behind the mortgage interest deduction and other programs designed to encourage home ownership.
Which is how we got in this mess; begging for scraps.
This will be hard for most of us to understand because we've never really lived in a "free" market; markets have had gov't "boosters" in them since the 30s, as America marches towards collectivism, and planned economies.
Rather than asking the Gov't for help, try to imagine the glorious, productive economy we could have if the Gov't just got out of business. It's hard because you've NEVER seen it (unless you're in your 90s)
I would like to see congress extend the tax credit but I believe their focus is only on healthcare and doubt very much them addressing this. I hope I am wrong:)
Loreena,
I could not agree more! Why can't our legislators see how it would not just affect housing, but likely pull the country completely out of the recession.
There is another featured post saying kill iy. Let's see, we have bailed out Wall Street, and the American car industry. The economy is still fragile and I think we are in another round of woe in the next three years. Cash for clunkers worked, and the tax credit has worked. Let's not screw the middle class again.
Loreena- I agree and have sent my request for the extention of this tax credit. It is better to give the monies to the consumer than the banks and insurance compaines. They have proven that they cannot stimulate the economy.
I agree with the above comment. I would much rather give the money to deserving first time home buyers. $8000 ought to be enough to stimulate the ecomony rather than 15,000.
Great idea here is a link for all the Realtors in the USA to give their Congress Person a call and ask for an extension of time and also an extension in the $$$ amount for every "Home-Buyer".
This really will help to energize our tumbling economy!
Loreena - any "recovery" that takes water out of one end of the pool and pours it into the other end of the same pool is no "recovery." It has appropriately been called Alice In Wonderland economics, but is certainly nothing that will last long term. You MUST keep in mind where the money comes from...
I have been following this for months and received (and responded to) the NAR call to action yesterday. I have seen the good this has done and I think the extension and expansion of the credit it a good thing for America and real estate. Thanks for the post!!!
After reading some of the post I have to ask,,, What is a deserving first time home buyer. How are they deserving. I am very much a Conservative. And talking about how hard it is to qualify for a mortgage, What is so hard about having good credit, It is called working and doing without, pay your bills on time. Maybe not buying I want items but only buying needed items, Do you really need that 200 pay per view cable package. The point I am trying to add,It is no harder to buy a house now, than 22 years ago when I got into this business ,Full time and still full time. Back then you had to have a down payment, you had to have a good credit score. You also faced 11.5 percent interest rates. Then Some one decided that people that did not know how to save, deserved to buy a house. So came the gimmick loans, Instead of Mom or Dad giving the down payment as a gift, Someone came up with the 3rd party gift funds for down payment, And they charged a one percent fee for processing. That is when prices started being falsely raised to cover the so called gift funds paid by sellers. The snow ball started building, I am not a good enough writer to tell the whole story, but those that have been in business at least 12 years know what I am talking about. This 8k tax give away is just another way for the governmentto help people, to depend on the government instead of there selves Again I ask, if you cannot save the down payment, then you need to RENT. or maybe instead of buying the 5 dollar cup of coffee ever morning, brew your on, and in three years you will have saved over five thousand dollars, that will help toward a down payment. But the new culture of today is ever one wants it now. Sure the tax credit will help us sell houses, so did the so called zero down loans, but where did that get us. I have sold hundreds of houses to people with zero down, that if there ac went out , that they would be having to take out a loan. Or how about the people buying 200 k houses that could not even write a check for Earnest money till pay day. The only way to correct the problem is by doing with out. not the government bailing us out. We need a long term fix. It is jobs. and a change in mind set. Not too many years ago the first time home buyer was near 30 year old. I just closed on a house to a 20 year old. That I got them into a house for zero out of pocket. through a Rural development loan. Hope it works out for them . I hope they listened when I advised them to save there government handout. for when something breaks, But instead ,when they got the check, a few weeks later, They called me to come look at there new six thousand dollar four wheeler. Well I guess the four wheeler dealer and I are happy we both got good commission checks. but what will it really cost in the end.
Loreena, I will add my .02 Cents here. I believe in a Hand Up and not a Hand Out. I view the $8,000 as a Handout to the fortunate few that can qualify for loans today because of the tighter underwriting and qualification guidelines. If anything, I would like to see FHA/HUD offer the $100.00 down payment option that is offered on the sale of HUD owned properties to everyone. Some may disagree, saying borrowers should have some skin in the game.
Great Post! Congress needs to extend the Tax Credit (Rebate) to everyone and increase it to $15,000. We all know that Real Estate drives our economy. The $15,000 would be infused almost immediately back into the economy through furnishing the new home.
I hope they do extend the program but as it was in 2008, we kind of heard about the increase well before the end of that year. However, this year we're down to the final 3-months in 2009 and there's still no word on the extension or program adjustments. But, anything that can be done to maintain the housing crisis should be carefully thought out as we've seen what jumping the gun can do as in the case with the "cash for clunkers" progam.
A deadline creates urgency, and the flurry of activity generated by the offer of a tax credit immediately disappeared when the proposal for a larger tax credit occurred. Let it die or reduce it. Then, next time there is an offer of incentive to home buyers, perhaps they'll take it seriously. Just my 2 cents!
I'm not so sure why many people are under the impression that the $8000 tax credit is the caveat that's helping unqualified or financially distressed people purchase homes. I've closed many, many transactions since the tax credit has been enacted and not one of my purchasers has used the tax credit as part of the transaction. In fact, the credit cannot be used for the 3.5% down payment as required by FHA - only as additional down payment and a contribution to closing costs. However, not one of my purchasers have used the funds for anything other than home repairs, appliances, moving costs, etc. I strongly believe that this tax credit has assisted in not only stimulating the real estate market, but those ancillary businesses that are indirectly attached to real estate as well. It's tax payer funds going back to American people instead of corporations. We ALL know what happens when huge corporations receive an incessant amount of tax credits and breaks, don't we???? Well, if not, i'll tell you....THEY BUY BIGGER MANSIONS!!!
Vanessa - I share your same experience because I had to go back to open up ALL my files from this year to see who shouldnt/ wouldn't have qualified otherwise. Like your stats, I found none of my clients. Perhaps you and I are just one of the few. Perhaps more are putting first time home buyers that shouldnt be. Then, in the end, we're back to the same square one - which has nothing to do with the tax credit.
Just like people who would buy houses with or without the tax credit, people that cant qualify would too.
There is some truth to the fact that NAR is lobbying so hard because we are in the business of seeing houses move. So, there is a part of selfishness in this agenda. However, I see that the additional $8000 does help the rest of the nation directly and indirectly.
Vanessa - I share your same experience because I had to go back to open up ALL my files from this year to see who shouldnt/ wouldn't have qualified otherwise. Like your stats, I found none of my clients. Perhaps you and I are just one of the few. Perhaps more are putting first time home buyers that shouldnt be. Then, in the end, we're back to the same square one - which has nothing to do with the tax credit.
Just like people who would buy houses with or without the tax credit, people that cant qualify would too.
There is some truth to the fact that NAR is lobbying so hard because we are in the business of seeing houses move. So, there is a part of selfishness in this agenda. However, I see that the additional $8000 does help the rest of the nation directly and indirectly.
Respectfully, I disagree about extending this credit.
I think the governement ought to get out of the home and lending business altogether. Its their meddling that has caused this problem in the first place. They've already spent so much of our great-grandchildren's money. We don't need to spend more. We'll never get out of the hole that they've dug for us and digging it further by giving away more tax payer money isn't going to help.
It's just artificially postponing a market correction that needs to happen. Like it or not (and I don't like it).
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The lower priced range homes in my service areas (greater Frisco TX) less than $300K have been selling as hot cakes. The Sellers are finally pricing their homes correctly. The interest rates have been historically low. This is a perfect heaven for home buying in the greater Frisco TX area. This is definitely helping the housing market like it was intended.
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Loreena – my sense is that it will be extended …likely even enhanced. I understand the vote is scheduled for early October. Great Post … with a Call to Action! Thank you!