-
Quick Tour
Connect. Share. Learn.Welcome to ActiveRain, the #1 social community for real estate professionals.- Explore the world's largest storehouse of real estate knowledge
- Access free training on ActiveRain University
- Share the experience of life in the real estate industry
- Grow your business through real estate blogging
- Blogs
-
Resources
Product Reviews Curious as to what others in your profession think about a certain product or tool? AR's community takes the time to leave honest and transparent reviews of their experiences so you can be a bit wiser about your purchase.
- Broken down by categories and subcategories for easy finds
- Get an unfiltered look at what real users are saying
- Leave a review yourself for others to benefit from
- Add new products as you use them and gain points for doing so
|
period from 10 days to 7 days. Why? If the deal falls through, he wants time to sell his house again before April 30th. Hmmm...... Guess you can't blame a seller for hedging his bets.
Sellers seem to think with certainty that a better buyer will come along before the end of the month. That is only 12 days away! We believe that come May, when the tax credit is no longer available, most if not all of the sellers currently playing "chicken" with the market will end up on the losing end. Buyers who have not purchased yet may also do better in May. 
;)
;)
;)
Find PA real estate agents and Lansdale real estate on ActiveRain.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
© 2013 ActiveRain Corp. All Rights Reserved
75 Comments on With the Tax Credit Deadline Looming - A Game of Chicken is Erupting
They better be careful, cuz things are already slowing down, I think. Of course, if a buyer can get the inspection done in seven days, why drag it out?
I.ll drink a glass of wine when it is over.
I have seen it where the buyer was willing to pay a little more with the knowledge that the tax credit will be applicable. It has helped speed up the process and reduce nit picking.
My buyers even against my advice are being very picky and have a list to "move on to" if an offer does not work out. It is a scary time. Blessings for a great week!
Will be glad when this is all over. I do not see how an artificial market helps the economy in the long run.
I'm working with a builder right now who has the same mentality. Won't take an offer that has a 3rd party financing contingency because he's afraid to take his house off the market! He will only accept an offer that has non-refundable earnest money. It's very frustrating. Any other April and he would have been thrilled to get our offer.
Excellent analogy. Presently, I'm in this game of chicken (I represent the buyer), and it's our turn to 'cluck' next after our full price offer (with Seller's Assist) was rejected. Yes, REJECTED! Not even a counter offer. If this home doesn't sell before the credit expires they'll be singing the blues come May 1st and lamenting over 'what might have been'. Oh well....
Thanks again for all the great comments and feedback. We really appreciate everyone's perspective on this. Only 10 more days! Our best to all of you. ~Lisa
Has the IRS given confirmation that contracts subject to third party approval but only signed by seller
are deemed ratified and approved for the tax credit? If not then I think some of the advice being given is questionable. Another tidbit.... heard that tax returns claiming the tax credit$ cannot be filed electronicaly so the refund will be delayed up to 8 weeks and 25% of the those
will be audited
Steve W
www.soldbysteve.net
I see it as the buyers have the negotiating power around here. I think buyers are stringing things along til the end of the month knowing that the seller wants to turn around and purchase before the tax credit expires as well. I am also expecting an influx of backdating of contracts to flood the title companies up before the end of June. Things are going to be interesting around here.
We see that here too. Sellers are assuming that tax credit should be applied to the buy price in whole, or at least the majority of it. I've heard it multiple times "well they can afford 8k more because of their credit, so i'm not reducing the price".
Who's tax credit is it anyway. VERY good point. A lot of these sellers are going to be stuck with their house on the market still on May 1st and all the offers are going to dry up and they will regret their earlier position.
Great post... The question is will prices drop on average of 6K to 8K if the government ends this for good?
I've counseled the buyer's that I've been working with as a Buyer's Broker not to jump at the wrong home at the wrong price. Funny seems that their parents understand this more than they do.
Charlie Greco
A Reality Based Realtor
Lic. Real Estate Salesperson
516.705.4448
www.BuyMerrickHomes.com
mailto:charlie@charliegreco.com
My clients/my experience in the last 30 days: 2 different buyers and 1 seller in these scenarios.
1- Buyer#1- placed offers for 103K, 110K and 113K on house priced @127K, good financing, close quickly: ALL OFFERS REJECTED. Seller only willing to budge 7K. House still for sale. House needs moderate work done. Buyer has since walked away from buying a home.
2- Seller#1- House listed for 4 montths at 280K with multiple showings. Priced reduced to 250K. Received full price offer with excellent terms, close quickly. SELLER REJECTED. Wants higher than asking. No further showings or offers. Seller has since stopped answering calls.
3- BUYER #2- Placed 315K offer on a 335K house (20K off asking). OFFER REJECTED. Seller countered at 5K off, firm. House still for sale. House has high taxes, no garage and non-typical layout for Colonial style. Seller should have taken offer and run like batt out of hell. Buyer pressed on.
4- BUYER #2- Placed 275K offer on 299K asking (25K off asking). OFFER REJECTED. List agent claimed multiple offers are in. Seller wanted full price. House now under "Contingent" status on MLS. Buyer pressed on.
5- BUYER #2- Placed 320K offer on 350K house (30K off asking). OFFER REJECTED. List agent claimed multiple offers coming in. House still for sale. House in mint condition, at top of it's class. Buyer pressed on, determined not to pay full price.
6- BUYER #2- Placed a 4th home offer.. the best property of all. Placed a 325K offer on a 360K house (35K off asking) that was on market for almost a year. Offer accepted immediately. House needs little work, but has buried oil tank that may have scared away other buyers. Buyers are celebrating and can't wait to close.
Now then, does anyone have any Tylenol?
Hey Jill,
I didn't know bat's could run(3)! Sounds like you need some liquid stronger than Tylenol. Congrats and best wishes with your sale.
Steve W
www.soldbysteve.net
Jill,
Sounds like our April! For every 3-4 contracts we write, 1 gets to a "meeting of the minds." And Steve is right, wine works better and faster.
~Lisa
It hit me last November when they announced the extended and improved tax credit that sellers assumed they were entitiled to the credit when certain listing suddenly jumped up in price by 5-10K. What are people thinking and why weren't their Realtor's telling them that the incentive is to get people to buy not for seller's to sell. Thanks for posting this.
I'd like to hear more of these fun stories! Keep them coming!
I'd like to hear more of these fun stories! Keep them coming!
Great post. I have been coaching my buyers and sellers about this game of chicken for the past 2 months. This is one of those rare times where the ability to negotiate makes a huge difference to your buyers and sellers. It is also a time where we as agents need to be careful about what we share with the agent on the other side.
Having said that, your use of the term comps is interesting. Comparable sales can be a benchmark for value in a stable market. In a market with rising or falling values, they are always behind the curve. The reality is that home values are always determined by supply and demand. If a seller is holding to a price that is too high, tell your buyers to choose another home. Another alternative is to look for another home and wait until April 28th to put in an offer. By that time the sellers who are still on the market may be desperate again...then where does the power of the negotiation go?
I've been working with a few first time buyers lately and have been frustrated time and again by being outbid. Several have gone above list price. My advice to these buyers is to not stress over the April 30th deadline. I expect an adjustment to market value to occur when the tax credit expires and the frenzy (competition) to die down. Of course, there will be an adjustment period for the sellers to realize that they can't get as much for their home after April 30th than they could have before.
Personally, I object to the federal government mucking with the economy by offering tax credits. The stimulation lasts only as long as the tax credits at the expense of the taxpayers. The federal government has far exceeded its constitutional authority. A return to a free market would provide all the stimulation we need. No more bailouts or handouts. Let the failures fail, learn a lesson, pick themselves up, and start again with the benefit of experience! That's how America became great.
Tom