In this interview, Alison Brennan talks to us about how the tax credit effects home buying, as well as how the extensions affect sellers and buyers alike. She also discusses opportunity that still exist and how to be creative without the government’s help.
Interviewer: Today we are talking with Alison Brennan of the ABC Investment team of RE/MAX professionals, welcome how are you?
Alison Brennan: Good thank you, thanks for having me.
Interviewer: Well we are talking about what's going on in the market now that the tax credit went bye, bye I mean first impression has, have you seen it really make some type of an effect on buyers?
Alison Brennan: Absolutely. First when we are talking about the tax credit, we realize, we have to realize what we are talking about its really affected the 300,000 below price point right the first time home buyer. So since it ended on April 30th in the month of May we really saw a decrease in showings and a decrease in under contracts.
Interviewer: Yeah we experienced the exact same thing May was a pretty quiet month and a lot of the sellers I imagine were contacting you going, "Hey what happened to all the showings?"
Alison Brennan: Right.
Interviewer: Is there, did you have that conversation?
Alison Brennan: I did, I did and you know I think sellers are kind of relaxing a little bit which might be a mistake I think in this ever changing marketplace we need to analyze their price point every two weeks with an absorption rate analysis.
Interviewer: Well that was going to be my next question to you I mean now that’s gone away and they saw that month of May slow down that the sellers say okay maybe we got to do a change of attitude or change of game plan, did you see that at all?
Alison Brennan: A little bit they are kind of backing off a little bit, but you know as a real estate professional we want to meet their goals. So I think that we knew, need to analyze where they are at every two weeks in order to sell their house for the highest realistic price that a buyer is going to pay in the shortest amount of time.
Interviewer: Now since then have you seen buyers slowly coming more active into the market, I had said to some people "Hey listen May was, you know a loss of a tax credit, we had graduations, we had proms, that’s our past, I am expecting people to start jumping back in here in June, have you seen that?"
Alison Brennan: Well necessarily it kind of went up a little bit from it, but now we are still seeing a little bit decrease in showings its not just to say that the buyers have gone away, if they are qualified to buy the home before the tax credit ended, then they are qualified now, its just that they have taking their time and be more picky.
Interviewer: Well the US Senate has just approved a plan to give people more time now to close on that home. So originally the way the first time home buyer and tax credit incentive work was that they had to be under contract by April 30th, close by June 30th currently there is not enough time still 60 days for some people, so they are going to give them, what is it three months more?
Alison Brennan: Three months till September 30th?
Interviewer: That’s kind of hard to believe that somebody is going to need five months to close on house, but in any event you know good or bad what's your thoughts?
Alison Brennan: I like this extension personally.
Interviewer: Okay.
Alison Brennan: Because if the buyer was buying a short sale, I have two properties or two buyers right now where they, we didn’t get the short sale approval but for them its time to close them by the June 30th. So this extra 90 days is really going to help out or if the buyer was getting an FHA loan and there was inspection requirements that needed to be completed, there wasn’t enough or ample time to get those inspection requirements done, so now that there is, and now that will prevent those homes that were under contract to go in back into the marketplace and further increasing our absorption rate.
Interviewer: Last question so a buyer now calls up and said "Hey I missed the tax credit, am I screwed?"
Alison Brennan: Absolutely not. The opportunity has not been lost just because the Federal Government doesn’t offer it, it doesn’t mean you can be creative with the seller and come up with your own tax incentive plan. You can do it through buying down the rate or saw concessions anything like that. So you know homes are still at a bargain and it just hit historical lows so get down in there, don’t miss the opportunity.
Interviewer: Thanks, I appreciate it.
Alison Brennan: You bet, thank you.
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