Despite the doors it can open for first-time buyers, many consumers still don’t know about the $8,000 tax credit.
The first-time home buyer tax credit, which Congress in February increased to $8,000 from $7,500 and eliminated the repayment requirement, is an incentive you’d expect consumers to be clamoring about. But many practitioners are astounded to learn that buyers in their markets who are prime candidates for the credit aren’t even aware of it.
Ryan Gable, broker-owner of Starting Point Realty in Palatine, Ill., recently mentioned the credit to an architect who was attending one of his home buyer seminars. If anyone would know about the credit, Gable thought, it would be someone who’s involved in the building industry.
But he was wrong. “It was like she won the lottery when I told her,” says Gable, whose brokerage, which focuses on first-time buyers, has pulled out all the stops to market the credit as a too-good-to-miss opportunity. In addition to touting the credit at seminars, Gable showcases the incentive on the home page of his Web site and discussed it in an interview with a local NBC affiliate TV station. “It’s really unbelievable the number of people who don’t know about it,” Gable says.
Getting the Word Out
It’s an information gap that Rochelle Gano, ABR®, and her colleagues at New Tradition Realty in Vancouver, Wash., are also working hard to close. Gano’s brokerage in March rolled out a spring home buyer seminar on how to use the credit.
“I have a client I’m working with right now who’s using it,” says Gano. “He didn’t have enough money for a down payment, and he specifically decided to buy because he heard about the credit. The seminar can reach people like him with the information they need.”
In situations such as this, says Gano, the credit is an effective tool to get buyers off the fence. Yet it could become an even better market booster if it were tweaked. As it stands now, there’s no direct way to use the credit to get money up front, and that’s a major stumbling block, she says.
At least one state housing finance agency—the Missouri Housing Development Commission—is confronting that hurdle with an advance loan program. Gano is hopeful other states, including her own, will follow suit.
Another possible solution for first-time buyers who qualify for the credit but lack down payment cash is to increase the number of dependents on the tax withholding statement they file with their employer. It frees up more money from each paycheck, but it takes many months to accrue the $8,000 that the government will eventually reimburse.
What’s Your Marketing Strategy?
Notwithstanding these shortcomings, there’s no doubt that the credit is a great benefit around which real estate practitioners can build a targeted marketing campaign. Since launching his education efforts, Gable says he’s seeing considerable interest from buyers, especially after the TV interview. “It’s starting to catch on,” he says.
But a word to the wise, says Eunice Beekman, ABR®, CRS®, of House to Home Properties in Waupun, Wis.: Don’t let the looming termination of the credit—it’s authorized only until Dec. 1—dictate the haste with which you develop your marketing program. Shortly after Congress improved the credit in February, her brokerage quickly rolled out a home buyer seminar on the topic. But they gave themselves only a week to market it. The result: no registrants. “It was too last-minute,” she says.
Robert Freedman is a senior editor of REALTOR® magazine. He can be contacted at rfreedman@realtors.org.
Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.
One Response to “Despite the doors it can open for first-time buyers, many consumers still don’t know about the $8,000 tax credit.”
Front Gate Properties, LLC Real Estate » Despite the doors it can open for first-time buyers, many consumers still don’t know about the $8,000 tax credit. - March 31st, 2009
[...] But he was wrong. “It was like she won the lottery when I told her,” says Gable, whose brokerage, which focuses on first-time buyers, has pulled out all the stops to market the credit as a too-good-to-miss opportunity. In addition to touting the credit at seminars, Gable showcases the incentive on the home page of his Web site and discussed it in an interview with a local NBC affiliate TV station. “It’s really unbelievable the number of people who don’t know about it,” Gable says. More details. [...]
Leave a Reply