Cash for Caulkers: Appealing to Home Shoppers?
Congress is about to approve a program to put contractors back to work doing energy retrofits.
If “Cash for Caulkers” passes, home owners will be eligible for a tax credit worth up to $12,000 or half the cost of the retrofits, whichever is lower.
A home owner who spends $24,000 to cut his energy use in half will save an average of $100 per month, estimates Lane Burt, manager of building energy policy at the Natural Resources Defense Council. With a $12,000 tax rebate from the government, the payback will take 10 years.
Some real estate practitioners pointed out that energy retrofits might be a hard sell because they don’t raise a home’s sale value. “It sounds good on paper, but it’s just not how the American consumer makes choices,” says Jeff Geoghan, a Coldwell Banker REALTOR® in Lancaster, Pa. “If you’re buying a house, and you see a furnace has a 95 percent efficiency rating, are you really going to make your decision based on that?”
Source: CNNMoney.com, Steve Hargreaves (02/04/2010)
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Expanded Tax Credit Offers Big Opportunity
With a new April 30 deadline in place for clients to take advantage of a federal home-buyer incentive, real estate practitioners now have slightly less than four months to get their qualified prospects under contract before the cut-off date.
In order to maximize this opportunity, it is recommended that real estate pros revamp their marketing materials to reflect changes in the rules — which now allow certain repeat buyers, as well as first-time buyers, to get a tax break.
In addition to promoting home-buying based on today’s lower home prices and historically low interest rates, it is also important for the real estate professional to convey to clients that there is no requirement that they sell their current residence at once — or ever.
On top of polishing up their marketing approach, real estate professionals should free up their time so that they are available to spend more time guiding buyers and hosting property showings.
They also must be thoroughly knowledgeable about the supply of properties priced up to $800,000, which is the maximum price for a home to qualify for the tax credit.
Finally, agents must keep all other parties involved in transactions — from lenders to inspectors — on top of things and at the ready because most motivated house-hunters will want to move quickly once they have found their ideal property.
Source: RISMedia, Margaret Kelly (01/08/10)
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Pending Home Sales Down from Surge
Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit. However, it remains comfortably above the level from a year ago, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.
Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”
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Tax Credit Gets Buyers Off the Fence
The new $6,500 move-up Homebuyer Tax Credit is apparently motivating buyers, according to a Campbell Communications survey of 1,500 real estate practitioners.
Existing home owners accounted for 41 percent of home purchases in November, up from 38 percent in October, the survey found.
“Current home owners jumped at the credit,” says survey research director Thomas Popik.
Source: Housing Wire, Austin Kilgore (12/22/2009)
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Home Owners Would Spend Tax Credit Wisely
A survey of homeowners by Coldwell Banker Real Estate found that 20 percent said they were more likely to consider purchasing a new home after learning about the $6,500 tax credit than they were six months ago.
Of the more than 1,000 homeowners surveyed, 83 percent said that if they were to purchase a home and qualify for the tax credit, they would pay off debts, make home improvements, add it to savings or use the money for household expenses.
Only 6 percent said they would spend the money on a luxury item like a vacation or a shopping spree.
Source: Coldwell Banker Real Estate (12/16/2009)
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Homebuyer Credit Gets New Life
Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.
Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.
Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)
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Analysis: Tax Credit Adds 357,000 Buyers
A study estimates that 357,000 buyers have been motivated so far by the $8,000 First-Time Homebuyer Tax Credit.
The study by Campbell Surveys, a division of Campbell Communications, calculated the figure by comparing the number of first-time homebuyers before and after the tax credit was instituted. The percentage of first-time buyers rose from 32 percent in January and February to 43 percent for the rest of the year – except July when the rate fell to 42 percent.
Campbell’s Research Director Thomas Popik pointed out that this survey mirrors the numbers calculated by the National Association of REALTORS® and those from Moody’s Economy.com.
The data supports legislative efforts in both the U.S. House and Senate to extend the tax credit.
Source: HousingWire.com, Austin Kilgore
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D.C. Dances Around Tax Credit Extension
Washington is being forced to take a hard look at the expiring $8,000 first-time homebuyer tax credit.
Nearly a dozen bills have been proposed to extend the credit past the Nov. 30 deadline, but the top decision makers are just beginning to weigh in.
On Thursday, Senate Majority Leader Harry Reid endorsed a six-month extension. Treasury Secretary Timothy Geithner said Thursday that he hasn’t made a decision yet. And the White House economic team says it will make a recommendation to President Barack Obama by the end of Friday.
Extending the credit is a tough sell in some corners because so far the credit has cost an estimated $15 billion, twice what was projected last February.
Source: The Associated Press, Adrian Sainz
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Many Experts Support Extending Tax Credit
Real estate professionals and home builders are pushing for an extension and an increase in tax incentives to encourage homebuying. Otherwise, they argue, that it is very likely that the current housing uptick will end on Dec. 1, when the tax credit does.
“The giddiness we see out there [about a recovery] is without merit,” says Richard A. Smith, CEO of Realogy, which is the parent company of Century 21, ERA, Coldwell Banker, and Sotheby’s International Realty.
Not everybody sees things Smith’s way. Michelle Meyer, an economist with Barclays Capital in New York, says that while the tax credit did contribute to an increase in sales, some of the improvement reflects an improving economy.
“Even if you say some of the gain is artificial, it’s still true that we’re seeing an increase in housing demand, and that shows fundamental strength,” she says.
Mark M. Zandi, chief economist at Moody’s Economy.com, ignores this chicken-or-egg argument and points to an analysis he did that suggests increasing the tax credit to $15,000 for all home owners through the end of next year would result in 675,000 additional home sales.
Source: BusinessWeek, Prashant Gopal
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Men, Women Vary on Home Shopping
When it comes to buying a home, women are in a bigger hurry, according to a national survey for Coldwell Banker Real Estate that delved into the homebuying psyche.
Coldwell Banker wanted to understand the difference between men and women in the homebuying process so it could help its practitioners do a better job of guiding first-time homebuyers who must make up their minds before the tax credit expires on Dec. 1.
Here are some key findings:
* When asked how long it took before they knew their home was “right” for them, almost 70 percent of women had made up their minds the day they walked into the house vs. 62 percent of men. On the other hand, significantly more men needed two or more visits (32 percent of men vs. 23 percent of women).
* 55 percent of women find it more important to be closer to their extended family than to their job, compared to only 37 percent of men.
* 64 percent of women said that if they found the home of their dreams but had concerns about its security, they would no longer be interested. More than half of men agreed (51 percent).
* When the respondents were asked how they would use an extra 12×12 room if it could be anything they wanted, men and women agreed on the top three responses: Bedroom, office/study, and family room/den.
* 8 percent—nearly all of which were men—said they would use the extra space for recreation/entertainment.
* 70 percent of couples said the responsibility for making major financial decisions–such as homebuying–are shared equally.
Source: Coldwell Banker Real Estate (08/17/2009)
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Uptrend Continues in Pending Home Sales
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7.
The last time there were five consecutive monthly gains was in July 2003. Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines.
Activity has been consistently much stronger for lower priced homes,” he said. “Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.
National Association of Realtors®
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Ten New Tax Breaks for Homeowners.
Congress’ inclusion of home energy incentives in the $787 billion stimulus plan it passed in February has a steady stream of customers heading to Manhattan’s Green Depot, a nationwide chain that carries environmentally friendly and sustainable housewares such as LED light bulbs and cork flooring. Most popular? Solar products, says Brian Tereza, the store’s general [...]
HUD: Tax Credit Can Be Used on Closing Costs
FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.
Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.
The loans can’t be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.
Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.
There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.
In addition, some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today.
The first-time homebuyer tax credit was enacted last year–and improved upon earlier this year–to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven’t owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.
Learn more about the credit, including how to apply for it this year even if you’ve already filed your taxes, at REALTOR.org.
Source: Robert Freedman, REALTOR® Magazine Online
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First time home buyers, tax credit explained!
The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.
Full details in a printable document,save and keep;
and printable First-Time Homebuyer Credit forms from the IRS.
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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. More details.
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First-time homebuyers now have $8K tax credit available to them!
First-time home buyers who purchase a home this year need to be made aware of a $8,000 tax credit available to them in the recently approved stimulus package, Nick Kremydas, CEO of the South Carolina Association of Realtors, said Tuesday.
Kremydas addressed local Realtors during the Aiken Board of Realtors luncheon at Houndslake.
“We’ve got to get the word out to the public that this credit is available,” he said. “If it moves just one buyer in your business in the next couple of months, then it’s worth it.”
Kremydas said the credit does not have to be repaid. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit, according to information provided by the National Association of Home Builders. More Details.
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