RISMEDIA, April 25, 2009-The $790 billion American Recovery and Reinvestment Act signed into law by President Barack Obama in February gives first-time home buyers an exciting incentive to enter the housing market-an $8,000 tax credit. Now the trick is getting them to take advantage of it. In 2008, the home buyer tax credit of $7,500 required repayment over a 15-year period. Under the new provisions, there is no repayment requirement as long as the buyer remains in the home for three years. For many 2009 purchasers, the new guidelines will mean more money in their pockets come tax time.
Combine these new criteria with low home prices and interest rates, and buyers are sure to see the value of entering the market once they know all the details. As the professional, you can help them understand the depth of this opportunity. And that means being up to speed yourself.
Don’t Wing It
There is a lot at stake for real estate customers, your business and the entire real estate sector, so make sure you know the ins and outs of both the Homeowner Affordability and Stability Plan, and the American Recovery and Reinvestment Act, which includes the home buyer tax credit. Pay particular attention to the timeline: All purchases must take place between Jan. 1, 2009 and Dec. 1, 2009. For the most comprehensive details and perspective, visit realtor.org regularly.
Go to Them
Don’t wait for buyers to come to you. Market yourself and your services to first-time home buyers now, and make sure they know you can help them benefit from the new legislation. It’s worth noting that buyers who’ve previously owned a home are not excluded as long as they haven’t owned during the three years prior to this year’s home purchase. Past clients could be prime candidates because they’re already familiar with the home-buying process.
Dispel the Myths
Many qualified buyers are convinced that lending is frozen, down payment requirements have skyrocketed, and they’re better off waiting until the market bottoms out. Distribute information that puts these misconceptions to rest. Make it clear that there are loans available with manageable down payment options for qualified buyers. And communicate the danger in waiting for “the bottom,” which will be exposed only when home prices have already started to climb again.
Work with Lenders
Open the lines of communication with your mortgage contacts. They’re looking for quality leads, too. New performance incentives that were written into the stimulus bill for lenders can open even more doors for your customers. Keep in mind that first-time home buyers are an economic stimulus on their own, and you can be a driving force behind their re-emergence.
Margaret Kelly, CRB, is chief executive officer of RE/MAX International.
For more information, visit www.remax.com.