RISMEDIA, January 12, 2010—First-time buyers as well as move-up buyers across the country are entering the market at a rapid pace in order to take advantage of the extended and expanded tax credit. In this month’s Power Broker Roundtable, Lennox Scott and Jim Gillespie, two well-known industry leaders discuss how real estate professionals across the board can make the most of the extended and expanded home buyer tax credit.
Moderator: Steve Brown, Special Liaison for Large Firm Relations, NAR
Lennox Scott, Chairman & CEO, John L. Scott Real Estate, Seattle, Washington
Jim Gillespie, President & CEO, Coldwell Banker Real Estate, Parsippany, New Jersey
Steve Brown: First off, let me say how pleased I am to be heading NAR’s Large Firm Directors Committee at such a crucial and exciting time in our industry. The housing sector has led the country out of every recession since the 1950s, and 2010 will likely be no exception. The Home Buyer Tax Credit of 2009 unleashed a pent-up demand from a large pool of qualified renters and pending home sales have risen for the last nine months in a row as first-time buyers take advantage of affordable prices and historically low interest rates. Now, the extension of the tax credit—and its expansion to include qualified move-up buyers—offers additional hope for a struggling economy and unlimited opportunity for dedicated brokers and agents.
This month, we have asked two well-known industry leaders to join us for a discussion on this issue. Lennox, the newly expanded tax credit opens the door to a new segment of potential home buyers. How can we make the most of this?
Lennox Scott: Well, I think you’ve hit the nail on the head, Steve. There is no question the original tax credit worked. What it did was stop the downward spiral. With today’s favorable affordability index, purchasing power skyrocketed—increasing by more than 25%. It now falls to us to do everything we can to get the word out to more first-time and move-up buyers in our own regions and neighborhoods.
Jim Gillespie: I agree. What that really means is back to basics—for everyone. Brokers have to provide the means for their agents to succeed—that is, talk tracks, role playing, signage and website information that bring buyers to the table. Agents have to use every means at their disposal to reach more people. That means canvassing renters, holding more open houses, getting out those flyers on doorsteps and communicating individually with everyone in their existing client base.
SB: So we need to take this extended and expanded tax credit opportunity to advance the entire real estate conversation?
JG: Absolutely. We need to remember that the stimulus bill may not be extended again, so we need to focus on today, one day at a time, while the window is open and the key indicators are a-go. Lead generation is more critical than ever. That means meeting and talking with more people and sharing information in every way at our disposal so that more people can make informed decisions.
LS: That’s our job. The extended package does more than push back the date by which buyers must act to purchase. It also raises the income level to include a larger pool of buyers and opens the door to a new demographic of move-up buyers. The challenge is to ensure that these important messages get heard—now, today—so that we get a running start on the time we have left before the bill runs out in the spring.
SB: So again, get back to basics, know your local market, prospect effectively and use your sphere of influence to the max?
LS: That’s it, exactly. Everything old is new again. Technology today is a powerful ally, but we need to focus on the tried-and-true sales methods that have worked in the past and continue to work moving forward.
JG: The fact of the matter is that real estate is still more than 17% of the GNP (gross national product). Making the most of the current opportunity is exactly the bridge we need to stand on as more buyers enter the market and the economy continues to stabilize. RE
The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Steve Brown, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.