Tag: First Time Buyer Credit (page 1 of 1)

by Tom Vanderwell

Mortgage Officer

Author website

I had coffee yesterday with a long time friend of mine who works for a local title company.   We were talking about a variety of things, including some of the new stuff I’m working on on the web.

The topic came around to the $8,000 First Time Home Buyer Tax Credit.   He said to me that he’s had 3 different Realtors tell him that on December 1, the value of all of their listings is going to drop by $8,000 each.

Let me say that again, on December 1, each of the houses that they have listed is going to drop in value by $8,000.   Why’s that?   Because the first time buyer credit is going away.

Now let’s look at a couple of things (according to this story):

• It’s called a FIRST TIME HOME BUYER tax credit.
• According to these Realtors, it has inflated (or kept up) the prices of homes by $8,000.  So does the buyer benefit or does the seller?
• Somewhere less than 50% (according to the last stats I’ve heard) of the buyers qualify for the tax credit.
• But 100% of the buyers are paying paying $8,000 more.
• And the government is paying $43,000 for every additional sale we’re getting.

Now, do you really think that it’s such a good idea any more?

Oh, and in reality, the prices of the homes aren’t going to wait until December 1 to drop.   Realistically, if you haven’t signed a purchase agreement by Halloween, it’s going to be very difficult (but not impossible) to get the deal closed by the end of November.

All is not as simple as it seems.

Tom Vanderwell
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