I made a bet, and a prediction
One of the real estate attorneys that frequently works with my clients said something like this to me, “I wish Obama would extend the first-time home buyer tax credit already; my daughter doesn’t know whether she has to buy now in order not to miss it.” Her daughter is buying on the Cape, where prices are lower than around here. In her opinion, that $8000 makes a significant difference.
Although I get flack on this site because I wear the uniform of a Realtor – a member of the National Associations of Realtors (NAR) – most of you know that I am consumer-oriented and buyer-friendly. Today, I am going to let my cynic flag fly:
I told my attorney-colleague something like this: “The extension of that credit will not be announced until the first week of November, or later. If it is announced before that, I owe you lunch.” (The current deadline requires that the property closes by November 30th. In order to collect, buyers need to be under agreement early in November in order to close on time.)
It is in the interest of NAR and of real estate owners to create a sense of urgency for the Fall market. If buyers are unsure if this credit will ever come again, some – maybe many – will get into action for fear of losing this $8000 freebie.
The fear of loss is a great motivator.
I don’t think the credit alone is a worthwhile motivator for first-time buyers in metro-Boston. I said that before and I’m saying it again. I am skeptical about whether $8000 should be enough to get a buyer off the fence. If you hadn't planned on buying before the $8000 credit, you probably should think twice. That money should be a bonus and a rainy-day fund for you and your new house, not the push that sends you to the top of your spending limit.
There’s a lot of pressure to extend the credit being brought to bear on Obama and the powers-that-be. I don’t know if it will work. Were I a buyer who was ready to buy without the credit, I would be in a quandary about whether to jump in and collect.
Am I still the lone wolf among Realtors calling buyers to think twice before rushing to collect their tax credit?
Are you in the ready-to-buy category and feeling the pressure of the clock ticking on your potential gain of $8000?
If the credit is extended before November 1st, I will eat crow publicly. I will also be buying lunch for my attorney-colleague. Do you think I made a good bet?
