Homebuyer Tax Credit Backfires

Hype and pressure on buyers to act before the home buyer tax credit expires April 30 is causing some real estate agents to criticize their colleagues for pushing their customers too hard to buy a home before the April 30 deadline for the Federal homebuyer tax credit.

Realtor associations in Chicago, Memphis and elsewhere are organizing market-wide “open houses” on April 10 and 11. At least one builder, KB Homes, is hosting a “48 hour house hunt” to attract buyers who can earn an $8000 credit if they are first-timers and $6500 if they are repeat buyers. “Homebuyers who want to take advantage of the limited-time federal homebuyer tax credit still have time to choose a newly constructed KB home, but they need to move quickly,” said Chris Apostolopoulos, president of KB Home’s Northern California division.

“Some buyers care more about the numbers than the house, but not most. First and foremost a majority of buyers want to enjoy their new home. The money almost always matters, but seldom at the expense of the feeling factors,” wrote David North of Coldwell Banker Bain in DuVal, Washington on the popular ActiveRain real estate site.

“As professionals, we MUST understand the goals and circumstances of our clients well enough to know whether they are more committed to taking advantage of the tax credits, to patiently waiting for the perfect property, or some more gray combination of both. Some real estate agents are pushing their clients so hard to buy in time to take the tax credit, that their clients are dumping them to work with less pushy agents. I was reminded of this yesterday when just such a client was referred to me after dumping their previous agent. The first thing they told me on the phone, after an introduction was “We’re looking for a home, not a tax credit. We just fired our agent,” posted North.

North’s post was endorsed by a dozen colleagues who echoed his stand and raised similar concerns about pressuring buyers.

“Deadlines make for lousy motivation. It becomes too much like that late night commercial, “call before midnight tonight…” wrote Dan Tabit of Northstone Real Estate, Inc. in Snohomish.

Another added, “I am seeing sellers less willing to negotiate because “after all, those lst time buyers are getting $8,000 extra money.”