"Without change, something sleeps inside us, and seldom awakens. The sleeper must awaken." Frank Herbert, author
Whoa -- talk about change. These days if you don't read the paper or watch the news every day, you'll feel like you've been asleep for weeks.
No doubt, change is sweeping through the real estate industry at break-neck speed. But amid all the gloomy talk about the economy is good news - especially for Realtors.
For all their faults, hot air and warts, politicians do know real estate is a vital sector of our economy and they want you to succeed. I know that's hard to believe sometimes, but occasionally they put their money where their mouth is - like now, with the homebuyer tax credit that gives up to $7,500 to first-time home buyers.
It basically amounts to an interest-free loan that can be paid back over 15 years. But it's only good for qualified purchases between April 9, 2008 and June 30, 2009. I've posted a question and answer article that covers all the details complements of the National Association of Home Builders at http://www.corcorancoaching.com/pdfs/IRS_First-time_homebuyers.pdf
I and many others believe this tax credit gives prospective home buyers a major financial incentive to get off the fence and jump back into the market and help reduce the inventory that's accumulated over the last couple of years.
But there's more good news. This credit is just one part of the "Housing and Economic Recovery Act of 2008 (HERA)" that was signed into law in July. The act is full of reforms designed to strengthen real estate and lending practices, and in the process, help buyers and sellers - and Realtors.
For example, there are additional property tax deductions for one year for all homeowners. Under current law, property taxes are deductible only if an individual itemizes his or her deductions on schedule A of their tax return. The new provision allows a deduction of up to $500 ($1000 on a joint return) for everyone who uses the standard deduction and doesn't itemize. Instructions will be provided on the 2008 tax return.
Plus, there's the FHA foreclosure rescue where lenders can write down qualified mortgages to 90 percent of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90 percent of appraised value. Borrowers do have to share 50 percent of all future appreciation with FHA. The loan limit is $550,440 nationwide and the program started on October 1.
And the government has increased the veterans' administration home loan guarantee loan limits to the same level as the economic stimulus limits through the end of the year.
I tell you all this because I believe deeply that the Realtors who come through these choppy waters will be the ones who stay on top of all the changes and use those changes to their advantage in the marketplace.
Now is the time to use this kind of information in all your marketing materials. In clear and concise terms, explain these programs and ask them to call you for the details.
Sure, I know some of you are saying, "Well, Bob, I don't like working with first-time homebuyers; they don't spend so much." Let me remind you they make up about 40 percent of the home-buying population.
And, they're looking for answers, especially in these turbulent times. And the Realtors with the information on all the incentives to buy will do well.
So I encourage you to change with these times and take time to learn about all the programs - nationally and locally - that can help your clients.
Best of luck to you!
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Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (CorcoranCoaching.com, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent's existing practice.