Incentive no, bonus yes

Well, we finally got a chance to use the $8,000 tax credit – but it was not an incentive or inducement to making the sale or for getting the buyers to commit. It was just a nice bonus to be able to tell them that they can look forward to filing for this.

I look at it a little like a mail in rebate. If they don't lose your form and you meet all of the criteria - and they feel like processing it - then you'll get the money someday.

So if people can get a tax credit, that's fine, but I have not seen or heard where this has actually created urgency and prompted a decision that was not already forthcoming.

I'm jumping up and down over the sale, not the "incentive."

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For more information on my coaching and educational programs and services, sales tips, insights, or strategies, visit my website stevehoffacker.com or my other blog homesalesinsights.com. © Steve Hoffacker, 2009. All Rights Reserved.

20 comments • Steve Hoffacker - Real Estate Sales & Marketing Consulting and Strategies • February 20 2009 07:54PM

Hold onto your wallet, the carnival (er, Congress) is in town

Housing stimulus bill – nice name, who wouldn’t want it? Me, for one. It is a shell game.

The most talked about provision – the $7,500 tax credit for first-time buyers is hollow.

First, this is credit up to 10% of the purchase price, so any amount over a $75,000 purchase would not be part of the program. Have you seen a lot of homes for less than $75,000 in your market?

Second, it is a tax credit, not a grant. It has to be repaid. In the initial year, if someone’s tax liability is not at least $7,500, they only get to realize the credit up to that amount.

Beginning in year two, the new homeowner has a tax liability of $500 to begin repaying the loan. Years 3, 4, 5 – same thing. If they sell the home, the entire balance is due in that tax year.

Sounds a lot like a student loan. Doesn’t sound much like a stimulus – unless you’re an accountant.

We don’t need this bill – not now, not ever.

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For more information on my coaching services or sales tips visit my website stevehoffacker.com or my blog homesalesinsights.com.

20 comments • Steve Hoffacker - Real Estate Sales & Marketing Consulting and Strategies • July 29 2008 11:54AM