Steve Hoffacker's Sales Quips

You can argue about the effectiveness of the $8,000 tax credit last year and whether it actually helped you sell homes. The point is that the IRS discloses now that the program cost all of us over one-half billion dollars in fraud. Why the IRS honored the fraudulent claims and paid out the money is unclear.

The IRS says that about one-third of a million dollars ($326 million) went to people who weren't first-time homebuyers.

The rest of the money went to people in prison (Florida lead the nation here), people under 18, and people who never bought a home.

When the government puts out a really nice carrot, there are people who just can't help taking a bite.

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com, or go to my other blog homesalesinsights.com for additional sales tips, insights, and commentary. Listen to my free podcast messages at Steve Hoffacker's Happenings.

Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.

© Steve Hoffacker, 2011. All Rights Reserved.

In the recent housing tax credit program - which I opposed because it artifically manipulated the market and was only for first-time buyers (by their definition) - an amazing number of people received benfits that should not have. Result, they must return the money.

In a report just issued by the Treasury Department’s Inspector General for Tax Administration (TIGTA), it is reported that 1.8 million taxpayers claimed benefits to the tune of $12.5 billion. More than half of them - 950,000 people received a credit for homes purchased in 2008. They must repay the money.

Anyone who bought their home with the credit correctly but sells it for a profit within 36 months also must repay the credit. Don't know if the credit lowers the basis or not.

Over $19 billion dollars has been claimed since the initial program was enacted in July 2008, with more than 2.6 million people participating.

It seems that everytime Congress messes with the free market, abuses result.

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com, or go to my other blog homesalesinsights.com for additional sales tips, insights, and commentary. Listen to my free podcast messages at Steve Hoffacker's Happenings.

Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.

© Steve Hoffacker, 2010. All Rights Reserved.

The NAR, NAHB, and now the AGC, are requesting the $8,000 tax credit be extended. They feel that it produces sales and leads to increased home construction. Not so fast.

Tax credits are fine. Love 'em, just not this way. Put them in the 1040 like a dependency deduction. If you bought a home last year - any home at any price - put down the allowed deduction or credit. No down payment assistance, to monetized programs, just an incentive for buying.

The credit as it is applied now is not so much the carrot (as SarahGray Lamm put it) but a cherry - a reward after the fact.

As for construction, this argument doen't track. Not until the inventories are depleted will new construction be viable - and only then if it meets the size, location, and pricing requirements of the market. The tax credit in itself does nothing to promote new construction. If the credit was only allowed for new construction, the inventories would shrink faster, but not necessarily in the right ways to promote new construction.

For new construction to be viable, there has to be sufficient demand and a willingness to spend as well as affordability.

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com or go to my other blog homesalesinsights.com for additional sales tips, insights, and commentary. You can also listen to my free podcast messages at Steve Hoffacker's Happenings.

© Steve Hoffacker, 2009. All Rights Reserved.

There have been several recent posts about the $8,000 housing tax credit. Some have explained the finite points of it, some have just made mention of its existence, some have rallied behind it, and some have dismissed it as having little impact. I fall into the last group.

(1) If the government really wants to stimulate housing sales in a huge way - even to the point of getting people to enter the market who haven't even thought that much about changing their residence, there are much more aggressive ways to do it that what has been approved.

(2) If someone is really looking for another home and intends to find one, the $8,000 isn't going to cause them to make a decision. They already are predisposed to it. The "incentive" is just a rebate that in part compensates them for their decision.

(3) If the $7,500 or $8,000 provisions did not exist, I doubt we would have seen see any appreciable decrease in sales activity than what has been the case.

(4) The government really should save our money (and it really is our money) from this program - they're going to need it for something else.

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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.

This $8,000 tax credit that everyone seems so excited about reminds me of Wimpy in the old Popeye cartoons. You may recall that he was always imploring, "I'll gladly pay you Tuesday for a hamburger today."

OK, it looks like people may eventually get the $8,000 back (as in "next Tuesday") but they first will have to qualify for and finance and tender the required down payment and pay all pre-paids based on the selling price - not the selling price less $8,000. Therefore, the $8,000 which they will eventually get (if they meet all other eligibility requirements) won't really be a $8,000 incentive - just a rebate.

I fail to see how this will incentivize anyone to purchase who isn't so inclined to buy anyway. The $8,000 is nice, but it's not a carrot on a stick.

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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.