According to a recently published USA Today® article, lawmakers and businesses are requesting an extension for first-time homebuyers.
The article states that first-time buyers make up 40% of home purchases, according to the National Association of REALTORS® (NAR), which is about 5 percentage points higher than the past historical average.
Bernard Baumohl, an economist at the Economic Outlook Group, says, “I’m fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back.”
There are several proposals in congress right now. Some include:
- A Senate bill to expand the tax credit to
$15,000 for any home buyer regardless
of income
- A House bill to keep the $8,000 credit in
place until June 2010 and expand it to all
home buyers
- Eliminating the income caps for singles
earning more than $95,000 a year and
couples who earn more than $170,000
Current proposals:

•A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.

“It would go a long way toward inducing trade-up buyers into the market,” says Lawrence Yun, chief economist at the NAR.

•A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.

•Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.

The Business Roundtable, a consortium of CEOs from large companies, urged Congress this month to expand the tax credit to $15,000 and make all home buyers eligible.

“The issue is how do we stimulate the move-up market, and that’s essential for the economy,” says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby’s International Realty and ERA.

“I think it’s going to be a bipartisan effort,” Smith says. “The issue is how to pay for it.”

The current tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000. Some business leaders want the income caps eliminated.

Buyers do not have to repay the tax credit if they occupy the home for three years or more.

“A lot of people are taking advantage of it,” says David Thomas, a Realtor in Washington, D.C., who adds that expanding the credit would boost the market. “That would be a fantastic idea, to enhance and expand the incentives.”

ACTION: Treasury Secretary Tim Geithner unveiled the plan May 14.

The U.S. Treasury Department last week unveiled a plan designed to streamline and encourage short sales, a move RE/MAX leaders have been advocating for some time.

Under provisions of the newly created “Foreclosure Alternatives Program,” the process will soon include standardized documentation, cash incentives to lenders and moving allowances for homeowners.

RE/MAX International supports the government’s action.

“We applaud the administration for creating the Foreclosure Alternatives Program, which promotes the short-sale process,” says RE/MAX International Chairman and Co-Founder Dave Liniger (ABR, CRB). “We’ve been talking with key lenders and government officials for months about the short-sale issue and couldn’t be more pleased that our hard work has finally paid off.”

Here’s a Treasury Department fact sheet about the plan, as well as a release from the National Association of Realtors.

Because RE/MAX International leadership recognized the viability of short sales as an important piece of the foreclosure puzzle, more than 5,000 Associates already have been trained through the Certified Distressed Property designation course, which covers the process in detail. The next airing on RSN is June 9-10.

“We’ve been preparing for, and pushing for, this type of action,” says Mike Ryan, RE/MAX International Senior Vice President of Media Training. “We’ve felt for a long time that short sales provide a lifeline for homeowners who can’t afford to stay in their homes, even with a loan modification. With a short sale, the sellers get out of a bad situation, the banks save on costs and the neighborhood avoids the many problems associated with vacant, foreclosed properties.”

Ryan says it’s more important than ever for Associates to learn how to handle short sales, which have traditionally been avoided by agents unwilling to navigate the long, frustrating and often unsuccessful terrain.

“It’s understandable why many Associates have been reluctant to pursue this business. But with distressed properties accounting for half of U.S. sales and a whole new level of attention now being put on making short sales easier to complete, it really is time to let go of any reservations,” Ryan says. “With the Treasury Department’s involvement, we’re going to see a lot more emphasis on short sales, through lenders, the media and the public. Our people need to be as educated as they can be about this segment of the market.”

Two days after the Treasury announcement, The New York Times published a story, headlined “Lenders More Open to Short Sales,” that included this passage:

“Mr. Mitchell of Lynx says short sales are often the best approach, even for homeowners considering a new loan to save the home. ‘It’s gotten to the point where people understand that sometimes you have to start over,’ he said. ‘A loan modification might help you in the short term, but sometimes what people need to do is get out completely.’”

The perception of short sales is clearly changing, Ryan says.

“It’s up to us, and each individual Associate and brokerage, to be prepared,” he says. “The foreclosure problem isn’t going away anytime soon, and in fact will probably get worse before it gets better. But short sales provide a source of relief - and we want our agents to be able to close them better than anyone.”

I have a listing in Ann Arbor that is absolutely beautiful. Perfect for the first-time home buyer - it’s “Country in the City!”

Click here to view more information on this home.

You have to see the beautiful property this home sits on…