Today’s Talking Point 11/02/2009
7 Step Action Plan for Tax Credit Extension
Step #1 – Contact anyone who might have given up.
Originally, there was a lot of speculation that there would be no extension granted. That caused some buyers to stop looking (especially in regions where closings take longer). We must immediately reconnect with this group.
Step #2 – Contact anyone in the higher income levels that will now be eligible.
Income levels will be raised to $125,000 for a single and $225,000 for married couples. This segment is new to the credit and therefore virgin territory. I would start with this group as it has not been touched by the original tax credit. Since there is higher income, they will qualify for a larger mortgage. This could be the answer for the second tier homes whose sales have remained stagnant.
Step #3 – Contact every move-up buyer
This group has stayed on the sideline. Now, they might have 6,500 reasons to make the move. One of the reasons they were on the sideline was the difficulty selling their home. But, if the $8,000 credit will now be available to buyers with higher income, more of the middle tier priced homes will sell. Many of the sales over the last 6 months were foreclosed properties which did not create move-up buyers. Now, more non-distressed properties will sell.
Step #4 – Let every buyer know that this is the best time in history to buy a home.
The affordability of homes has gotten better for three reasons.
1. Interest rates are at historic lows. However, the Fed has announced it will pull back on the purchase of mortgage-backed-securities in March. Experts believe that will drive interest rates to over 6 percent. 2. Tax Credits if you buy now. Whether it is $8,000 for new buyers or $6,500 for the move-up buyer, the tax credit will expire the first half of 2010. (the house must be in contract by April 30th.) 3. Selection is fabulous. No matter what type of home you are looking for, your choices are almost unlimited. As more buyers take advantage of this opportunity the less choice there will be.
Step #5 – Contact all the CMAs you did over the last year and let them know – THE TIME HAS COME!
If anyone wants to move (for whatever reason) now is the time. They will never have a better opportunity to move on with their lives and live the life they have always dreamt about.
Step #6 – Contact every listing that EXPIRED in the last 18 months.
Again, if anyone wants to move (for whatever reason) now is the time. They will never have a better opportunity to move on with their lives and live the life they have always dreamt about.
Step #7 – Sit with your existing sellers.
The opportunity to sell their home will dramatically increase from now until the spring. Then, interest rates will rise and the extension of the tax credit will expire. We must insist that they price it properly. If their house doesn’t sell now, then when?
We have been given a gift.
Let’s use it to turn this thing around!!!