My New Blog

    I'm working primarily with first-time buyers right now. These buyers are very much aware of the looming November 30th deadline to take advantage of the federal governments $8,000 tax credit. Eight grand buys a lot of improvements even if the home is a bit of a "fixer". But why rush?

    My buyers and I tend to look at 30 to 50 houses before they find their perfect place. in addition they will spend hours at my web site (www.GreatMNHomes.com) dong their own looking. In some cases the perfect place will be listed as active on the mls only to find that there's an offer accepted. In other cases we're looking at multiple offers on these starter homes. This brings me to the point of this post; is my buyer going to be paying thousands to save thousands?

    The housing market at the lower end is hot here in Minnesota's Metro Area. I believe the heat is, in part, generated by the tax credit. In resulting multiple offer situations we see starter homes sold for above listing prices. I caution my buyers to beware of pushing prices up just to conclude the deal prior to the tax credit deadline. This is an old sales trick, make a buyer think there's a deadline or limited quantity and she'd better act fast or lose out. Perhaps that's what's happening in today's real estate market. Is the government now the slick, white-shoe'd salesman saying "better act fast or you'll lose $8,000!"? Perhaps the feds will be coming to us soon saying they've extended the tax credit deadline. Perhaps they're going to increase the tax credit to $15,000 (haven't we all heard this rumor?). In any case, carrying out my fiduciary responsibility to my client I caution her/him to slow down. Why jack the price of a home up in a bidding war by thousands? Maybe when this government give away goes away these same homes will be lacking buyers and prices may settle or even slide a bit.

The National Association of Realtors is urging the federal government to extend the tax credit. Good for them. I support that effort. Meanwhile I hope buyers will think long term. Don't rush to buy something now that may cost you more than the eight large your trying to get from the feds.

    I make money by doing deals but I also make money when my clients refer other buyers or sellers. I direct my clients to my web site to research the process before making such a huge commitment. I'd rather invest in a solid reputation of protecting clients than invest in a short term gain for a home buyer by hurrying to take advantage of a tax credit.