You Gotta Know When to Fold’em: The Expiring Tax Credit & You
GENTLEMEN, START YOUR ENGINES!
Are they good and fired up?
Great, now turn them off.
As one knocks around the internet here in late April of 2010, he or she cannot go two clicks without encountering manic encouragement to purchase a home “BEFORE IT’S TOO LATE,” or proclamations that “TIME IS RUNNING OUT” to take advantage of the first-time and move-up homebuyer tax credit; each froth-inducing pitch more fevered than the last. The only thing missing are the decrees that “THIS OFFER EXPIRES AS SOON AS YOU LEAVE THE PREMISES,” and inquisitions as to “WHAT DO I HAVE TO DO TO GET YOU INTO A HOUSE TODAY?” P.T. Barnum had nothing on a gaggle of motivated Real Estate agents.
Here’s the thing, though, I am not a big fan of leveraging fear as a sales tool. With just over a week left in the Federal Clearing House Tax Sweepstakes, I am pulling the plug on my own hyperbole. If you are a first-time homebuyer and have not found a suitable home after months of feckless searching, it’s time to call off the dogs.
“IT DOESN’T HAVE TO BE PERFECT, JUST BUY SOMETHING!!!”
“HAVEN‘T BOUGHT A HOUSE YET???
WHAT ARE YOU WAITING FOR???”
“DON’T GET LEFT ON THE SIDELINES! THERE’S STILL TIME!”
Lest your home buying ship wash up on the nearest reef, these bleating calls to action should go unheeded. The wall to wall promotion does have one thing right, though: the time is now. Just not in the way they would have you believe. Now is the time to regroup and ensure you do not make a poor purchasing decision. The tax credit has been a nice perk to those fortunate enough to find the right home over the past year, but don’t sabotage a 250k purchase because Uncle Sam is holding an 8k caliber gun to your head.
If you are just starting the hunt now, you’ll do yourself a huge disservice by attempting to shoehorn yourselves into an ill-fitting home due to the time constraint. If you are nearing your wits end after an unsuccessful months-long odyssey, you are equally likely to do the same when facing down the looming deadline. I am issuing a cease and desist order to those who have confused the priorities of their fledgling home purchases.
Let it go, folks. Let it go.
We can start again when your only underlying concern is securing the best possible deal on your ideal new home. With the throng of desperate lemmings running blindly for the cliff, you might just find yourself as king of the buyer’s mountain come May 1st. With a potential reduction in the number of suitors left after the great tax credit hari-kari, you could unwittingly stumble upon higher negotiating ground via your abstinence from the purchasing frenzy. While that 8k incentive will drive some to overbid on properties in the coming days, the smart buyer might seek to carve a larger swath out of a seller’s backside in the fertile post-April 30th hunting grounds.
“IF YOU DON’T LIKE THIS HOUSE, SEND IT BACK FOR A NO-HASSLE MONEY BACK GUARANTEE!" <or not>
The folly in the air is palpable at present. That little governmental spiff will come and go, and you won’t even remember towards what end the money went. You’ll be stuck with the house, however. Make sure it is the one you want. And for God’s sakes, man, don’t make the same mistake that we all made back in the heyday of 2005-2006 by assuming you will be able to offload the house in a couple of years if it doesn’t prove suitable for your needs.
Surely we haven’t forgotten this lesson while it is still being taught in excruciating detail?