Tax Credit Procrastination
A Bird in the Hand

There has been a lot of news lately about legislation concerning the $8000 tax credit for First Time Home Buyers.

You may be thinking that you might get a better deal or a bigger tax credit if you wait to purchase a home. The problem is, if you wait too long, you might not get anything at all.

Although there are a handful of bills and a lot of effort aimed at extending the existing tax credit for home buyers or to create brand new incentives, the truth is that Washington moves very slowly. Sometimes things come to a complete stop.

Take advantage of what we know you can get and not what you hope to see come out of Congress.

That’s the message I’m getting from NAR analysts. The issue isn’t the tax credit itself. From everything we’re seeing, the credit enjoys broad bipartisan support and, as our chief economist Lawrence Yun has said, the credit is a bargain when it comes to economic stimulus. You get a lot of bang for the buck, and I think it’s safe to say that a lot of lawmakers realize that. Certainly Sen. Johnny Isakson (R-Ga.) does. He’s the lead sponsor of a bill to extend and increase the credit, and he’s been a champion on what the credit can do for the economy.

The problem, rather, is far more prosaic. It’s an issue of timing-even workload. Congressional leaders in both houses are determined to get something out this summer on health care reform. That’s a huge undertaking. There are five major bills in the works and all of those approaches must be merged somehow into a single bill. What’s more, different pieces of different bills are under different committee jurisdictions. It’s a tangled web that Congress weaves!

The good news on health care reform is that lawmakers generally recognize the need to help small business owners and the self-employed. That’s something else I’m hearing from NAR analysts. So, there’s reason to be optimistic that whatever comes out of Congress will recognize the tough conditions faced by REALTORS®.

But the downside is the precious little time this process leaves for other matters.

Bottom line: With Congress, you never know what’s going to happen. Sometimes legislation moves at a glacial pace; other times it gets turned around in an instant. It’s impossible to know beforehand what legislation might get put on a fast track. But, if you let your customers know about the uncertain prospects for any legislation, not just the tax credit legislation, they can make their own informed choice. Certainly they’ll appreciate that you let them know the potential consequences of waiting.

People who drug their feet on the Utah $6,000 Grant were very disappointed the funds disappeared and they missed out.

When it comes to the tax credit, a bird in the hand is worth two in the bush. If you hold out in the hopes of getting a richer credit, you could see your chance of getting any credit disappear.

by Linda Bills - 07-14-2009

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