We’ve all heard about the cash for clunkers program and due to human nature the bulk of the purchasers for new cars waited until the last minute. That created a surge of car sales right up to the very last second prior to the deadline.
The real estate market may experience a very similar situation as the deadline for the $8,000 tax credit is November 30th of this year! In case you missed this incredible buyer incentive, first time purchasers (those buyers who have not owned a home in the past 3 years) will receive $8,000 (provided the sales price of the home they purchase is $80,000 or above. This is money they do not need to pay back! If it is below $80,000 it is 10% of the sales price) when they purchase a home as a primary residence and close the transaction prior to November 30th, 2009. That means they have to have an accepted offer by no later than November 7th or so (unless they are paying cash), as the mortgage lenders need at least 3 weeks to process the loan in most cases.
What does this incentive mean to you as a seller of a residential property? It means opportunity! You know economics 101 teaches us the law of supply and demand. When demand goes up, the product, whatever it is, will sell at a better price in a shorter time period. Therefore, this tax incentive is creating a demand, although short term, for homes that fall into the price range for first time buyers. In most communities, a first time buyer spends up to $250,000 on average. Therefore, if you own a home that falls into this price point, this may be a great opportunity to sell your home at a decent price. We may see a rush of buyers as the deadline approaches, just like the huge volume of buyers that took advantage of the cash for clunkers incentive.
So, if you want to take advantage of this phenomenon, time is short. Call a real estate agent as soon as possible, so that you can get your home ready for sale and get on the market in time to cash in on this government program. Of course, you need a destination, as you don’t want to sell and move into a hotel! If you have had your eye on a senior apartment, condo, or community, call and see if there is a home ready for you. If you sell in September or October, try to have occupancy by December 1st. That should give you enough time to plan your move, and get your new home ready for your arrival. There are great incentives and a healthy inventory so you should have no trouble finding your new residence.
As I have sold several thousand homes, many of those of seniors, the statement I hear most often when I run into them after the sale, is, “why didn’t I do this sooner!”
