Since this is still a bill and not yet a law, a lot of the information out there is still vague. For example, rumor has it that the bill will provide an $8000 credit for first time home buyers that purchase a home before December 1, 2009. No one has been able to tell me yet if that means they need to close the transaction before December 1 or simply have an offer accepted.
Here is what we do know. A first time homebuyer is defined as someone who has not owned property in the past three years. There are income restrictions; the credit is available to individuals making $75,000 a year or less or couples making $150,000 or less per year. As a tax credit, this should not be confused with grants or closing cost assistance. The tax credit will be taken in 2010 when homebuyers file their income tax returns for 2009.
I had wished that the bill will include all home buyers, not just first time home buyers. You see, in Rochester we have a shortage of inventory. I am currently working with 4 first time homebuyers that are looking in the $130,000 to $150,000 range and they are having a difficult time finding homes to look at much less purchase. One couple, in particular, had 4 houses purchased out from under them, several before they even were able to go see them and one before they could do a second walk through. I do believe that a credit to all buyers would motivate more sellers to move up or even down size.
Why is that good? Well, of course it means a payday for me but there are many other individuals that derive their income from the housing market, i.e., inspectors, appraisers, attorneys, surveyors, mortgage loan officers, title companies, etc. The government makes a few dollars as well with transfer tax, mortgage tax, recording fees, etc. and most new home owners pump additional dollars into the economy by hanging out at Lowes, Home Depot and other home improvement shops as well as potentially buying furniture, curtains and other items to make that house their home. In other words, a good real estate market stimulates the economy.