Decoding the $8K Tax Credit for Consumers

For a struggling house market, the $8,000 tax credit has been an invaluable step toward recovery. But many potential first-time homebuyers are uniformed or confused about the specifics of this government initiative. Lack of awareness about these finer details can prevent new clients from recognizing the great opportunity of homeownership. It’s now up to real estate professionals to keep consumers fully informed. So what are some of the first things Realtors need to explain to the consumer?

1.)What is a first-time homebuyer? A first-time homebuyer can be anyone who hasn’t owned a principle residence in the last three years. If your client is married, this means your client OR their spouse. Clients need to know if they qualify. If they think the credit doesn’t apply to them at the get-go, they won’t bother asking about it.

2.) Is the credit really $8,000 and will it need to be repaid?
The credit is 10 percent of the home’s purchase price up to $8,000. It is a true credit and the only repayment requirement is if the home owner sells the home within three years of purchase. Remember, many of the new first-time homebuyers are from the Millennial Generation. They are marked by their skepticism and sometimes even cynicism. They are always looking for the catch. Be sure to communicate that the tax credit is, indeed, free money.

3.)Are there are income restrictions? The limit on income is $75,000 for a single person or $150,000 for a couple to receive the full $8,000 credit. Credit doesn’t phase out completely until income reaches $95,000 for singles or $170,000 for couples. By the time you’ve answered this question, you’ve probably got a qualified and interest buyer on your hands. Be forthcoming about exactly what the buyer will be entitled to from the tax credit.

To aid consumers in understanding their all options, RE/MAX recently released a comprehensive program aimed at connecting first-time homebuyers with experienced RE/MAX agents to get the answers and find how they can become eligible for the tax credit before it expires on Nov. 30. First-time homebuyers are a critical component of the housing market recovery. The more homebuyers that know about and take advantage of this credit, the less inventory we’ll have on the market and the more home prices will stabilize.

So how are you promoting the $8K Tax Credit in your market?