Realtor.Rock: Realtors increase awareness of first-time buyers tax credit

Jim Hagerty, Staff Writer

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As sweet of a deal as the forgivable $8,000 first-time home buyers tax credit seems to be, dire economic factors and lack of consumer awareness may be keeping the dream of homeownership at bay.

Some consumers still find themselves at the mercy of uncertainty, as reports of rising unemployment and foreclosure rates make the future seem bleak. This, officials say, continues to keep potential home buyers on the outside looking in for those reaping the benefits.

National surveys conducted by the National Association of Realtors (NAR) indicate many potential buyers are unaware of the tax credit altogether. Only 18 percent of the more than 1,000 surveyed said they plan to take advantage of the program. The NAR survey did show, however, more than 20 percent of participants, many of whom were renters, considered homeownership in their immediate future, making $8,000 an attractive carrot.

Realtors are increasing marketing efforts in the midst of the strongest buyers markets in decades. A video on YouTube contains a seven-minute interview with Illinois Association of Realtors President Pat Callan, who explains the tax credit, simplifying it as free money. Callan also notes FHA loan limit increases and other government incentives for home energy efficiency.

Rock River Valley agents are using fliers, billboards, TV commercials and seminars as Realtors begin to see the need to increase awareness.

Now is the time to buy, said Jackie Cozzi, director of Communication and Professional Development for the Rockford Area Association of Realtors. This is as good as it gets. Inventories are full, and rates are low.

Potential first-timers may be a bit in the dark about the very structure of the tax credit program. Unlike last years incentive, which provided funds of up to $7,500 for first-time buyers in the form of no-interest loans, 2009 money is, in fact, free money.

Further, buyers can file an amendment to their 2008 income taxes and receive the funds now, as long as they purchase before Dec. 1. When amendments are approved, the government will issue them a refund worth 10 percent of the homes purchase price, up to $8,000.

This, stats show, should cause an ample pool of first-time buyers to swell even larger. Last year, 41 percent of homes sold in the United States were purchased by those buying their first homes. With more than 1,700 first-time sales predicted in the Rockford area this year, increased awareness of the tax credit can only add to that pot, especially as the market moves into spring, when agents normally see an increase in activity.

Its literally money-in-pocket, Cozzi added. It would be a disservice to let (it) go to waste.

Rockford Realtors are also gearing up for Money Smart Week, a national campaign aimed to educate consumers on saving, obtaining credit and the availability of government programs.

Money Smart Week runs from Saturday, April 18, to Saturday, April 25. Participating area programs will be ample, Cozzi noted, including a consumer credit seminar Tuesday, April 21, at the Rockford Area Association of Realtors (RAAR) office.

More information about the American Recovery and Reinvestment Act of 2009 and first-time homebuyers tax credits can be obtained at www.federalhousingtaxcredit.com. RAAR can be reached at (815) 395-6776 and online at www.raar.com. The interview with Pat Callan of the Illinois Association of Realtors can be seen at http://www.youtube.com/watch?v=VGHPf0YmrT.

from the April 15-21, 2009, issue