I just love this idea. What a great proposal Richard Weisser has come up with to save the real estate market. Tell me what you think. Coach Patti
A lot of real estate agents are speaking as if the door on real estate sales will be slammed shut if the federal tax credit for first-time homebuyers is not extended. And while this opportunity to collect cash has had a very positive effect on sales in the lower price ranges, it really hasn't meant much to sellers with homes valued in excess of $200,000.
My preference is to let this credit just go away. The expiration of the credit could actually lead us back to a true fair market, where buyers buy because they need a house rather than just trying snag a great deal with future profit potential.
I would like to propose an alternative remedy to help sale in all price ranges. My proposal would really create interest in buyers that could really stimulate the market, and it is the only remedy that I have even seen proposed that would actually correct the mistakes of the past.
The solution I am proposing is to make all down payment monies for a personal residence up to and including a cash sale an income tax deduction. Not a refundable credit, just a deduction against income.
This also would encourage buyers with both cash and significant incomes to get back into the market. It would lead us back to the days when more down payment was better, and smaller mortgages would prevent the short position debacle that we are experiencing today.
The higher end market would see an extensive boost in sales, and prices would stabilize. And once again, homeowners will be encouraged to have equity in their homes to cushion them against negative market forces.
So what do you think? A dollar for dollar tax deduction for down payments on a house sounds like a good idea to me!
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This is not a bad idea. We need an incentive for all buyers; not just first-time homes buyers.
But if they sell short, they don't have a down payment.
Hi Patti,
Thank for sharing an important and helpful article.
John Pusa
Hi Patti...I like where Richard's head is at and his way of thinking. The solution to "our real estate" issues maybe answered by a professional that works in the trenches. I'm afraid too many wishes and prayer ride on the coattails of the politicians who by profession...don't practice real estate every day, No offense what do they know about "our business". If you throw enough cash at it, it will turn out fine...wrong, these methods have only served to raise the values of low end properties and further lower the values on higher-end properties. When a program ends like this folks will wait (stop buying) and see what the next narrowly targeted bail-out may be?
I'm sorry, but I certainly don't agree with any tax credits for buyers. Buyers don't need the incentives now as much as they will in the future when rates creep up.