Help for Selling Your House - Tax Credit Deadline Causing Home Buyer Frenzy
Are you selling your house? Were you thinking of taking it off the market for the winter? You should wait until November 30th. Why? According to Massachusetts real estate agents, first time home buyers are anxious to take advantage of an $8,000 tax credit scheduled to expire next month. (November 2009). Under the gun, many first time home buyers are actually creating bidding wars on lower-priced homes!
We aren’t holding our breath for a bidding war on our lower-priced Massachusetts home (on the market since May) but we have decided to keep it listed until mid November because of this tax credit. The tax credit incentive is a faint light of hope at the end of what has been an extremely dark housing market tunnel. This may be just enough of a boost for selling your house too.
Massachusetts Homes for Sale – The Competition is Tough
Trying to sell our house in this market, while asking a fair price, has proven to be impossible. Sure, we could price our home ridiculously low, but that would leave us unable to afford our next house. We bought this house when we first married and 11 years and two kids later, we are ready for a larger home, which we still think is the next logical step.
We invested a lot of time and money to make our nice house a whole lot nicer. Over the summer we finished our partially finished basement. We added a new full bathroom and bedroom. We now have a very nice four bedroom home competitively priced in comparison to other homes in our area.
We have had only three different families look at our home over the past six months. The home and property offers privacy, (a nice bonus) but the first couple thought it was too remote. While we have a nice front yard, the second couple wanted a nice back yard. Finally, the third party wanted a nice yard and privacy. Our home offers both, but still, it was not quite what he had in mind.
The competition is just so tough. Getting someone to even look at your house is a miracle. For months we have had to compete with bank owned properties. But with the expiration of the tax credit incentive looming, our luck has to change!
Buyers Scramble to meet the November 30th Tax Credit Deadline
The tax credit, which was approved by Congress earlier this year, is limited to sales finalized by November 30th. Since home deals can take up to 60 days to finalize, many prospective buyers are pressing to sign purchase agreements now so they don’t miss out on the credit.
In the larger Massachusetts cities like Boston and Worcester, buyers are flooding agents with requests to tour homes, cashing out retirement plans for down payments, and in some instances, creating bidding wars on the most desirable properties by competing with other home buyers. The impending expiration date on the tax credit has motivated some to speed up their home searches and revise their expectations. October is our month! I can feel it!
The tax credit is available to anyone who has not owned a primary residence in the last three years. There is talk in Washington of extending the credit, however no action is pending. In most cases, those buyers who are eligible will reap the benefit by paying up to $8,000 less in federal taxes.
John Schjolden, a Massachusetts real estate agent who specializes in bank-owned properties, said there is a growing buying frenzy because of the tax credit and shortage of affordable homes in the area. The entry level range for first time home buyers is between $150,000 and $250,000. Our house falls into this range, however, we are not located in South Boston, Dorchester or even Worcester for that matter. The fierce competition is in these cities. We have our fingers crossed that this buying frenzy trickles over to the remote, rural Massachusetts towns like ours.
Home Values on the Rise
The tax credit isn’t the only reason that prospective buyers are being lured into the market. Home buyers are inspired by the current low mortgage rates. Also, home values have been on the increase since April, according to the S&P/Case-Shiller Home Price Indices, which is a national index that measures repeat sales in residential markets. Bargains may soon be hard to come by. Fortunately for us, the number of available properties in Massachusetts was down 16 percent on August 31, compared with the same date in 2008 (per the state realtors association).
The light at the end of the tunnel I mentioned earlier, keeps getting a little brighter. If our home doesn’t sell by November 30th, we can only hope the tax credit will be extended into 2010, and then, there’s always next spring.
Have you staged your house for sale? Check out my hub on Eight Home Staging Tips.