For Whom the Bell Tolls: The Tax Credit

The Federal Government extended and expanded the first time home buyer tax credit last fall. The National Association of Realtors was very aggressive in its effort to forward tax credit. The main reason was that the credit is one of the few ‘stimulus programs that directly benefits the average American Family. One of the intended consequences is that the tax credit has helped to stabilize markets, meaning average price, as we work through a huge inventory. For the average American, most of his or her wealth is ‘stored’ within the value of their home. The market correction has seen a significant reduction in that value. It is true that the value is only really ‘set or calibrated’ when one sells or refinances. Otherwise the value is a rough metric. It is also helpful to remember that the metric ebbs and flows just life the tide. It may be worth less today than yesterday, but will probably be worth more next year, etc.
The tax credit has been most effective and many new buyers have entered the market. In the first phase of the program, last year approximately 350,000 ADDITIONAL buyers made purchases. The second phase has produced similar numbers so far.
The second phase of the tax credit has a much broader reach. First time home buyers who are in sales agreements by 30 April 2010 and close by 30 June 2010 can receive a credit of $8000 for the purchase of a primary residence. There are family income limits; $125000 for individuals and $225,000 for married couples. The tax credit also has a repeat buyer provision which allow people who have owned a primary residence for three of the past five years to qualify for a $6500 credit. The income limits are the same and both credits have reduced benefits for individuals up to $145,000 and families to $245,000 of annual income.
Condominiums and single family both qualify, but second homes and non owner occupied investment properties typically do not. There is also a maximum purchase price of $800,000.
The important message now is that we have a month and a half to complete the search. That is you must find, negotiate, and have signed sales agreements by 30 April 2010 to qualify. You do have until 30 June to close, so you can move you family at the end of the school year if that is optimum for you and your family. It is very rare that the federal government gives its citizens money or land. This may be the first time since the land grants out West in the 19th century that the government is ‘giving away’ such value. Incidentally, granting land for compensation in lieu of cash is not new. In 1735, the King of England ‘paid’ many of colonial soldiers with land grants in East Greenwich. Do you notice a pattern, every hundred years, or so, there is a real gift from the government. This gift is significant, but the hour glass is almost out of time. Do not let the bell toll for thee or thee’s tax credit!

Make It So: Star Date 16 March 2010

Here is my NAR Officers Blog entry:


Growing up Star Trek was one of my favorite television shows. Although I never caught the Trekee virus, the story line and the characters were imprinted in my mind and most of 1960’s America. If you watched television as a kid, you watched Star Trek. Each program had a message: courage, team work, trust, the need of the whole versus the individual, and more.

Among the lines that developed in later Star Trek episodes, was the line from Captain Jean Luc Picard: “Make it so.” It is such a direct phrase that carried so much weight. It is a simple, clear command.

As of this Star Date, I am almost half way through the thirty-six month leadership cycle. Specifically, this is month seventeen. It is actually helpful that you have two years of internship, to prepare to be president of the association, because the National Association of REALTORS® is a large, multi-faceted, complicated organization. There is much to learn and understand. To be honest, it is overwhelming at times.

What is clear for me today is the mission of the organization: Serve the member.

For many organizations the customer is the focus. What truly distinguishes NAR is that the REALTOR® is not simply a customer, rather he or she is the ‘purpose’ of the organization. As decisions are made, the leadership team, and our professional staff, led by CEO Dale Stinton, consistently ask one question: “What is in it for the member?”

The Second Century Initiatives are a bold direct answer to that question: It is all about the member. From Right Tools Right Now to REALTORS® Property Resource, from Game Changers to House Logic, from the REALTOR® Federal Credit Union to the next series of programs to be introduced, one universal truth is present: it is for the member. Think about the fact that 800,000 of our members used ‘tools’ from the Right Tools Right Now initiative. Think about the fact that RPR is going to have 147 million records and analysis for REALTORS® to better serve customers and clients, at NO cost. Being about the member actually is more than just member focused. It is about providing the members with resources and tools to make more money. It is about business.

When Dale Stinton talks about competencies of NAR, he identifies a pyramid of skills: scale, leadership, and brand. NAR is ‘large’ enough to be effective, which is the scale side of the pyramid. NAR is courageous, industrious, disciplined, creative, forward thinking, outcome driven and bold. This answers the leadership side. The third side of the triangle is the REALTOR® brand. It is recognized, understood, and respected. Our association has mastered these competencies.

Now it’s our turn to do so in our own businesses.

What NAR does is make it possible for us to reach to the stars. It makes it possible for us to dream, think and realize BIG things. It makes it possible for us to say “Make it so,” and know that we will. – Posted by Ron Phipps, 2010 NAR President-Elect