Written by a REALTOR®
Problem
Among the many topics around the first time home buyer tax credit, the most prevalent are a November 30th, 2009 extension, tax credit fraud and the tax credit cost to the tax payer. According to Reuters: The National Association of REALTORS® (NAR) is urging members to e-mail elected officials to “extend and expand” the homebuyer tax credit. The NAR says nearly 170,000 people have contacted their Congressional representatives so far. Article
Cost
Before the Subcommittee on Oversight, Committee on Ways and Means, House of Representatives. The United States Government Accountability Office reported (report summary) on October 22, 2009 that according to preliminary data from IRS, as of August 22, 2009, over 1.4 million taxpayers have claimed the FTHBC for homes purchased in 2008 and 2009. This represents total foregone tax revenue of about $10 billion through August 22, 2009.
Questions
Of course my fellow REALTORS® want the tax credit to be extended, it makes the entire industry money. But there’s a few questions to ask:
- Is the tax credit going to buyers who would buy a home anyway?
- Is it fair to the non-home buying tax payer?
- Is the level of fraud associated with the program acceptable?
- Can the U.S. Government afford it?
- Is this another debt we want to pass on to our kids?
Solution
Last summer I was reading Tribes, a terrific book by Seth Godin, where he details how one person can change an industry. So I said “time to get going and change an industry!” REALTORS® should privatize the $8,000 first time home buyer tax credit and open it up to all buyers. It doesn’t cost the government a penny. No more fraud or the cost of chasing the culprits. Greater stimulus for the economy because the money is available to all buyers. REALTOR® privatization will be ongoing with no distractions for our government so they can focus on bigger issues.
How
- Home Buyer Rebates: The selling office on every real estate transaction should rebate all earned commissions over 1 percent to the home buyer.
- Help world children too: With every closed transaction the selling office should also buy one pair of Tom’s Shoes which means a child who needs shoes will get a pair for free.
According to the 2008 National Association of REALTORS® Profile of Home Buyers and Sellers, 87% of all home buyers used the Internet as an information source Realtor.org. That means while foregoing the traditional Realtor activities and with the buyer actually doing the heavy lifting of researching the neighborhoods, schools, demographics and homes. The REALTORS® are still pocketing the typical 3 percent commission for selling the property. Now is the time for change in this archaic business model. Further, here is what the Department of Justice says about home buyer rebates: D.O.J.
What to do
Put this article on your Facebook page, Tweet the link: http://blog.lionssharerealty.com and email 10 people to do the same. Ask readers, who agree, to write their Governor, Senator and congress person to end the $8,000 first time home buyer tax credit. And finally, encourage home buyers to only work with REALTORS® who rebates part of their selling commission.
As a caring tribe we can make a huge difference.
California contact information:
Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814
Phone: 916-445-2841
Fax: 916-558-3160
Boxer, Barbara
112 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
(202) 224-3553
Feinstein, Dianne
331 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
(202) 224-3841
