Car dealers have trained and reinforced the public to think of only two things when buying a vehicle:
- How much do I have to put down?
- How much do I have to pay each month?
And also considered but more often than not immediately glossed over is, "How long is my loan for?"
Real estate people and their clients have all but ignored this important marketing lesson since the beginning of time.
Consequently, the price of a home, more often than not, is what is the basis for negotiation, not the monthly payment.
Congress is currently considering giving those who buy homes in 2009 a rebate. The smallest number being tossed around is $7,500 and the biggest is $15,000.
The moment this legislation becomes law, the "net price paid" for homes being bought will increase. And for most it will increase by an amount that is equal or greater than the rebate.
Those who have the opportunity to purchase a home would be wise to consider doing so BEFORE the rebate becomes an actuality.
See your Realtor.
BILL CHERRY, REALTORS
DALLAS - HIGHLAND PARK
Our 44th Year Selling America!
214 503-8653
800 314-7110
Bill, are you wording it this way because you're saying the $7500-15000 is also considered a loan that the consumer has to pay back? If that's not it, can you explain what you mean, as I can't imagine you mean we'll see some automatic appreciation on homes with this *rebate*. Thanks!
I have to admit, I am not understanding your statement either. It sounds like you are saying the value of the home will increase by the tax credit, but I don't think that is it. I'm with Donna...we need more verbiage!
Within moments of the tax credit becoming law, the prices actually paid for most homes will tend to have increased by about the same amount.
In otherwords, the people who will profit will more likely be the sellers, not the buyers.
It's the same principal as when interest rates fall, prices rise; when interest rates rise, prices fall.
If you are a potential buyer and you want to increase your chances of winning this round, negotiate your contract in advance of the tax credit becoming a "for sure" thing
Hi Bill,
Kinda like when property tax rates are cut, you can bet the assessed values will be higher.
Bill - That is a very different way to look at it! And it certainly has some validity. It the same as folks sitting on the fence waiting for interest rates to drop, only to have the price of the house rise because of it :-) Great post.
Bill, I'm not so sure prices would go up an equivalent amount in this recessionary economy. If the rebate causes homes that are not selling to actually sell at all, we will have a winner.