Think before you leap - ending tax credit

[gpeach]

So we were on the fence and leaped this past summer before the tax credit ended. Well 9 months later our home has decreased in value as the other homes they are builiding here with more space and options for less. Prices are falling on already built homes. In our market we would have been better off to wait. To top it off collecting this 8000 is a bit of a nightmare for some. I hope it does not go too much longer for me. 

If you are thinking of buying a home the 8000 sounds great. But what if the market continues to go down? I am being sincere that you want to look at the big picture. Wait for the perfect house that is a great deal. Don't buy it quick because of the credit. That is what the govenment wants. That is what we did and won't get into details but wished we had looked more and not settled so quickly.  

[Anonymous]

Thanks for that post.  I keep getting pressured from people around me to make the deadlines, but I'm not going to make a $200,000 decision on an $8,000 tax credit.    I agree with you that it shouldn't impact your decision to buy.  I hope things get straightened out for you.

[WD]

This has been our (wife and I) dilemma as well...whether to "rush" to get a house before the end of April.

It's not strictly the tax credit, as we HATE our apartment and our lease would be up in May.  The only positive, is we're able to break our lease, so even if we renewed our lease, we could still buy a home in the near future.  Right now, I'm at the buy-when-ready stage and planning on getting a house before July.

[hawkeye33]

Here's how I look at it.

The $8000 credit should absolutely impact your decision to LOOK.

The credit MAY impact your decision to BUY.

It should NEVER impact (or trigger) a decision to SETTLE.

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@Anonymous wrote:

Thanks for that post.  I keep getting pressured from people around me to make the deadlines, but I'm not going to make a $200,000 decision on an $8,000 tax credit.    I agree with you that it shouldn't impact your decision to buy.  I hope things get straightened out for you.

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[rockymtngrl]

I have read several articles during the time they have been offering the credit & loan that it is actually helping keep prices up. Sellers know they can ask for/get a little more because buyers are getting a credit. I've read several articles/experts say that when the credit expires housing prices are going to fall. In the past couple of weeks I have also read a couple of articles about how another round of foreclosures are about to hit and banks are going to have to start moving thier shadow inventories so prices are expected to fall.

[Anonymous]

I agree that the tax credit should not be the reason you buy. We knew we were going to buy last summer, if we found the right house. We had decided that the year before - because last summer was the right time for us, before we even knew there was going to be a tax credit. It just so happens that we found the house we wanted when the tax credit was being offered. Neither of us would have bought something we really didn't want just to get the tax credit.

[ArmyStrong]

I'd agree that the tax credit is a good thing, and also that you shouldn't buy just because of it. Housing prices are gonna go up and down. It's called a cycle. I'm assuming the average person gets a 30 year mortgage. That's a relatively long time. Home prices may go up and down several times over a 30 year period. I also wouldn't wait because they say house prices are still going down. Not to sound cliche, but no one can predict when home prices will rise or drop. I can't speak from experience, but I don't think I would worry as a new homeowner about the short term value going down after I purchase, unless of course you don't plan to stay in the house for long. My $0.02.

[Jazzzy]

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@rockymtngrl wrote:
I have read several articles during the time they have been offering the credit & loan that it is actually helping keep prices up. Sellers know they can ask for/get a little more because buyers are getting a credit. I've read several articles/experts say that when the credit expires housing prices are going to fall. In the past couple of weeks I have also read a couple of articles about how another round of foreclosures are about to hit and banks are going to have to start moving thier shadow inventories so prices are expected to fall.

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+1

I know someone who works in finances for a national home builder. They look at the tax credit as a handout to sellers.

Yes. Sellers.

[Anonymous]

My $8000 (when I get it) will go straight towards paying off the loan

[gpeach]

I hope those who do buy now find a wonderful home that is a good value. In my opinion alot has changed in the last year. If the credit had never happened that person in finance with a national builder may have lost their job. It helped buy them a year. Now they may be in a great area that was not affected. But out here in smaller not so happening towns it is a different story.

We and likely many others may have waited just a little longer to see how things were going before making such a huge purchase. Was it the credit the only reason? No. Was it a motivator? Yes. I wish we would have waited. We really were not sure what we wanted. We needed to look at more homes. At the time there were not many homes on the market. Agents were so busy and loan officers too. Of course reading interest rates going up, housing prices are going to go back up...... a bunch of bull. There are foreclosures popping up now. Great deals. Some brand new homes from home builders that went out of business.

I posted to remind people who are now in the position of buying but not sure if they know what they want yet. To be sure is better than the credit. That 8000 is alot of money. Yet it is not alot of money. It does not go far in remodeling. If people (agents,loan officer.....) keep reminding you about the credit to get you commit. I do believe that now is a better time to buy than when we did this summer. And combined with the credit a even better deal.

Trying to collect it is whole other thread.

Message Edited by gpeach on 03-03-2010 09:00 AM