Comments on: Let The Home Buyer Tax Credit R.I.P On November 30

By: JimAtLaw

JimAtLaw — Thu, 01 Oct 2009 20:43:02 +0000

Er, I meant assuming you don’t count them as waste.

That’ll teach me to proof my rants…

By: JimAtLaw

JimAtLaw — Thu, 01 Oct 2009 20:42:06 +0000

Now, instead of the program costing $8,000 per buyer, it costs $43,000.

Of course, the Realtors get more than $8,000 on the average sale – so you figure, the buyer gets an $8,000 benefit, the Realtor gets $12,000 (using a roughly $200k average home price), and the government is only wasting 50% or so of the money, assuming you count cash payments to their campaign contributors as “waste” too (and I assure you no politician or Realtor thinks that!).

By: AZSALUKI

AZSALUKI — Wed, 30 Sep 2009 16:00:17 +0000

i would add a 4th point to say that “buyers” are paying a lot for very little return as well. I know a couple in chicago that are scrambling to make sure they get into a condo and close on it prior to nov 1. they are looking in the 250-300K range, and, of course, have a realtor pushing them because these condos “were going for 400K 2 years ago…what a deal!!” so let’s say they buy one for 275K and they get the 8K credit. my math says the credit saved them a bit less than 3% of the price. i’m pretty sure if they weren’t in such a hurry to get the credit then they could hold out and negotiate more than a 3% drop in an asking price. the credit entitlement is another good point. one of the goals was to boost purchases this summer. if it’s extended then how many potential buyers (swayed solely by the credit) will just assume the credit will be here for a long time…maybe even increase to 10-12K??? it will become no incentive to buy soon at all. it will just be one more taxpayer subsidy in the form of a credit. it’s why we’ll never loose the mortgage interest deduction, or the earned income credit….they’ve been around for so long that it’s just become a permanent part of the tax code.