Encouraging First Time Buyers

Today’s post from RIS Media was devoted to helping Real Estate agents try to encourage first time buyers to muster the courage to take the plunge into purchasing a home.  There were several different articles pointing out how the climate is so inviting and attractive for this type of buyer right now.  Prices are low, interest rates are low and there is that pesky little  tax credit of up to $8000 that the US government is offering in order to push hesitant buyers off the fence.  The article mentioned once again that this tax credit will only apply to homes that were purchased between January 1, 2009 and December 31, 2009 (that means CLOSED ESCROW) and that you don’t have to pay this money back — as you had to with the 2008 tax credit.  It also mentioned that you don’t have to be a first time buyer, you only have to have NOT owned a home for the past 3 years. 

As I said, these articles were really directed towards agents, making the point that if you don’t know what is out there in the way of incentives — how will your clients? 

One of the articles was on how much home can a buyer afford to purchase.  The author made a great case for making sure that we did not advise potential buyerson the amount that they could afford based on some pat formula made up of monthly income and a standard list of expenses.  Each individual borrower is different.  His advice is to figure out what the potential borrower’s normal living expenses are (food, clothing, insurance, income taxes etc. etc.)  and THEN work around those.  This way a borrower/buyer will not be caught with a mortgage that forces him to change his lifestyle.  Brilliant, I say.  Thank you Ralph Roberts for reminding me that we are working for the buyer (client) not the bank.