Some Real Estate Companies Replacing Homebuyer Tax Credit with Private Incentives
Some real estate companies are attempting to recreate the demand that vanished when the federal homebuyer tax credit expired on April 30, sparking a drop in pending home sales the following month. Brookfield Homes, a homebuilder based in San Diego, launched a new initiative this week to provide referred homebuyers $10,000 in credit toward closing costs, options or upgrades. Through the program, Brookfield gives $5,000 for referrals. The homebuyer must be a first-time visitor to the Brookfield community and make the purchase before Aug. 31. Lora Heramb, vice president of sales and marketing for Brookfield, said the program is an attempt to replace the homebuyer tax credit, but it is too early to tell if it will be effective. “We’re hoping to stimulate anything. California has been hit pretty hard, especially in the last two or three months. I am hopeful it will bring additional buyers to us,” Heramb said. Lawrence Sanek, broker and owner of Castle Dream Real Estate in Florida, began a new campaign to offer buyers a 1% rebate off the purchase price of the home. Buyers must register with the company and fill out a coupon found on its website. A third-party real estate agent from another company cannot represent the buyers hoping to cash in on the offer. Coldwell Banker Real Estate launched its cash-back program May 1, the day after the tax credit expired. Homebuyers can receive up to an $8,000 credit at signing — $10,000 for California homebuyers. A spokesperson for the company said the program is “doing very well,” and in high demand from its subsidiary brokerages looking to stimulate their markets. More than 20,000 Coldwell Banker sellers have signed up for the program. Homebuyers looking to get the credit must purchase a home before July 31. After the homebuyer tax credit expired in April, pending sales of existing properties fell 30% in May, according to the National Association of Realtors (NAR). Congress passed an extension of the closing deadline for last-minute homebuyers who signed at the end of April, but since the expiration, some economists are signaling a double dip in the housing market. “The federal government did its part to encourage millions of Americans to achieve their dream of home ownership with the help of the homebuyer tax credit,” said Jim Gillespie, president and CEO at Coldwell Banker Real Estate, when its program was launched. “We are confident that this private sector solution will represent a significant step toward continued recovery of the housing market.” Write to Jon Prior.