The first-time home buyer tax credit, which Congress in February increased to $8,000 from $7,500 and eliminated the repayment requirement, is an incentive you'd expect consumers to be clamoring about. But many practitioners are astounded to learn that buyers in their markets who are prime candidates for the credit aren't even aware of it.

Ryan Gable, broker-owner of Starting Point Realty in Palatine, Ill., recently mentioned the credit to an architect who was attending one of his home buyer seminars. If anyone would know about the credit, Gable thought, it would be someone who’s involved in the building industry. But he was wrong. "It was like she won the lottery when I told her," says Gable. 

His brokerage, which focuses on first-time buyers, has pulled out all the stops to market the credit as a too-good-to-miss opportunity. In addition to touting the credit at seminars, Gable showcases the incentive on the home page of his Web site and discussed it in an interview with a local NBC affiliate TV station. "It’s really unbelievable the number of people who don’t know about it," Gable says.

Getting the Word Out

It's an information gap that Rochelle Gano, ABR^®, and her colleagues at New Tradition Realty in Vancouver, Wash., are also working hard to close. Gano's brokerage in March rolled out a spring home buyer seminar on how to use the credit. 

"I have a client I’m working with right now who’s using it," says Gano. "He specifically decided to buy because he heard about the credit. The seminar can reach people like him with the information they need."

In situations such as this, says Gano, the credit is an effective tool to get buyers off the fence. And it became an even better market booster on May 12, when Shaun Donovan of the U.S. Department of Housing and Urban Development announced that FHA has changed its rules and will now allow buyers to use the money up front for their down payment. 

Prior to that, there was no direct way to use the credit to get money before buyers received their tax return, and that was a major stumbling block, Gano says. Several state housing finance agencies—including those in Missouri, Ohio, and Tennessee—had confronted that hurdle with an advance loan program. But the NATIONAL ASSOCIATION OF REALTORS® wanted more to be done on the federal level, and in March urged HUD to give buyers access to tax-credit funds in a more direct way.

What's Your Marketing Strategy? 

Notwithstanding these shortcomings, there’s no doubt that the credit is a great benefit around which real estate practitioners can build a targeted marketing campaign. Since launching his education efforts, Gable says he’s seeing considerable interest from buyers, especially after the TV interview. "It’s starting to catch on," he says.

But a word to the wise, says Eunice Beekman, ABR®, CRS®, of House to Home Properties in Waupun, Wis.: Don’t let the looming termination of the credit—it’s authorized only until Dec. 1—dictate the haste with which you develop your marketing program. Shortly after Congress improved the credit in February, her brokerage quickly rolled out a home buyer seminar on the topic. But they gave themselves only a week to market it. The result: no registrants. "It was too last-minute," she says.

News Briefs: May 2009

Protecting the mortgage-interest deduction.

Lawmakers throughout Congress have signaled they don’t favor the Obama administration’s proposal to cap itemized mortgage-interest deductions for high-income households. The proposal’s effect would hurt more than the wealthy; it would destabilize housing markets at all levels and disrupt economic recovery, according to NAR. Even though opposition to the proposal is growing, the association continues to educate Congress on the issue, as with this ad that appeared in popular Capitol Hill newspapers.

REALTORS® Gain Victory on Banks in Real Estate

NAR’s 8-year battle to keep national banking conglomerates out of the real estate brokerage and management business ended with a win in March when President Barack Obama signed the 2009 Omnibus Appropriations Act. The legislation permanently prohibits banking regulators from taking any action that would make real estate brokerage and management permissible lines of business for federally regulated banks. 

"This is a great victory for the real estate industry and consumers," says NAR President Charles McMillan. If banks had been allowed to engage in real estate brokerage, it would have created anticompetitive and anticonsumer concentrations of power within the financial services sector, according to NAR.