Contrary to popular belief, money does not grow on trees. Similarly, the billions of dollars are being sprayed with the burning of Washington in the housing sector does not run with the machine to print for free. Tax credits for first-time buyers some it means higher taxes for others. The most likely of others? The current owners, of course.
Our business is it? It’s hard to say. Of course, have problems: the “voice” of real estate can not decide if it is on the side of the owners of the house (your future customers of suppliers) and buyers (existing customers). REALTORS Plus are direct beneficiaries of the tax credit for housing. No matter, because the real blame for the sales going to appraisers, inspectors and bankers do not? They are screwing up deals and credit to the source. Agents are simply caught in the middle ….
Time, however, it is the real estate industry to stop playing both sides of the ship and decide if it works for Washington or consumers. Of course, anything to increase sales today, even if it means prolonging the recovery of housing in the future! The problem is that some owners have long memories. They may feel they have already paid their “commission” of taxation, the next time you go to list your home through an intermediary.
Like all government actions, the current tax credit is not really helping real estate agents seeking a career in real estate. As the cash for junk car temporary credit – the tax credit is distorting the housing market. It is the source of false expectations on the part of consumers, changes in prices and purchase decisions: vendors will support the reduction distorted from their homes by $ 8,000 for the recovery of market levels, believing (not unreasonably) that buyers have to spend extra money to Uncle Sam
Buyers can return decision-making and reasonable offer (and the risk of paying higher mortgage interest rates) to believe that Congress extend the program or adopt another type of treatment, such as preferential housing “in the future. Caught in the medium, REALTORS cover their bets even damage your credibility and reputation as the “professional expertise” that is supposed to help consumers sort out everything.
And a hidden consequence of the tax credit is that the market will slow further – because the money must come from somewhere. That “somewhere” can be confusing, but in general everything else, the money could be used to boost the economy. Especially for those who pay taxes, and small businesses started in the office of homeowners every day. Most new jobs are created by small businesses. And smaller companies are started at home. Ironic, is not it?
The unintended consequence of increased housing credit “could be the rise in unemployment. People without jobs do not buy houses. Some even lost.
There is an old story, as economists say (some prefer to forget): A proud throws a brick through the window of a baker. The bad news is that the baker has a broken window. The good news is that the manufacturer of glass on the street in a new window to do so.
The “unwanted” result, however, is that the tailor in front lost a sale – because the baker has to take money from manufacturers of glass instead of buying the new suit he had saved for. Without the additional sales, demand is close his shop. And if the glass broke, is believed to have increased the local economy by stimulating the glass manufacturer, has actually caused the involuntary loss of employment elsewhere. Not to mention the Baker used clothing for another year.
It is important to remember that this is a fully refundable tax credit. This means that taxpayers in a return of the entire 8000, even if your total tax bill – the amount of withholding they paid during the year was less than that amount. In other words, buyers who qualify (especially since he bought a house for the first time) will receive $ 8000 knocked off their taxes, and in most cases, get “refund” that was never paid. This means that money taken by someone else in the economy.