Crye-Leike, REALTORS Agents Show How The Stimulus Credit Lures First-Time Buyers – The Memphis Daily News, Memphis, TN, USA

Crye-Leike, REALTORS Agents Show How The Stimulus Credit Lures First-Time Buyers – The Memphis Daily News, Memphis, TN, USA
RITE OF PASSAGE: Tyree Nesbit III, left, bought his Cordova home in March. Kay Paul of Crye-Leike helped him through the buying process. PHOTO BY ERIC SMITH

ERIC SMITH | The Daily News

 

Tuesday, April 28, 2009

 

Like many people, Tyree Nesbit III became addicted to the 24-hour news networks during last year’s presidential campaign.

 

That habit of keeping up on current events carried over into the new year as Nesbit followed the new administration’s efforts to jumpstart the economy with programs like the American Recovery and Reinvestment Act of 2009, aka the stimulus bill.

 

As Nesbit overdosed on news shows, he became familiar with plans to salvage the housing market through the stimulus bill’s tax credit for first-time homebuyers.

 

Nesbit, who had recently moved back to Memphis after graduating from college, and was looking to buy a home.

 

Nesbit already was familiar with the existing tax credit, which was, in effect, a $7,500 loan that required repayment. And while that would have been enough of an incentive to move forward with a purchase, the new bill – an $8,000 credit that did not have to be repaid – made the deal too good to pass up.

 

“I had saved up enough money to put enough down on a house that I wanted to get in the price range I was looking for,” said Nesbit, who works for the construction and engineering department of AT&T. “But that would have depleted my savings significantly and I would have been in an uncomfortable position once I got in that house. With the tax credit, if I put $8,000 down on a house, I would get that back. For me, that was the incentive.”

 

EASY MONEY

 

The first-time homebuyers tax credit of $8,000 is starting to gain momentum as word of the program spreads. Anyone who has never owned a home or who hasn’t owned one within the past three years is eligible.

 

The credit counts only for the purchase of principal residence and for homes closed between Jan. 1 and Nov. 30, 2009, and it doesn’t have to be repaid unless the recipient moves from that home within three years.

 

Donnie Chambliss, owner of Chambliss Builders and Chambliss Realty Inc. and president of the Home Builders Association of North Mississippi, knows quite a few people who have taken advantage of the program.

 

One thing he wants people to understand is the $8,000 check can still be garnered for last year’s taxes using an amended tax return.

 

“Hypothetically, if you’ve already filed your taxes for 2008, and you make your home purchase after that fact, you have an option: You can wait until next year to get your money then, but if you want to get it sooner rather than later, you simply need to file an amended return, Form 1040X,” he said.

 

Chambliss added that there’s another tax form – Form 5405 – specifically for the tax credit application, giving approved applicants quick access to the money. As more people learn that they can have the money within a few months, he hopes it will provide a spark the housing market desperately needs.

 

“We are already seeing people coming to our model homes and looking at houses that know about the tax credit,” Chambliss said. “It is motivating their investigation. It is motivating their home search. It is making a difference.”

 

WORD GETS AROUND

 

Barbara Becker, an affiliate broker and vice president at Crye-Leike’s Germantown office, is an agent who has seen the tax credit pay dividends for a client. Becker’s son, Matthew – also a Crye-Leike agent – bought a home in March and is using the money for repairs.

 

Becker has another client who went through the down payment assistance plan offered by the Tennessee Housing Development Agency. That buyer will use the tax credit to pay off that THDA loan, reducing her debt – a common pitfall for first-time homebuyers.

 

As Becker noted, the program has been especially beneficial for young people who barely have enough for the down payment or for furniture, or who are buying homes in need of immediate upgrades.

 

“They can qualify to buy the house, but then they don’t have the cash to make the repairs,” Becker said. “The $8,000 tax credit is coming in great for them because they can do the repairs that the home needs.”

 

Many of Becker’s clients are coming to her with questions about the tax credit, wanting to know if they can qualify for it. She said the buzz surrounding the program is finally growing.

 

“I think word is starting to get around,” Becker said. “It’s kind of word-of-mouth, especially among the 20-somethings that are renting.”

 

DISPOSABLE INCOME

 

A 21-year real estate veteran, Kay Paul is an affiliate broker and vice president at Crye-Leike’s Collierville office. She worked with Nesbit on the purchase of his home, which he bought with a low interest rate and at a low price. Nesbit paid $65,000 less than what the home sold for just four years ago.

 

Paul said the combination of good loan rates, good home prices and now a good incentive for homebuying should help push more qualified people into buying.

 

“Anytime you’re buying a new house, you need every dime you can get to do all the improvements and buy furniture,” Paul said. “The $8,000 spreads out among a lot of different people to stimulate the economy. Everybody should be screaming (the tax credit) from the rooftops. The value that they can get in homes right now, in addition to the interest rate, is just incredible.”

 

As for Nesbit, who was able to buy much more home than he would have without the tax credit, he will put half the money into savings and spend half for furnishing his home.

 

“I definitely plan on spending some of it,” Nesbit said. “I’m trying to do my part to get this economy out of the slump.”