Tax credit has Realtors’ phones ringing as deadline looms

TAMPA, Fla. – March 9, 2010 – Kim and Al Langevin were ecstatic Friday to close on a new home in St. Petersburg. And they’re pretty excited, too, about thousands in government money they plan to use to spruce up the house.

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The Langevins are among a growing number of buyers rushing to find a home in time to cash in on the federal government’s tax-credit program. The couple, who moved from Lakeland, is eligible for up to $6,500.

They plan to put the money toward a swimming pool.

“We were worried we wouldn’t be able to close on time,” said Kim Langevin. “Getting that tax credit was a huge motivation.”

Real estate agents say their phones are ringing a lot more in recent weeks as folks scurry to sell and or buy homes before next month’s tax credit deadline.

“It’s been absolutely nuts,” said Paul De La Torre, a real estate agent with Keller Williams Tampa Properties. “I have showings galore and contracts are coming in left and right. I had 15 requests for showings yesterday.”

To qualify for the credit, buyers must have fully executed sales contracts in place by April 30 and the deal must close by June 30.

First-time homebuyers are eligible for up to $8,000. Buyers who have owned a home for five consecutive years within the past eight years can get a credit of up to $6,500.

Greg Armstrong, a broker with Coldwell Banker in Pasco County, said his agents’ phones are ringing, too. He credits most of the increase in traffic to improvements in the economy, but says the tax credit is also helping business.

“We’re seeing more people retiring to Pasco County,” Armstrong said. “I’ve had four or five retirees close in one week. In the past three years, I hadn’t seen that many. We had some retirement communities that went a full year without a sale.

“People are no longer afraid to do something. They were afraid for so long.”

Prices are indeed enticing buyers to pull the trigger, and more homeowners are putting their houses on the market in hopes of selling in time to buy another home. Some are trading up to bigger homes while others are downsizing.

Vernon Taylor, president of the Greater Tampa Association of Realtors, said he’s noticed more “serious” inquiries from potential sellers. In addition, he said, homeowners are more realistic about their house’s value.

Tampa Bay area sales prices have plummeted more than 40 percent since the peak of the housing boom. Home sales in Tampa-St. Petersburg-Clearwater rose 28 percent in the fourth quarter of 2009, and the median sales price hit $138,800. That’s down 42 percent since prices peaked at $239,600 in June 2006.

For those seeking to cash in on the tax credit, one challenge is closing in time. This is especially true for those trying to buy a home listed as a short sale.

Short sales often offer a buyer more bang for the buck because lenders allow the home to sell for less than the homeowner owes on the mortgage. Lenders sometimes cut the price deeply to sell the home so they can avoid foreclosing on the property.

Real estate agents estimate that as many as 60 percent of homes for sale are listed as short sales. However, lenders are often slow to approve deals, and real estate agents report buyers walking away in frustration.

That’s actually helping sellers who are not distressed, real estate agents say. That’s because they are able to close quickly and before the tax credits expire.

Some buyers, agents say, are even willing to pay a little higher purchase price to ensure they’ll get the tax credit.

Copyright © 2010 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services.