My Tax Credit Experiment

The First Time Home Buyer Tax Credit may be a thing of the past, but just in case the opportunity miraculously reappears, here's a true story you may want to keep in mind:

Several months ago when Jane and Bill told me they are planning to relocate closer to Bill's workplace, we had "The Timing Conversation". In a market as challenging as ours, timing is no less important than price and condition, and when you add a Tax Credit deadline to the mix- time is truly of the essence. But Jane raised some concerns about putting the property on the market before moving out, referring to the impossible mission of keeping the house in pristine condition with 2 toddlers living on premises. It would be better to wait until the end of school year so "D day" was slated for 6/21. By then, Bill and Jane and the kids would have settled on their new house, moved out and maybe invested some money in touch ups, painting and appliance upgrades for the upcoming listing.

But then came my Open House on 4/11 for another listing in the area. Not that I'm a big open house fan (we'll leave that hot topic for another post) but the weather was perfect, we just had a drastic price reduction and oh yeah, that Tax Credit was still around so I figured why not? It turned out to be quite a busy afternoon and it suddenly hit me how many ready and willing First Time Home Buyers came through that front door. With less than 3 weeks to credit deadline- Buyers were still out there, desperate to find something. There's simply not enough inventory to catch up with the demand.

Armed with an epiphany and no real plan I called Jane and Bill as soon as the Open House was over. "This is going to sound a little crazy", I said, "but how would you feel about putting your house on the market slightly ahead of schedule..." A long moment of silence followed and I quickly added "as in Tomorrow". "TOMORROW???" I backed up a little to explain: "You see, there are Buyers out there that are doing everything they possibly can to take advantage of the $8000 tax credit. They are looking for your house at this very moment- but they can't find it. And this pool of super motivated Buyers will have shrunk drastically, if anything left of it at all, by 6/21". Then I went ahead to suggest my Nothing to Lose approach: let's get the house on the market, with the clutter, with the kids and with all the worries HGTV plants in Sellers heads when it comes to showing standards, and we can just try it until the end of April. "What's the worst that could happen? If this 2 week experiment fails, we're back to original plan." They agreed.

We were getting a decent amount of showings and on the sixth day on the market I did an Open House. I would never have imagined the house could hold that many people at the same time! There was this great energy, positive feedbacks- a real buzz in the air. That open house resulted in 2 competing offers and an over asking price winning bid. I don't know who was more amazed, the Sellers or myself. What started out as a spontaneous, long shot idea, ended up as a winning strategy!

Lesson for the future: next time you have a beautiful artificial incentive like a tax credit, don't ignore it, and find a way to help it help you. It's an opportunity that may never come back!