Fritz Pfister

Attention first time home buyers. You have 20 days to get yourself pre-approved for a home loan, hire a buyer agent, find the right home, and secure that home with a purchase contract, if you want to benefit from the first time home buyer tax credit of up to $8,000.

Any buyer entering a purchase contract between October 16 and 31 risks missing the deadline for a November 30 closing. The system is becoming overloaded, lenders, Realtors, appraisers, underwriters, and title companies only have 24 hours in a day. Snooze you lose.

Yes there is talk of an extension of the current tax credit, or a completely new tax credit being introduced in committee in congress. There are absolutely no guarantees any extension to the current tax credit or new tax credit will be passed.

As reported in the SJR September 25; The Brookings Institute said extension of the credit “would be a mistake” at a time the federal deficit is soaring. The estimated $15 billion dollar cost of the tax credit is twice what was projected when the program started. OK, I can see this point of view, but when you have the congress and president quadrupling the annual deficit beyond the record annual deficit set in 2008, with $1.8 trillion in deficit spending in one year, the $15 billion is only .008% of the total. Two questions; where in the hell is all the rest of that $1.785 trillion going in one year, and why in the hell would you want to cut the portion of the quote “Stimulus” plan that is actually stimulating the economy?

The SJR went on to say; The study also warned that an extension might re-inflate the housing bubble that caused the crisis in the first place. Say what? I’ll take a double of whatever they’re drinking over at the Brookings Institute! New home sales jumped an incredible seven tenths of a percent in August bringing new home construction all the way back to only 60% below the highs, and existing home sales fell in August 2.7% for the first decline in five months and stand only 45% below the highs of the sellers market.

Is The Brookings Institute really saying that extending the tax credit would cause a 160% jump in new home construction? If that is accurate then that should be the reason to do it. Millions of jobs would be created.

Secondly The Brookings Institute must not understand the housing bubble was not created by tax credits. The housing bubble was created by The Community Redevelopment and Investment Act by Carter in 1977 and put on steroids by Clinton in the 1990’s through Fannie Mae, Freddie Mac, and HUD. While simultaneously Greenspan and the Fed kept interest rates low for too long in response to 9-11, and the mild recession underway when Bush took office.  

When the Bush Administration through the SEC went to congress to reign in the abuses, the shining stars of the left, Maxine Waters, and Barney Frank blocked the SEC in 2004 stating in committee they saw no impending problems in Freddie and Fannie. Several years later Freddie and Fannie had to be taken over by the government costing tax payers hundreds of billions of dollars, and continue to run tens of billions in the red today.

If were not for The Community Redevelopment and Investment Act the abuses that followed on Wall Street would never have occurred, and the financial meltdown of 2008 would have been avoided. The TARP bailout became a fraud when hundreds of billions of dollars went to Wall Street Giants, National Banks, AIG, and to buy GM, and Chrysler, and not for the stated purpose of buying up toxic assests. Tax payers were snookered!

So Brookings is now saying $15 billion will break the bank by inflating the deficit? Brookings should listen to my recommmendation that the current Stimulus Plan be voided, cancel the remaining $630 billion in liberal non-stimulative pet projects, and double the money to $150 billion for infrastructure improvements, and implement a $10,000 tax credit for all home buyers, increasing to $15,000 for the purchase of new home construction. Then we could have a chance at a real recovery, and putting millions back to work.

What does all this mean to first time home buyers? Because the tax credit has helped stabalize the biggest housing slump in three decades, because it has worked so effectively as do all tax credits, and tax reductions, because it makes absolutely perfect sense to extend, what do you think the congress full of economic geniuses will do?

In other words take the bird in the hand, and not the two in the bush. In my March 8th blog ‘Historic Window of Opportunity Now for Home Buyers” you were put on notice this is the year to buy a home. Interest rates incredibly have remained at historic lows. There is little doubt this will not last. There is real potential for skyrocketing interest rates in the near future due to the never seen before spending, borrowing, printing of money, and the most massive increase in national debt, and unfunded liabilities in our history leading to inflation and higher taxes. Americans will have to pay some day, and it is going to be painful.

This does not even take into consideration the hidden taxes contained in the proposed Cap and Trade, and Health Care Albatrosses working their way through congress, that in my opinion if passed, will extinguish any hope for an economic recovery. How does the $15 billion compare to the estimated $3 trillion these two bills will add to our growing deficits and obligations?

Now is the time to buy a home, especially if you are a first time home buyer. This in fact could be a once in a lifetime opportunity. By the time we return representatives and leaders to national office that have an ounce of economic sense, reign in spending, taxes, and illegitimate legislation, it may be too late to correct within our children’s or grand children’s lifetimes.

I repeat, first time home buyers you have 20 days to get your act together and get a purchase contract negotiated for a home. I may be wrong, but I’ll bet you that you’ll never see interest rates at or below 5% on mortgages again at the same time you can get up to $8,000 back from Uncle Sam. Better get with it!

Make this a great week from Fritz and Kristie Pfister and The PfisterSuccess Team, Inc. of RE/MAX Professionals Springfield. The only thing worse than missing out on this once in a lifetime opportunity to buy a home would be to buy the wrong home at the wrong price. With over 2000 closed sales in the books we have the experience, and the integrity to help you make the best purchase you can. Call 652-7653.

The opinions expressed here are solely those of Fritz Pfister, and not those of RE/MAX Professionals of Springfield, or RE/MAX International.