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Pitching In, Posted by Vince

I’m a crazy baseball fan.  One of my hobbies is authenticating professional baseball bats.  While I attended REALTOR® meetings this week in Washington, D.C., the city was abuzz with talk of Stephen Strasburg, the 21-year-old phenom pitcher who debuted his awesome skills at the Washington Nationals stadium on Tuesday night.  He was everything the city hoped he would be.  He struck out 14 batters and threw over 100 mph.

Strasburg had a lot of pressure riding on him as he walked out onto the field before a sold-out crowd.  Similarly, REALTORS® have faced enormous pressure this year, too.

Thousands of potential homebuyers signed contracts in good faith this year so they could take advantage of the Homebuyer Tax Credit.  These people followed directions and put contracts down on homes before the April 30th deadline.  However, approximately 75,000 people may have trouble closing on those homes by the June 30th due date because of hang ups with appraisals and distressed sales.

Loan officers are up against a wall right now trying to process a huge amount of applications in less than three weeks.  That’s why NAR is urging the government to extend the closing deadline for the tax credit.  Senators Harry Reid (D-NV), Johnny Isaakson (R_GA), and Chris Dodd (D-CT) introduced an amendment yesterday that would extend the deadline to September 30th.

Even though Washington is thrilled about how Strasburg could transform the Nationals franchise, everyone knows a baseball team isn’t about one player.  That’s why NAR is asking for members of Congress, regulators, and the Administration to work as a team with the real estate community and be flexible on the June deadline.

Mind you, we’re not asking for an extension on the entire tax credit, just on the closing deadline.  We’ve taken some criticism for this.  Some are saying we shouldn’t meddle in government business.

What we’ve asked for isn’t meddling at all.  It’s pitching in.  We’re doing our part as advocates for consumers and the real estate industry team.  Our goal is to see every REALTOR® be as successful as possible this year and to see elligible consumers take full advantage of the tax credit.

In order to do that, we’re asking the government to be flexible.  If this helps stabilize the housing market and get the economy going in addition to helping more members thrive in 2010, I’m ready to pitch in and support it!

The boon of the tax credit isn’t just that one million more Americans bought homes.  The real gold mine is that it helped stabilize falling home values all across America.  Without the tax credit, economists projected a further 5 – 10 percent decline.  But today, home values are largely stable.

Thank you, REALTORS®, for supporting the tax credit and getting the American economy moving again!

I’ve always known there’s a lot to be learned from baseball. – Vince Malta, 2010 Vice President and Liaison to Government Affairs

Comments
  1. WHAT ABOUT THE TAX CREDIT?

    Does anybody see the economic consequences if home buyers who have qualified for tax credits are not afforded the right to extend the closing deadline of June 30, 2010?

    There is no argument that the tax credit gave a much needed jolt to the housing market and took thousands of abandoned and foreclosed homes out of inventory. It allowed many, the opportunity to be a homeowner for the first time or at least the first time in many years. It gave existing homeowners the ability to move up or move down.

    For many, that dream of homeownership is about to vanish!! We are about to pull the carpet out from under them.

    Qualified buyers who could never have considered a home purchase without the tax credit are anxiously planning to make their move.
    But wait…. Stop packing…Are you one of the 5,454 short sales scheduled to close before the deadline in four Central Florida counties alone (Orange, Lake, Seminole, Osceola)?
    That number represents 62% of all sales scheduled to close in the same time.
    • How many met the deadline for contracting by April 30, 2010 and think that it is a done deal?
    • How many of these closings are not even approved by the third party lender/investor?
    • How many require financing?
    • Can the underwriters and closing agents get the job done? The June number of expected short sale closings is nearly double the average closings in a month without including bank owned/REO or without closings without special provisions.
    • How many of these contracts will not make the June 30th deadline? Anybody want to guess?
    Now, take that number and add the balance of the 67 Florida counties and then add the number of contracts that will not close in 51 other states in the country.
    WE COULD SEE AVAILABLE INVENTORY INCREASE BY A MINIMUM OF 30% AND FORECLOSURES INCREASE BY NEARLY THE SAME.

    Could this have been predicted? Without a doubt!!! Every real estate blog & magazine article has commented on the bureaucratic nightmare involved in getting short sales closed. Did anyone really believe that a short sale contract initiated on April 30th would close by June 30th? No, but I’ll bet a large percentage of these contract offers were submitted many, many months ago.

    The economic recourse will cause a domino effect felt down the chain, from the Realtor®, the mortgage broker and the closing company, all of which depend on that closing as their source of income. It will be reflected in future statistics on spending ability and will create a reversal of economic recovery nationwide.

    Without a doubt buyers will be heartbroken, some even mad and looking for someone to blame. But who is to blame? Has someone not fulfilled their due diligence? Why hasn’t Congress taken note of this problem and created a conditional extension? Or was the response to the tax credit larger than expected and the budget been depleted and funds dried up? We were never told that the offer was on a first come, first serve basis. I guess Congress can giveth and Congress can taketh away.

    Maybe I should look at the bright side. My leasing division should be in high demand (unless all my managed properties have been foreclosed upon)!!

    Claire Schwarz, GRI
    REALTOR®-Broker/President
    Claire Schwartz & Associates, LLC
    Orlando, Florida

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