12 May 2010

Realtors, Builders Dangle Perks to Woo Home Buyers

The Detroit News

Some worry that sales will decline in wake of federal tax credit

Some players in the Metro Detroit housing and real estate industries have created their own home sales incentives in an attempt to keep alive the increase in business sparked by the now-ended federal first-time home buyers tax credit.

At the end of last year, an estimated 80,000 people in Michigan had used the tax credit of up to $8,000 for a first-time home purchase, according to the Michigan Association Realtors.

Many Metro Detroit real estate agents reported a surge of deals this year before the credit expired at the end of April, though exact figures are not available. A survey done last year by Coldwell Banker Real Estate LLC agents found that 34 percent of potential homebuyers said the tax credit was the reason they were searching for a home or condominium.

To maintain the home sales momentum, Coldwell Banker launched its "Buyer Bonus Sales Event," a promotion that essentially extends the monetary bonus of the federal program from May 1 through July 31.

Participating Coldwell real estate agents are giving a 3 percent credit up to $8,000 of the accepted offer price to homebuyers who sign a contract before the deadline. It is unclear how many local sellers have signed up for the program, said Kelly Sweeney, CEO of Coldwell Banker Weir Manuel in Birmingham, which is participating.

"What we have to do now is convince potential buyers that there are still historical low interest rates, great prices and sellers willing to make deals," Sweeney said.

Luxury homebuilder Toll Brothers Inc. also is trying to pump up interest by continuing several incentive programs it began last year. One approach allows buyers up to 14 months to build their new home, which is aimed at giving customers more time to sell their existing home.

"We are finding a lot more people willing to look (for homes) since last fall," said Nadia Mekled, senior sales manager for Toll Brothers in Michigan.

Beyond the formal discounts, many sellers are willing to bargain to seal a deal, local real estate agents said.

"Sellers are used to, by now, doing what it takes to move their home," said Claire Williams, a Realtor with Remerica Hometown One in Plymouth.

Still, she expects a drop in home sales at least in the short term because of the end of the federal tax credit.

"I think our job (as Realtors) is to convince potential homebuyers there are still historic prices and low interest rates," Williams said. "And they need to act on that now."

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