Episode 19: Frank LLosa, owner of Frankly Realty, cautions buyers and sellers about the rush to buy or list as a deadline for the federal homebuyer tax credit approaches. To be eligible for the tax credit, buyers must be under contract by April 30 and close on the sale by June 30.
The "hurry up and buy" mentality among buyers can cause some to overpay for properties, LLosa says — something he saw happen as the previous federal tax credit program neared its expiration date.
"What’s better? Overpaying for a house by $10,000 or getting an $8,000 tax credit," he said. "Are you telling buyers, ‘Hurry up’? Are you using that as a technique to get them off the fence? Is it really in their best interest to help them rush before the tax credit?"
Sellers are rushing to get their properties listed in his market area in Arlington, Va., LLosa also said, and this flooding of the market with inventory could be counterproductive for sellers.
He said he tells sellers, "Keep in mind you’re going to have tons of cmopetition," and those properties that don’t sell during the tax credit eligibility period run the risk of stagnating on market. And that could put downward pressure on prices.
Watch past episodes of the Wheel Estate Cam.
Frank Borges LLosa is the broker, founder and owner of FranklyRealty.com, a real estate brokerage in Falls Church, Va. He is the creator of the Trust Me I’m a Realtor blog and multiple listing service wiki site FranklyMLS.com. You can follow him on Twitter: @franklyrealty.
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