One lesson real estate folks have learned, painfully, is that new legislation often brings significant changes.
One such piece of legislation making waves is the “End Hedge Fund Control of American Homes Act”.
Proposed to reshape the housing market, this act aims to address the growing concern that institutional investors, particularly hedge funds, are exerting significant control over residential properties.
So, what does this mean for real estate agents and brokers?
Understanding the Act
In a nutshell, the “End Hedge Fund Control of American Homes Act”… would force owners of a large number of “… single-family residences to sell their swath of homes to family buyers,” according to Shannon Thayer (New York Post) citing The Wall Street Journal.
It’s been bad enough that homebuyers face low inventories and high mortgage rates. To have to compete against the deep-pocketed investment firms makes it all but impossible for many buyers to remain in the market.
Under the proposed act, institutional investors would face restrictions on the number of single-family homes they can acquire.
Additionally, they would be required to hold these properties for a minimum duration before selling, aiming to prevent speculative practices that can destabilize local housing markets.
The Get More Listings Series is shown above. To learn more, Click Here.
What does this mean for real estate brokers and agents?
1. Increased Opportunities for Individual Buyers.
With hedge funds facing limitations on their acquisitions, individual buyers may find competing in the housing market easier.
This could lead to an increase in demand for your services, which is always a good thing, right?
2. Greater Stability in Local Markets
By curbing speculative practices and reducing the influence of institutional investors, the act aims to promote greater stability in local housing markets.
Real estate agents may benefit from a more predictable market environment, where fluctuations in inventory and pricing are less volatile.
3. Potential Challenges
While the act holds the promise of a more balanced housing market, it may also present challenges for real estate agents. Adapting to new regulations and navigating changes in market dynamics can require time and effort.
Additionally, some real estate professionals who have relied heavily on transactions involving institutional investors may need to diversify their client base.
When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazin
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct, response-driven articles written by real estate industry experts and engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you. Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
The Real Estate Marketing Planner is a powerful 6-Month Guide that strategically defines what marketing to do and when. Four key market segments include niche Markets, geographic farming, sphere of influence, and past clients. – Click Here
3. The Free Online Real Estate Business Plan
The Real Estate Business Plan allows you to enter your business goals for the year and get a breakdown of how many prospects, listings, closings, and so on are needed to reach your financial goals. – Click Here
4. The Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
“The party’s over for America’s Housing Market …,” blasts a headline from MarketWatch.com.
“Is The Housing Market About To Crash?” asks one at BankRate.com.
This is the real estate news that consumers are hearing daily. It’s quite challenging, in fact, to find positive news.
Even though there is positive news.
It appears that agents who want the good news pushed out to help counter the bad need to take control of the narrative.
If you pride yourself on keeping in touch consistently with those in your CRM, whether by direct mail, social media marketing, or anything else, blasting out the good news is not difficult.
Real estate consumers beg to differ with the media tale
A funny thing happened to the media narrative on its way to becoming an ever-more negative Nellie. Fannie Mae released its Home Purchase Sentiment Index®, proving that real estate consumers are more positive than the media thinks.
“Fannie Mae’s Home Purchase Sentiment Index® (HPSI) jumped 5.5 points to 66.8 in April, marking the highest monthly gain in two years,” Adam Barnes said at TheHill.com.
62% of those surveyed said it’s a good time to sell. This represents an increase of “… 5 percentage points month over month,” Fannie Mae suggests in a recent press release.
Optimism about the housing market from those who will actually be involved in it. Who would’ve thought?
There is more positive news
March was a great month for home sellers. According to ShowingTime, there was an increase in foot traffic through homes for sale (mostly in the Midwest).
The low inventory prevents many would-be buyers from continuing their home searches, so the news that showings increased is very good.
If you have fence-sitting homeowners, share this news with them. And, just FYI, “Not all regions fared the same in March,” according to the pros at ShowingTime.
“The overall increase in showing activity was driven by the Midwest, up 18% from February, and the Northeast, up 15%. The South stayed relatively flat with a monthly increase of 1.4%, and the West dropped 2.7%.”
Your part in the process
Sharing the positive aspects of the market with your potential clients is more important than ever. Blog, post to social media, and create direct mail pieces to grab their attention and fight the negative narrative.
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct response-driven articles written by real estate industry experts and engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you. Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
2.The Free 12-Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month Guide that strategically defines what marketing to do and when. Four key market segments include niche Markets, geographic farming, sphere of influence, and past clients. – Click Here
3. The Free Interactive Real Estate Business Plan
The Free Interactive Real Estate Business Plan allows you to enter your business goals for this year and get a breakdown of how many prospects, listings, closing, and so on are needed to reach your goals. – Click Here
4. The Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
What a weird time to be in the real estate industry. Whether you consider yourself a specialist or you’ll take on any client, nobody seems to know if we’re heading into a buyers’ market or not. At the very least, the experts seem to loathe to take a guess.
In July of this year, Emily Peck at axios.com declared that “Homebuyers retake the upper hand.” By the end of October, the media appeared to be as confused as our clients when Robin Rothstein at forbes.com asked the now very popular question, “Will Prices Drop?”
The elephant in the room is inflation and, as a result, rising interest rates. Buyers are feeling the pain, evidenced by mortgage applications being “… at their lowest level in 22 years,” Rothstein says, citing the Mortgage Bankers Association (MBA).
How can an agent prepare for the new year when we’re uncertain? Should you shoot arrows out in all directions and see what you hit?
There is a major gap between what buyers and sellers expect in 2023
A recent Zillow Group, Inc. survey of real estate agents finds that homebuyers are expecting prices to significantly drop. Zillow, however, says that won’t necessarily be the case: “Zillow research finds a rapid drop in prices is unlikely.”
Other prognosticators, however, have opposite opinions:
The experts at Morgan Stanley say that “… home prices will fall 7 percent, from the peak of pricing in June 2022 to December 2023,” according to the New York Times.
Moody’s Analytics extends its forecast into summer 2024, predicting a 10% drop during that time period. If we experience a recession, bump that percentage up 10 points.
“Economists at Goldman Sachs expect home prices to decline by around 5% to 10% from the peak hit in June,” claims Anna Bahnay at cnn.com.
As you can see from this short sample of opinions, nobody knows what will happen with home prices in the new year. If you have a fence-sitting buyer, you may want to ask them if they’re willing to gamble that prices and/or mortgage rates will fall dramatically?
What if right now really is the best time to buy a home?
Sellers, on the other hand, seem to be living in la-la land, according to the Zillow agent survey. “… sellers continue to expect bidding wars, offers above asking price, and quick sales, despite the cooling market.”
In fact, 81% of agents surveyed say their selling clients expect multiple offers on their homes, while 79% say their clients swear their homes will sell for more than market value, with an equal share saying their clients expect a quick sale.
Most troubling is that 74% refuse to lower the price of the home. Which, by the way, flies in the face of reality. Nearly 30% of sellers have had to cut their home’s list price.
One can’t blame them for their delusion, really. There are so many distractions in the news, competing for our attention, that real estate news most likely takes a back seat. As an agent, your job is to educate consumers, so blog it, Tweet it, and post it on Facebook.
In fact, here’s a little tidbit from the survey that you may want to share with unrealistic home sellers:
“Competitively priced listings are going under contract in 19 days nationwide, 10 days faster than before the pandemic, while other homes are lingering on the market a median of 54 days.”
Veteran agents will most likely sail right through this transition. New agents should concentrate on communicating with and educating clients.
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct response-driven articles written by real estate industry experts combined with engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you.
Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
2.The Free 12-Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do and when. Four key market segments include niche Markets, geographic farming, sphere of influence, and past clients. – Click Here
3. The BusinessBase, SOI building system
The most effective thing you can do to build a real estate business is to become more visible, more likable, and remembered more often. The BusinessBASE™ not only checks all of these boxes but is also a business-building machine. In two easy steps, you can begin to build a robust sphere of influence that will provide you a lifetime of repeat business and referrals. –Click Here
4. The Free Interactive Real Estate Business Plan
The Free Interactive Real Estate Business Plan allows you to enter your business goals for this year and get a breakdown of how many prospects, listings, closing, and so on are needed to reach your goals. – Click Here
5. The Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
6. The Take a Listing Today Podcast
Watch the ProspectsPLUS!, Take a Listing Today Podcast for actionable content to help you get more listings. – Click Here
Have you ever had something bad happen to you only to find out later on that the event was actually a blessing in disguise?
Jackie, for instance, was fired from her job. Sure, she panicked during the first few days of unemployment, but a month or so later, she was doing something else for a living. Something she dreamt about but never had the courage to pursue.
Had she not been fired from her previous job, she may have never gone after her dream.
The transitional real estate market is a lot like that. What appears to be a time of challenge or, at the least, discomfort may turn out to be an amazing time for real estate agents.
Coming back down to earth may mean “crashing” for some clients
Home price gains are shrinking, and sellers are starting to come back down to earth. However, coming back down to earth doesn’t happen overnight, as you seasoned listing agents know.
After years of media reports of rapidly escalating home prices, multiple offer situations, and uber-quick sales, those sellers who choose to wait until the tail end of the sellers’ market to jump in are hard to convert.
They’re not going to get that their home is no longer the belle of the local real estate market, that their hoped-for price is now a fantasy, and that it may take longer than 24 hours to get it under contract.
And, those sellers who put big bucks into the house to ready it for the market are going to be more than a bit upset
Especially when buyers start nit-picking them over price, terms, and more.
The Call To Action Series is shown above. To see more, click HERE.
Then, there are the buyers
If you’ve been a listing agent for more than a minute, you can recall the last buyers’ market. Newbies, on the other hand, are in for a rude awakening.
No longer can you chuckle over seemingly stupid requests in an offer because you have three others that are cleaner-than-clean. You will actually be expected to negotiate on your client’s behalf.
“Good grief, how do I do that?” you may ask yourself as a new listing agent.
Very carefully.
While price is the typical hot button in a contract, “the devil is in the details”.
Details are important
“Details” when it comes to a real estate purchase agreement are the terms. If this turns into a full-blown buyers’ market, contract terms are where listing agents can work their magic during negotiations.
And, if you have examples of how you’ve done this in the past, use them for all they are worth. From your clients’ testimonials to full-blown case studies, let potential listing clients know how you’ve met with success in the buyers’ market.
Now is the time for all good listing agents to figure out how they are going to deal with the oncoming buyers’ market. Don’t put off your planning. Face it and go for it.
We’ll be with you all the way, so keep checking back.
PLUS: When you have time…below are some marketing tools to help support your success.
1. Put Your Real Estate Business a Step Above with Your Own Branded Magazine
Homes & Life Magazine is a customizable magazine with rich, full-color content and a sharp, professional aesthetic. It includes compelling, direct response-driven articles written by real estate industry experts combined with engaging lifestyle content. Send out Homes & Life Magazine in Just Minutes – No Minimums Required. Or we’ll ship it to you.
Homes & Life Magazine is the ultimate “Coffee Table Lingerer”! …and it costs less than sending a greeting card! – Click Here
2.The Free 12-Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do and when. Four key market segments include niche Markets, geographic farming, sphere of influence, and past clients. – Click Here
3. The BusinessBase, SOI building system
The most effective thing you can do to build a real estate business is to become more visible, more likable, and remembered more often. The BusinessBASE™ not only checks all of these boxes but is also a business-building machine. In two easy steps, you can begin to build a robust sphere of influence that will provide you a lifetime of repeat business and referrals. –Click Here
4. The Free Interactive Real Estate Business Plan
The Free Interactive Real Estate Business Plan allows you to enter your business goals for this year and get a breakdown of how many prospects, listings, closing, and so on are needed to reach your goals. – Click Here
5. The Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
6. The Take a Listing Today Podcast
Watch the ProspectsPLUS!, Take a Listing Today Podcast for actionable content to help you get more listings. – Click Here
“Pivot.” I’m reading that word a lot lately. The “experts” are admonishing business owners to pivot, to adapt to the “new normal.” It’s an especially popular theme in real estate right now.
Seems to me that most real estate professionals adapted very quickly. You had to, right? It was either adapt or perish. In fact, the average agent could probably give lessons on pivoting.
The poor real estate consumer, however, has been left behind. So, just as you pick up slack for lenders when explaining the mortgage process to buyers, it’s now up to you to bring buyers and sellers up to speed on what’s changed and what they might expect from America’s “new” real estate industry.
Let’s start with your listing clients and listing prospects.
Post Pandemic Series
How has the selling process changed?
Aside from local market conditions, this is most likely every prospective home seller’s most burning question. After all, much of what they’ll learn online no longer applies.
Ensure that all of your listing leads are aware of and comfortable with the changes. Don’t let them delay their sale because they’re nervous or confused.
The listing presentation is the ideal time to walk them through the process. Make it sound as simple as possible.
Sure, they’re still curious how you’ll go about marketing their home, but how will they and their family be kept safe after showings? What precautions will buyers’ agents take?
Will you hold open houses? If so, how will those work without exposing both the buyers and the seller to the virus?
Stage it to sell for top dollar
While the process of preparing the home for the market remains pretty much the same, staging is not.
Hunkered down for months in their homes while they took on new hobbies and spent more time with family has caused a shift in what homebuyers are seeking in a home. Suggest to your sellers that they stage a spare room, study, finished attic or basement as a home office or gym.
Outdoor spaces are more critical aspects of home sales post-lockdown. Sales of inflatable pools, inground pools, patio furniture and décor and even trampolines have spiked.
One of the most popular backyard amenities is a large garden, or the space to create one. “Gardening supplies and egg-laying chickens are becoming hard to find as people search for both new hobbies and reliable alternatives to bare grocery shelves,” according to Hillary George-Parkin at Vox.com.
“Anything that keeps kids entertained — and offers parents a chance to take Zoom calls in peace — is, predictably, flying off the shelves,” George-Parkin adds.
Let your listing clients know this. Help them come up with ideas to stage their backyards for maximum appeal:
Kid-friendly space
Gardener’s dream space
Activity center
Create a kid-friendly space with a croquet set on the lawn, a swing set and slide, treehouse, trampoline hangout (see photo number 17 at HGTV.com), sandbox or any number of other things that will appeal to parents of young children.
Post Pandemic Series
There are many ways to stage a backyard to pique a gardener’s interest, including:
Building attractive raised beds
Adding trellises along the wall
Create a potting bench
Adding gardening beds in lieu of raised beds
Even if you have limited space in the backyard, or just a patio or deck, potted plants and planter boxes will create appeal for the green thumber.
Swimming pools also gained in popularity during the lockdown. It’s a worldwide phenomenon, with manufacturers in Spain claiming that sales have increased 400%. In New Zealand, searches for homes with swimming pools have increased 70% and manufacturers and retailers claim that sales have tripled since before the pandemic.
If your client’s home features a swimming pool, of course you’ll want to hit that fact hard when marketing, but encourage your client to stage the pool area to wow buyers even more.
For those leads and prospects who are dragging their feet (meaning there is no listing appointment), start an education campaign on your blog and share your posts on social media. Back them up with a direct mail piece that updates them on real estate news.
Sellers have questions and you have the answers. Walk them through all the processes and how they’ve changed, from home inspections to appraisals to closing and staging.
Post Pandemic Series
Send the Home Values postcard from the Post Pandemic Series to an area where you’re focusing on more listings.
Need help targeting a specific niche of buyers or sellers? Use our Demographic Search Tool to create the ideal list (it’s easy). Or call our support team for assistance at 866.405.3638!
PLUS: When you have time…here are some helpful resources we’ve made available to support your success.
1. The Free Real Estate Mailing List Guide
The Real Estate Mailing List Guide outlines the top tools for generating targeted prospecting lists including Baby Boomers, Empty Nesters, Investors, Lifestyle Interests, High-Income Renters, Move-Up Markets, and more. The Guide also defines done-for-you marketing campaigns to match these markets. –Click Here
2. The Free 12 Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Get More Listings, Geographic Farming, and Sphere of Influence. –Click Here
3. The Free One-Page Real Estate Business Plan
Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan. – Click Here
4. Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
5. The Market Dominator Branding System
Become branded in a specific neighborhood with a Mega AMrketing piece sent automatically each month to an exclusive carrier route. Watch this excerpt on the Market Dominator from a recent Q&A Todd Robertson (Director of the Market Dominator) did below.
For additional questions, you can reach Todd at 866-405-3638 or Todd.Robertson@prospectsplus.com or go to Market Dominator for more information.
6. The Free Online ROI Calculator
Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! –Click Here
7. The Free Real Estate Marketing Guide “CRUSH IT”
The “Crush It” Guide includes easy steps to launching an effective direct mail marketing campaign, how to create a targeted prospect list, the perfect way to layout marketing materials for success, seven opportunities available to target in your area right now. –Click Here
THERE ARE 2 GIFT CARD WINNERS IN FEBRUARY’S CONTEST. SEE WHO WON BELOW!
1. Congratulations MaryEllen Roy on winning the 1st Prize $250 ProspectsPLUS! Gift Card
MaryEllen shared the following experience with ProspectsPLUS!
“I’ve used several post card designs and love each one. I love the mailing labels and the notecards.
If you haven’t inquired about the Market Dominator, you should make this a resolution for 2019.
With ALL of the pieces I’ve ordered from ProspectsPLUS! the customer service has always been the BEST. No matter the question, they are ready and willing to help.“
Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!
Congratulations to the $250 Gift Card Winner of our November Agent Strategy Challenge!
Carol Nacarato!
Here’s what Carol shared as her November Challenge Marketing Strategy!
“I give ‘For Sale By Owners’ the Real Estate News to help them market there home and of course so they know to call me when they need help”.
What a smart and creative way to embrace your target community! Well done Carol!
To give you a little more insight into Carol’s other marketing habits we’ve shared a few marketing pieces (below) she has sent out from ProspectsPLUS! including Just Listed postcards, and Real Estate News.
Need help targeting the perfect niche of buyers or sellers? Use our mailing list toolto create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!
PLUS: When you have time…here are 3 free ways we can help you STILL CRUSH IT this year!
1. Become a Listing Legend Free eBook.
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
2. The Free 2019 Real Estate Business Plan.
Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan – Click Here
3. The 12 Month Done-For-You Strategic Marketing Plan.
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Listing Inventory, Geographic Farming, and Sphere of Influence –Click Here
4. The Free Online ROI Calculator.
Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! –Click Here
Our business flourishes from recommendations in the same way yours does. We would be very grateful for your recommendation of our products and services – Recommend us here
Want to Refer a friend or colleague? Refer them, Here. THEY get a Free $25 Gift Card and YOU become their hero. BTW, you also get a $25 Gift Card too (now that’s what I’m talking about)!
It’s all over the news – the government is harming homeowners and real estate by wanting to do away with the mortgage interest deduction (MID). From major real estate portals to the National Association of Realtors’ website, hand wringing rules the day.
Is it fake news, the truth or are the reports somewhere in between?
A little history
Before 1986, all interest on all loans (even credit card bills), regardless of purpose, was tax deductible. The Tax Reform Act of 1986 (TRA86) did away with all of those deductions, with the exception of mortgage interest.
Interestingly, the TRA86 was touted very much the same way today’s tax reform efforts are – as a way to simplify the tax code and do away with tax loopholes.
To itemize or not to itemize
To take advantage of the MID, a taxpayer must itemize deductions. For itemizing to make sense, his or her deductions must exceed the standard deduction. These deductions include the MID as well as charitable contributions, medical expenses, property taxes, state and local income taxes and others.
Now, if you itemize deductions you know that it isn’t as cut and dried as it seems. The charitable contribution deduction, for instance, carries a cap. And, filers can deduct only the amount of medical expenses that exceed 10 percent of their adjusted gross income (7.5 percent if the filer or spouse is 65 or older).
This restriction allows only 19 percent of taxpayers who itemize to claim the medical expense deduction, according to Matthew Frankel at motleyfool.com.
It is very difficult for the average middle class American to come up with enough in itemized deductions to beat the standard deduction. In fact, only about 30 percent of taxpayers itemize deductions.
The reality
Here are the stats:
About two-thirds of American households own their home.
Only one-fourth of homeowners claim the MID.
The average tax savings for households with income between $40,000 and $75,000 is just $152 a year. That’s $12.66 a month,” according to Anthony Randazzo, director of economic research at the Reason Foundation.
Households with earnings of more than $100,000 derive nearly 90 percent of the MID’s benefits.
“In 2015, the federal government spent $71 billion on the MID,” according to Derek Thompson with The Atlantic. He also calls the MID a “moral indictment of the tax code,” and the $71 billion dollars it costs this country “a public-housing policy for the rich.”
But … it incentivizes home ownership, right?
“Economists don’t agree on much, but they do agree on this: the interest deduction doesn’t do a thing for homeownership rates,” suggests Roger Lowenstein at the New York Times.
Remember Jonathan Gruber, the Obamacare architect? He co-authored a National Bureau of Economic Research study earlier this year that found “The mortgage deduction has a precisely estimated zero effect on homeownership.”
“One reason for this is the way the MID is structured. As mentioned earlier, a taxpayer must itemize deductions to take advantage of the MID. It is primarily the wealthy who have enough deductions that make sense to itemize.”
“The value of the deduction increases with the individual’s income tax rate so that higher income taxpayers receive more benefit than lower- and middle-income taxpayers,” according to Tim Manni at HSH.com.
Manni goes on to say that the MID encourages Americans who can afford to, to buy larger, more expensive homes, “rather than to encourage significant homeownership at low- and middle-income levels.”
Even without economists’ word for it, knowing the statistics on who actually uses the MID, common sense tells us that homeownership rates and home prices aren’t going to plummet if homeowners can’t deduct mortgage interest on their taxes.
What the MID actually does
“The MID benefits far fewer Americans than politicians and the media are letting on and, in fact, it drives up tax rates for the rest of us,” insists the National Review’s Robert VerBruggen.
Others argue that the MID subsidizes wealthy households and the money saved by doing away with it will help fund tax reform that benefits the middle class.
Whichever side you fall on over this issue, it’s important to understand the facts. Only then can you intelligently answer your clients’ questions.
Need our assistance? We would love to help you! Call our support team a 866.405.3638.
The Get More Listings Series is shown above. To learn more, Click Here.
