Las Vegas Sun

March 28, 2024

Realtors quietly lobbying to extend homebuyer tax credit

The $8,000 tax credit for first-time homebuyers is considered to have been a boon to the existing-home market that saw record sales in Las Vegas in June.

The tax credit, which was approved as part of the federal stimulus package, is set to expire Dec. 1.

But Jerry Giovaniello, lobbyist for the National Association of Realtors, told members of the Greater Las Vegas Association of Realtors that his group is trying to extend the popular credit into 2010, increase its amount to $15,000 and make it apply to every homebuyer — not just those who are buying for the first time.

“We need to review the $8,000 tax credit because it has made a difference (with sales),” Giovaniello says.

Giovaniello says there appears to be interest in Congress to extend the credit, but he doesn’t know if it will be increased or amended to include other buyers.

If it were to be increased and extended to other buyers, that would cost the U.S. Treasury, and there would likely be demands that the money come from within the real estate industry, Giovaniello says. That could include eliminating the mortgage industry deduction that Realtors insist remains intact. Taking away that deduction was an option to fund health care, but that was killed, he says.

“We are going to try and persuade them (to extend the tax credit),” Giovaniello says. “Some of the inventory has been absorbed by it, and the next step is to go for other people using the credit to bring the market back. President Obama and Congress have said the recession will end when housing sales get back on track.”

Giovaniello says members of Congress are aware of the tax credit and its effect because they have children who are looking to buy.

Because of the weakness of the economy and rising jobless rate, Giovaniello says Congress won’t stand on the sidelines, but will push for a second stimulus package.

“They are not going into the election ... next year with 10 percent unemployment,” Giovaniello says. “There will be some kind of stimulus bill or real estate stimulus because their constituents will demand it.”

Giovaniello says Realtors need to be careful about pushing too publicly for the extension because it could slow buying if people are waiting for the tax credit to be increased or broadened.

Only those who haven’t had an ownership interest in a home in the last three years are eligible for the credit.

Another focus of the national association is the Home Valuation Code of Conduct that was enacted in May, which selects home appraisers through an independent third-party process. A bill has been introduced calling for an 18-month moratorium.

The new appraiser selection process has come under fire by Realtors, who say it has resulted in less-qualified appraisers setting values. There have been problems resulting in additional appraisals and stopping or delaying sales, Realtors say.

“The reason for asking for the moratorium is for Fannie Mae and Freddie Mac (to set) guidelines,” Giovaniello says. “They are not clear to everyone.”

He says there have been complaints that appraisers are brought in from different parts of a state and there are no standards if they are basing values on foreclosed homes or other properties. Better direction is needed. Doing a second appraisal can add $300 to $500 to the cost, he says.

Preaching to the choir, Giovaniello praised Realtors for being the largest trade organization in the country and says it is their right to try and influence government policy. That is how this country’s political system works, he said, adding that just having the most money to donate to elections isn’t what determines who wins.

“Had it been about money we would have lost every issue to the banks,” Giovaniello says, referring to banks’ push to get into the real estate business. “They have a heck of a lot more money.”

The National Association of Realtors doesn’t target Democrats or Republicans, but backs what it considers the Realtor party, Giovaniello says. It’s not as simple as viewing someone’s political leanings to determine where they come down on Realtor issues, he says.

Realtors have been successful so far in keeping out energy labeling and energy audits for existing homes as part of the energy legislation working its way through Congress, he says.

That would have added to the cost of sales and prevented some because a water heater or furnace may need to be replaced at the last minute and raises the issue of who would pay for it, he says.

“It would have redlined and stigmatized older properties,” he says.

The association is closely monitoring health care legislation and how it would affect Realtors. The group wants any bill to make it easier for Realtors to pool insurance across state lines, he says.

Realtors also want a review of Fannie Mae and Freddie Mac to determine how they should be structured and what role they should play with loan guarantees, Giovaniello says. Some suggest the entities aren’t needed and that lending should be controlled by banks. Research is being compiled on whether there should be regional versions of Fannie Mae and Freddie Mac or use of some model such as a utility, he says.

Giovaniello says there is no legislative solution to help speed up short sales that Realtors have long complained have been a problem.

Brian Wargo covers real estate and law for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4011 or at [email protected].

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