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Local specialists work to fill void

Real estate: Tax breaks for home buyers expired, but SCV residents get a boost from another source

Posted: June 29, 2011 1:55 a.m.
Updated: June 29, 2011 1:55 a.m.

A “for sale” sign hangs outside a home in Santa Clarita. To help local home buyers, a group of specialists has created monetary incentives.

 

Home buyers haven’t had a monetary incentive or received a tax credit to buy a home since the federal and state government tax-credit programs expired last year.

But what the government took away, local industry specialists have stepped in to give back.

Local real estate agents, escrow officers and lenders have joined together to offer Santa Clarita homebuyers a monetary incentive for purchasing a home.

Called the Homebuyers Incentive Program, or HIP, buyers can now receive from $1,000 to $10,000 when purchasing a home between July 1 and Sept. 30. The dollar amount equals 1 percent of the sales price on a home.

And, there’s no catch. This time around, any home buyer can take advantage of the program, said Mike Meena of Agusta Financial in Newhall.

“The program is for all buyers— this credit is for first-time buyers, move-up buyers, investors and vacation-home buyers,” Meena said.

Jump-starting
With so many homebuyers sitting on the fence, despite historically low mortgage rates, the local real estate industry decided to create a novel approach to kick-start the market again.

“We, the people, created our own program,” said Dianne Keefe-Bonnell of Newhall Escrow. “The government can’t do it anymore— they’re out of money.”

Every time a house sells, it helps every business in the area, including the local hardware store, carpet company, painter, gardener and all of the places that those people shop, Meena said.

“A buyer having an incentive at closing cost is a strong incentive,” said Al Caprio of Dilbeck Real Estate RealLiving in Valencia. “A lot of homebuyers have good credit but not a lot of cash, so this program helps.”

People are very cautious because prices have gone down for the past five years, but Meena said the group thinks the market is now at or near the bottom, and there is nowhere to go but up from here, he said.

“We feel that with the low interest rates and low prices plus the HIP credit that we will motivate more people to get back into the market,” Meena said.

How it works
“The goal of the program is basically to generate a monetary incentive for buyers that may be on the fence in this difficult economy,” Keefe-Bonnell said.

Buyers fill out a simple online application, indicating they’re looking for a HIP home.

The program gives up to 1 percent back on selected properties in the Santa Clarita Valley. Any participating home, at any price, qualifies.

Participating real estate agents will list a property on the multiple listing service as a HIP home. Working with a participating escrow company, the buyer receives a credit applied to his or her closing cost through the escrow company.

“It would be a lender violation for the lender to give money directly to the buyer,” Keefe-Bonnell said. “But this credit directly offsets the money coming out of the home buyer’s pocket.”

The incentive to home buyers is paid from the commission real estate agents, lenders or escrow companies would ordinarily earn on the sale of a home.

Beta test
The more Realtors, escrow companies and lenders that participate, the greater success the program will be, with all parties benefiting, including the homebuyer.

Professionals in the real estate industry are encouraged to sign up to participate in the program, promote it and list their homes as eligible for the HIP program.

“This program is a good way to incentivize buyers to look at a seller’s property,” Caprio said.

The more homes listed as a HIP home in the MLS service increases the options for homebuyers, and hopefully re-ignites home sales again. If the program launches well, it’s possible the program will be extended after Sept. 30, Keefe-Bonnell said.

“I think it’s going to be very beneficial to SCV homebuyers,” she said.

Sales heated up during the tax incentives offered to homebuyers in 2010. If the local innovative program is a success, it could spread through other markets across the country.

“We are the first city in the USA to try this program; and when this works, I am sure other cities will try it, too,” Meena said.

All interested parties can find information on the program at www.scvhip.com. Homebuyers can find participating real estate agents and the application for a HIP home on the program’s website.

jadkins@the-signal.com

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