Buyer Bonus is answer

COEUR d'ALENE - Not content to wait to see what the market does in the wake of the expiration of the federal tax credit that expired on April 30, one real estate company is responding with a bonus program of its own.

In a survey of Coldwell Banker Real Estate professionals, nearly half indicated that they had worked with home buyers who would have missed out on the homebuyer tax credit in November of last year had it not been extended. In addition, while 34 percent cited the tax credit extension as the primary reason their customers were searching for a home, 28 percent said that they feel the limitations of the credit will prohibit some buyers from taking advantage of the credit.

So on May 1, home sellers participating in the Coldwell Banker Buyer Bonus Sales Event will offer a credit of 3 percent, up to $8,000, when part of an accepted offer, of their home's purchase price to buyers who sign a contract before July 31. There is no deadline for a closing date.

"It brings buyers to the table who otherwise wouldn't be there," said Gary Schneidmiller, owner/broker of Coldwell Banker Schneidmiller Realty in Coeur d'Alene. Jim Gillespie, president and chief executive officer for Coldwell Banker Real Estate, was a prime supporter of the program, Schneidmiller said.

"The federal government did its part to encourage millions of Americans to achieve their dream of home ownership with the help of the homebuyer tax credit," Gillespie said in a statement. "As the credit expires, Coldwell Banker Real Estate is encouraging buyers who haven't found a home yet to continue looking, while bringing a new audience of home buyers who were unable to qualify for the tax credit into the market. We are confident that this private sector solution will represent a significant step toward continued recovery of the housing market."

Mark Johnson, general manager of the Coeur d'Alene company, said marketing experts in the automotive field reported sales declined by 90 percent at the end of last year's "Cash for Clunkers" federal tax credit for those trading in gas guzzlers for more economical new cars.

Participating homes will typically be identified by Buyer Bonus Sales Event yard sign riders and tagged as a Buyer Bonus home. While searching for a home online, home buyers can check the box labeled "Buyer Bonus Sales Event" to find participating properties nearby.

The bonus money offered is less restrictive than the federal stimulus funds, Schneidmiller said.

It can be used for a variety of purposes as approved by lenders, Johnson added, such as closing costs, improvements, buying down the interest rate and even the down payment. The bonus money will be applied at closing, so buyers will reap the advantages immediately instead of waiting until tax filing time.

Last week letters went out to sellers of homes in the $150,000 to $300,000 price range, and response was immediate.

"This will be a huge advantage," Schneidmiller said. "It was clear to the real estate industry the national program brought a lot of buyers to the table."