Tax credit key to selling homes, marketing experts say

From the National Association of Home Builders -- Home builders may be underestimating the mileage they can derive from the recently enacted $8,000 tax credit for first-time home buyers and should be doing whatever they can to actively promote it with their prospective buyers, according to residential marketing experts participating in an NAHB teleconference on March 16.

“Home builders and their sales and marketing teams can use the credit to clear off excess inventory,” NAHB President and CEO Jerry Howard told the more than 900 association members who called in for the presentation, which included a question and answer session on specifics of the provisions governing the use of the credit.

Suggesting that it is “the best kept secret in the world” in quarters of the housing industry where it can do the most good, Dan Levitan, MIRM, CMP, of Levitan and Associates in Fort Lauderdale, Fla., noted that “except for large and regional builders, we are not doing what we should to promote this tax credit.”

Big builders have placed major banners heralding the tax credit on their Web sites, Levitan said, and Lennar and Centex have added flash productions that enable visitors to click through to information explaining the credit and the availability of attractive mortgage interest rates. “This shows us how important this tax credit is to us today in getting the buyer motivated and giving us an excuse to get in contact with that prospect and get them excited,” he said.

While the marketplace has remained slow since the credit became available as part of the massive stimulus package signed into law on Feb. 17, Levitan said that production builders are reporting that they have sold homes based on the availability of the credit in tandem with other programs they have been running to attract reluctant buyers.

“We are using it as a tool to stay in contact with our customers and differentiate ourselves from others who aren’t promoting the credit,” Levitan said.

Educating consumers about the credit is key, and NAHB has created a detailed list of frequently asked questions that association members can deploy to provide information to the home-buying public at www.federalhousingtaxcredit.com. Members of the association can bolster their businesses with a range of promotional materials posted at www.nahb.org/economicstimulus.

The Real Deal

Levitan said that home builders associations have been leading efforts to promote the credit. Among them, the Greater Birmingham Association of Home Builders, in partnership with the Birmingham Association of Realtors®, is highlighting the first-time buyer tax advantage in its “The Real Deal” campaign, a five-day event on April 16-20 that will push sales of new and resale homes listed by members of the associations.

The goal of the program, which can be franchised by other HBAs around the country, is geared to getting the local housing market moving again, and it is being publicized through a television, radio and print media blitz and sponsorships through leading area businesses.

“Get something like this going with your local home builders association,” Levitan advised teleconference participants. When “everyone is working together, we ought to be able to sell tens of thousands of houses this year using the tax credit.”

Educating Salespeople

Gaye Orr, MIRM, CMP, of Coldwell Banker Advantage New Homes in Raleigh, N.C., said that builders need to educate their salespeople on the tax credit if they want their promotions to yield success. “We in the industry should really be up to speed on this. Your salespeople on the front line need to be comfortable with it,” she said. In the meantime, consumers are walking into sales offices “with more questions than they have answers for.”

Although it may take a tax professional to determine for prospective buyers how best to take advantage of the credit, letting people know just a few options — such as how to speed up receipt of the money from the credit — “can get people off the fence,” she said.