John W. Schoen
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The federal tax credit for first-time home buyers has given the ailing housing market a shot in the arm. But with the program set to expire at the end of November, a lot of buyers and sellers are wondering: Will Congress extend it into next year?

My husband and I are looking to purchase a new house in the spring of next year. … We spoke to a realtor who is pushing us to put our house up now so that new home buyers could take advantage of the tax credit that is due to expire later this year. We were really hoping to wait as we were going to use our tax refund to offset the costs associated with the purchase. My question is have you heard anything about the tax credit being extended into the New Year?
— Heather, Lockport, N.Y.

At this writing, more than a dozen bills have been introduced in Congress to keep this tax credit going past the Nov. 30 deadline. Last week, Senate Majority Leader Harry Reid endorsed the idea of extending it for an additional six months. The White House is reviewing the program, but Treasury Secretary Timothy Geithner said last week he hasn't "made a judgment yet" on extending the credit.

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The program has succeeded in what its designers intended; home sales have perked up noticeably since the credit was enacted. But it remains to be seen whether the tax credit was enough to stop the downward spiral in the housing market. The ongoing rise in foreclosures doesn’t bode well.

There is also strong opposition to extending the credit from members of Congress who are worried about the cost. With the federal budget deficit exploding, these folks are rightly concerned about the impact of piling more borrowing on the national debt. Even if the program ends at the end of November, the cost could hit an estimated $15 billion, which is more than double what its supporters projected when it was passed in February as part of the economic stimulus package.

So it’s entirely possible we’ll see an extension, but no one knows. No one can know. One thing you can be sure of is that your pushy real estate agent is clearly much more interested in locking up a commission than in helping you make the decision that’s right for you.

The large cast of bad actors that got us into this housing mess clearly includes the army of real estate agents out there who insisted that “home prices never go down.” Many of these folks are honest, decent souls who perform a legitimate function. Others are less honorable. Unfortunately you can’t tell which one you’ve got until after the damage is done.

So take anything and everything you hear from a real estate agent with a healthy dose of skepticism. The industry has long known it has an image problem, which is why it came up with a fancy new word so they can call themselves Realtors®™©, etc. Whatever they’re called, these folks get paid to convince you to sell your house and convince someone else to buy it. Keep that foremost in your mind when they give you advice — especially about market conditions, forecasts and the timing of a sale. In thirty years, I have never heard a real estate agent say “This is a terrible time to buy a house.”

But no one can predict whether the credit will be extended. There are strong forces lined up on both sides. (You can bet those pushy real estate agents are lobbying hard for an extension.)

Taking the wait-and-see approach could backfire. To qualify, the buyer has to take title to the house before Nov. 30. The recent pickup in home buying has generated more traffic throughout the closing process, so you’ll need to find a buyer fairly soon if you want to beat the Nov. 30 deadline.