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Home Buyer Credits Live Past Friday

No, Congress did not extend the home buyer tax credit yet again.

In fact, there was very little, if any, debate about that on the Hill (too busy blasting Wall Street I gather).

But never fear, big government isn't leaving the housing market entirely, and now even big Realtors are getting in the incentive game as well.

First Fannie Mae announced this week that it would extend its 3.5 percent seller assistance on its REO properties (foreclosures) to June 30, 2010. It was originally supposed to expire May 1.

"We are happy with the results of the program, which has helped us to sell properties quickly, thereby stabilizing neighborhoods and property values," said Terry Edwards, Executive Vice President of Credit Portfolio Management.

This program gives buyers back 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of selected appliances. Obviously it's been helping Fannie unload its large load of foreclosures. No surprise that with the home buyer tax credit expiring and foreclosures rising, Fannie would choose to extend a program that's working like this. Of course, remember, Fannie Mae (along with sister Freddie Mac) is under government conservatorship and is being fueled by billions of taxpayer dollars, so this program is nothing short of another government housing bailout.

Now to the private sector.

Today Coldwell Banker came out with the following headline: Coldwell Banker Extends Benefits of Home Buyer Tax Credit with 'Buyer Bonus' Sales Event. Let's be clear from the start that this is a sales promotion and has nothing to do with extending the tax credit. What's so interesting though is that at first glance it reads like some kind bonus that the Realtors are giving to buyers. Not so much.

... on May 1, 2010, immediately following the expiration of this government initiative, 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, 2010. There is no deadline for a closing date.

So basically this is Coldwell Banker convincing its clients — home sellers — to knock 3 percent, up to $8000, off their selling price until July 31. Of course it says "participating Coldwell Banker home sellers," which means it's really just part of the price negotiation. As an incentive, Coldwell Banker does a big promotion on TV, Facebook, Twitter, etc., but I'm wondering: If this is only "participating" sellers, then the promotions would be somewhat misleading (although I'm sure they'll say "participating" in the ads). It may drive buyers to a Coldwell Banker seller, only to find that seller isn't interested in any kind of cash-back bonus. There are still, even today, plenty of stubborn sellers out there.

I'm also wondering, for those that do participate, how do those homes get tallied when it comes to final sale prices?

If the cash back is not part of the final sale price, then we don't see that reflected as a 3 percent drop in home values, right?

But that's really what it is.

Just fyi, Coldwell Banker is a huge agency with 97,000 agents and more than $200 billion in sales volume.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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