To those of you who have been planning to buy your first home, and to those of you who long to sell your old one and move to a new one, I want you to consider fulfilling your dream today. 

Right now!

You may be assured that the sub-prime loan diabolical, the rising foreclosures, the worry about a possible recession, the rising prices of gasoline, and any other negative that is spewing from the mouths of news people, politicians and your friends in the neighborhood, at work and at church, are in reality nothing more than modest glitches to the housing values.

The overwhelming chances are that things are no different for you now than they were two years ago or will be two years from now.

What gives me such a pedigree to be able to confidently make these statements?  I've been in the real estate business as both a broker and investor for almost 44 years.  That's a longtime with thousands of experiences to draw from.  So come close and let's talk about this. 

As I see it, your questions - the questions you must ask and obtain satisfactory answers to are, quite frankly, no different now than they were for those looking to buy a home two years ago.

Here are the main ones you must ask yourself:

1.  Is the home I want in a neighborhood that is stable, and does the area have a history of stability?  Does it appear that stability will continue?  (The only word of caution:  Buying a home in a subdivision that is still occupied by the builder can be a bit more risky if there's a chance you will want to sell and move before the build-out is completed.)

2. How does its asking price compare with the prices of comparable homes that have sold in that neighborhood during the past six months?  Your Realtor can provide you with that information.  We call it a Comparative Market Analysis.  Study it carefully.  Drive by the homes that are used in the analysis and see if you agree they reasonably compare.

3.  Do I have sufficient resources to make the purchase with a straight-forward mortgage loan with straight-forward terms, terms that do not allow for modification?

4.  Can I establish a credible, definitive plan of action that I can and will take should some unexpected financial emergency impede my ability to comfortably make the mortgage payments and keep the homeowners insurance policy and taxes current?

After satisfactorily answering those questions for yourself, if history holds its course, it will not be in your best interest to wait until real estate returns to being the investors' darling. 

Here's why:

5.  Mortgage rates are lower now than they will tend to be when the economy resumes being tempted by inflation.

6.  When the real estate economic cycle rises again, in general, home values will rise contemporaneously. 

7.  And, finally, and most importantly I suppose is that you and your family will not have had the opportunity to live in that dream home if you wait for bad news to return to good news.  To do that is, in my view, utterly silly.

So here's what I want you to do. 

8.  I want you to find a Realtor you are comfortable having represent you. Sign him or her up to exclusively represent you, then confide in him.

9. I want you to go to your bank or credit union.  There you'll ask if they make mortgage loans.  If they do, apply.  If they don't, get a recommendation from them of a mortgage company and then apply there.  All mortgage companies are not the same.  While many of my colleagues don't agree with me, I think you should select your lender without your Realtor's help.

10. When you get a loan commitment, I want you to discuss the matter with your banker or your CPA.  If you don't have a CPA, now's the time to get one.  Let them critique the commitment.

11. I want you to steer clear of foreclosed homes, "REO", banks like to call them.  The chance of error is far greater than the opportunity to buy the home below the perceived market.  That means stay away from the exotic.  (Unless they call you The Donald, you aren't, no matter how many of his how-to books you've read.)

If all goes well, now you're ready to find the home that fit Points1 and 2. Let your Realtor negotiate its purchase for you.

If you have questions or comments, or want help finding a wonderful Realtor, no matter what state or city, I'll be glad to help.  Email me at cherrysells@aol.com or call me at 972 380-7347.  Those services are free to you for the asking.

Call me in five years and let me know how glad you are you bought now rather than waited.

Meanwhile, I'll have some more thoughts on this tomorrow. 

Copyright 2008 - William S. Cherry

All rights reserved