Attention Renters - It is Time to Buy!

By
Managing Real Estate Broker with eXp Realty RB-19250

House KeyDo you want to be a homeowner?  Are you worried about timing?  After reading this article, you will better understand why it is time to buy.  Let’s look at a few factors, the amateur experts and the news media failed to tell you.

·         Prices are down.  Are they at the bottom?  There is no possible way to predict the absolute bottom in any market, but they are down and in many areas are showing signs of leveling and even climbing.  As you read down, you will see that timing the bottom; may be one of the lower priorities when deciding to become a home owner.

·         Interest rates are historically low.  This is the most important point to consider.  If mortgage interest rates climb by only 1%, mortgage payments will increase by something closer to 21%.  That was such an important point, that I need to repeat it. If the interest rates climb by only 1%, mortgage payments will increase by something closer to 21%.   While you are waiting for prices to drop by a percent or two the payments may climb 20% or more.  Even if you believe that you are in a more challenged area that prices may drop by as much as 5% or 10%; if you wait you may lose.

·         Have you heard about the renter’s penalty tax already passed by Congress?  Am I scaring you? If you are renting, you should be scared.  Did you know you are already paying it?  They are not calling it the renter’s penalty tax, but that is exactly what it is.  Our politicians are calling it a tax credit for home owners.  While you are waiting, the government is reaching in your pocket and grabbing out a big stack of bills.  They are penalizing you for renting in a huge way. The interest part of your mortgage payments (which is the majority of the payment) on your primary home is tax deductable.  That means you will not have to pay taxes on that part of your paycheck each month.  To get a better picture of what that means to you, talk to a tax professional. (Not your amateur expert friend or hairdresser).

·         If you rent, you do not control of your future.  If your landlord sells your home you may be moving.  If the landlord chooses, the rent may go up.  If you own and take out a fixed rate mortgage, you know what your payments will be for many years.  If prices go up, your mortgage payment, unlike rent will stay exactly the same.

·         When prices go up your landlord gets to keep the equity.  All profits to be gained down the road go to your landlord and not to you, if prices climb.  So of course you ask; what if prices go down?  You lose nothing.  Ok, I know you doubt me with that statement.  Let me explain.  As long as you own the home, you will not take any losses or gains based on the value of the home.  You can only lose on the value, if you sell while prices are down. If prices drop you will continue to take advantages of homeownership with the only impact being possible lower property taxes.  If you sell then and only then, is when you win or lose on the equity.  Even then, if you are relocating; you will take advantage of the lower prices on the other side.  No loss.

I hope after reading this article you have a little more clarity about why it s the right time to buy. 

Here is my last tip for potential homeowners.  Get professional help. Do not try this on your own.

1)      Get a full time professional Realtor®.  Someone who is an expert in the areas you are interested in.  Not a part time agent who does this on the side.  Someone who will protect your interests.  In most cases you will get their services for free.  Sellers normally pick up their fees.  Your Realtor® will let you know when you are looking at exceptions to that rule.

2)      Get a top loan officer from a local, funding lender.  Someone with a good reputation in your area.  Someone that will be there to walk you through the process and be there to explain any documents you sign.  Your Realtor® is a good source for a referral.  They will know loan officers in your area and can share their experiences with you.

3)      Start now!  It is time to buy!

 

Good Luck and Happy House Hunting!

Posted by

 

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Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

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Show All Comments
Rainmaker
123,134
Bill MacBride
Ski-in/Ski-out, Luxury homes, Second Home Buyers - Mammoth Lakes, CA
Mammoth Lakes Resort Real Estate

Randy,

Really informative post.

And you're right, with low interest rates-declining list prices and creative seller contributions prospective buyers can get great home purchase packages. Timing is of the essence too because things will change and these opportunities/ incentives will not last.

Sep 24, 2011 06:17 AM #1
Rainmaker
3,720,974
Richard Weeks
Dallas, TX
REALTOR®, Broker

Randy,

Well said.  Anyone on the fence should take note and buy now.

Sep 24, 2011 06:21 AM #2
Rainmaker
663,261
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Bill - I know I will be hearing in the near future many who claim they missed it.

Richard - I hope they get it.

Sep 24, 2011 06:23 AM #3
Rainmaker
3,513,559
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Randy great advice & good information. This generally works on most markets, than there are other markets where the average entry into the Purchase is $800k or more it is keeping a lot of good want to be buyers out.

Sep 24, 2011 09:30 AM #4
Rainer
284,468
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Randy -- you have done all renters who read this a Great service. You have succinctly pointed out the abenefits of getting into a house now -- and the best way to do it.

Sep 24, 2011 03:09 PM #5
Ambassador
4,389,931
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Randy

There are some pretty compelling arguments for some renters to be buying, provided they qualify of course. A big issue, I suspect, is coming up with downpayments. I don;t know what you have available in your area, but there are many communities here that offer down payment assistance programs for first time buyers that can really make a difference.

Jeff

Sep 24, 2011 03:46 PM #6
Rainmaker
663,261
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Endre - There are many who will not qualify for a mortgage due to income or prices.  But there is a huge number of renters that could and should be buying that are just paralyzed because of misinformation or lack of information.

Steven - Thank you.

Jeff - We also have several areas that also qualify for USDA (0% down).

Sep 25, 2011 04:29 AM #7
Ambassador
896,590
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

Randy....there really is no better time to buy!  None.....Renters would be wise to get off the fence!

Sep 26, 2011 05:28 AM #8
Rainmaker
663,261
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Larry - I think the news media has been part of the problem.  They are in the business oif scaring people and don't tell the whole story in most cases.

Sep 26, 2011 05:38 AM #9
Rainer
45,636
Jill Kipnis
Move, Inc. - Westlake Village, CA

Randy, great article. I agree with Jeff that down payments may be the big issue for potential homebuyers. It's also important that a renter be aware of the additional costs they will need to budget for beyond the monthly mortgage such as homeowner's insurance, property tax, HOA fees, etc.

Sep 26, 2011 05:52 AM #10
Rainmaker
722,453
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Great article you have done a wonderful job of explaining the advantages of being a home owner. Thanks for sharing.

Sep 26, 2011 06:06 AM #11
Rainmaker
4,799,006
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

So true Randy.  Those waiting to time the market are now facing a shrinking inventory and soon enough rising rates and possibly higher prices.

Sep 26, 2011 06:18 AM #12
Ambassador
809,989
ASHEVILLE REALTY REFERRAL RESOURCE 828-776-0779
REAL ESTATE REFERRAL NETWORK - Asheville, NC
CONTACT janeAnne365@gmail.com

Hi Randy~

 

Here's a Big SUGGEST...and thank you for this post. I have tweeted it for further outreach...and hope that my "suggest" will help to encourage this post to be Featured.

Sep 26, 2011 06:38 AM #13
Rainer
51,467
Chris Druesedow
Five Star Realty - Kenai, AK

Thanks for the post! Very great information. So many more things to do with your own home!

Soldotna Real Estate

Sep 26, 2011 08:57 AM #14
Rainmaker
663,261
Randy L. Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Jill – Good points

Pat – Thank you

Gabe – I feel there are too many people telling buyers to wait, when it could be the worst advice someone could give them.

janeAnne – Thank you for the support.

Chris –Absolutely, I think asking someone if they would like to be a homeowner is a great place to start.  I heard Darryl Turner the motivational speaker use that line and I loved it.

Sep 26, 2011 09:51 AM #15
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Rainmaker
663,261

Randy L. Prothero

Hawaii REALTOR, (808) 384-5645
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