Q&A: Is Today A Great Time to Buy?

I keep watching the news and hearing how bad things are, then I see the ads that say it is a great time to buy. Which is it? Steve, Delaware

Steve has a great question, and one that I’ve also been grappling with a bit. Is today a great time to buy a home? Yes. Is it a great time to buy a home for everyone? No.

Toby, that doesn’t help me.

Okay, let’s see if I can do a better job. We have decent interest rates and there is a huge selection of seasoned (aka sitting) inventory on the market right now. If you are a buyer this is a great time to buy a home and be comfortable in your new home.

Well that sounds down-right rosy.

Well unfortunately, in this market there are two types of buyers that might be better served to just sit tight and wait the storm out.

• Poor Credit Buyers – For years Alan Greenspan warned about irrational exuberance in the United States’ economy. Well, it hit the housing market last fall and we are still recovering, and unfortunately those with poor or undocumented credit are going to have a hard time buying a home today.
• Those Currently Upside Down in Their Homes – Americans are spending more than they make as a nation. Where is that money coming from? Credit cards. And then for many they consolidate those credit cards to pay off bills with a refinance of their home. Is that a problem? Yes, but sometimes it is the “best alternative” in a bad situation. When I was single, I piled up a few bills and after we’d lived in the house for a year, we took out a line of credit against the house. Am I proud of that? No. However, we are saving money on it and we don’t plan to sell this house any time soon. So by the time we do plan to sell, we’ll have paid down (or hopefully off) that line of equity and will have the ability to sell our home for market value without a concern. However, the problem arises when someone refinanced their house last year, and now needs to sell. Your home “appraised” for $200,000 last year but in the current market we are going to have to list it for $180,000 to even get showings and expect it to sell for closer to $170,000. Should you sell today? Not if you can help it, which then means you shouldn’t try to buy a new home right now either. (Disclaimer: If you are facing foreclosure call me TODAY at 740-990-9748 because the rules are different.)

Does that help?

Sort of … but I’m still scared.

The oldest and strongest emotion in mankind is fear. – H.P. Lovecraft

Fear is a normal part of the equation. I had to take a drug test recently and I remember being extremely nervous when the nurse was wrapping up the cup and putting it in the jar. I just started laughing at myself. I have never taken an illegal drug in my life, just not my style. So why am I fretting about this drug test? Good question.

Let’s apply that to buying a home. You are signing a piece of paper promising that you’ll pay the bank a sizable check every month for the next 30 years in return for the right to own your own house. On top of that you’ll have to pay taxes, insurance, updates, and make all those changes your significant other spoke of when you looked at the house. Why shouldn’t you be scared?

We all fear change, and buying a new home is a BIG change. The best way to combat that fear is by working with people you trust – from your REALTOR® to your loan officer to the home inspector.

Meet with them all in person, don’t allow someone to “guide” you blindly through the maze. I have mortgage people – Bill Channell and David Zambo – that I work with on an extensive basis. Why? Because I trust them to be honest and up-front with my clients. Same with inspectors – Blaine Cochran and Title Companies – Title First – and what I expect them to provide you.

Realize that fear is part of the “game” and step up to the plate and talk to a REALTOR® about your options and ask them … Is it really a good time for ME to buy?

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