Buyer's Paradise - Why Now is a Good Time to Buy a New Home

Wow, can we be hit with any more doom and gloom financial news? Over and over, we are bombarded by the media as to how bad things are in the economy, which leaves you thinking that now is actually a poor time to buy a new home. Gas had been hitting record highs week after week, inflation is still increasing at a faster rate than in recent years, people are losing their jobs, and the real estate market is being pounded by the many adjustable rate mortgages (ARM) that are now adjusting to higher payments, many of which people are unable to afford. Despite the current state of affairs, now is definitely a good time to buy a house.
According to some, the outlook to buy a new home may be grim - it's reported that existing home sales will decrease nearly 7% this year, and new home sales are expected to decrease 19% (1). And with a nod to the times, real estate developers in San Diego, California are offering a 'two for one' deal - on homes, that is (2). Real estate is going through an adjustment period, and for many potential buyers, now is a good time to buy a house if there are available funds to secure the financing. Mortgage interest rates are still low compared to historical data, and home prices are also similarly low compared to what some of them were 1-2 years ago. The point I'm trying to convey is that now is, in fact, a good time to buy a house for those buyers who weren't able to buy a new home when the real estate boom was happening. People looking to buy a new home and invest in properties (keeping them for a long-term period) would also benefit from the current state of the housing market.
Making the Most of Your Investment
Many financial speculators recommend that, while now is a good time to buy a house, you need to keep the property for three or more years; however, if your plan is to buy a new home and then sell it within that window of time, you'd be better off renting. Furthermore, with the current volatility of the market, it's hard to calculate the outcome of it all and when it will end (3). Many websites now provide a practical calculator tool to analyze and compare the cost of renting versus buying and which is better for your economic situation in the long run. To judge for yourself if now is a good time to buy a house, plug in your statistics to Real Estate Journal's online calculator.
Housing will continue to go through tough times and will probably remain slow or stagnant for the next 2-3 years. There are an incredible amount of homes for sale on the market far exceeding the amount of people who are looking to buy a new home or who can qualify for financing. To give you an example, as of today's writing on July 17, 2008, there are more than 106,000 homes listed for sale with local real estate agents in metro Atlanta. That number doesn't even include the ones being sold by the owners themselves, likely constituting a couple thousand more. First time home buyers with good credit and down payments of 3-5% of their purchase price can benefit by getting the right assistance from many sources that help decide if now is a good time to buy a house.
Finding Affordable Homes
However, the resistance to buy a new home is not happening everywhere. Seattle, Atlanta, and Dallas, for instance, are not feeling these strong depreciation downturns like other cities in California, Florida, and Arizona are (4). In these areas, it is not unusual to find homes that were selling for $449,000 last year and are still on the market today at $349,000 because they haven't sold. A friend of mine recently sold her house at 68% of the home's appraised value because it had taken one full year to sell. Since the home was completely paid off, she wanted to move it as soon as she could and no longer cared how much less she was going to get. She ended up selling it for $10,000 less than what she had paid eight years ago. Stories like this become persuasive evidence of why now is a good time to buy a house.
Finding affordable, quality homes and assisting home buyers with the financing are the types of things the company I am associated with and other similar companies can do for people who are ready to buy a new home. The more we are able to inform them as to what options they have available and what they can do, the easier it will be for the market to slowly but surely recover and keep things from getting worse for those in financial distress. Again, if you are looking at the long run when you decide to a buy a new home (five or more years), you will be able to benefit with the conditions the market is currently giving you, hopefully encouraging you to understand why now is a good time to buy a house.
What Are You Waiting for? Buy Now!
There are many websites out there that can point you in the right direction and help you decide, in your particular case, if you are ready to buy a new home and if it is beneficial for you. Some buyers are worried about timing the purchase of a home to the exact minute that prices drop to their lowest points. The opportunity to a buy a new home may be too late at that point, and timing anything as unpredictable as a good time to buy a house is, after all, impossible. Search around for the right home: research the neighborhood to get a feel for that location's housing market, continue to build up your funds, and talk to real estate agents and mortgage lenders or banks (5) that can help you decide if now is a good time to buy a house. Those in the know can give you first hand advice when you're ready to buy a new home at a price you feel comfortable with.
Sources
1. "Existing Homes Sales," National Association of Realtors.
2. "In Escondido: Buy one (house), get one free," The Los Angeles Times.
3. Cullen, Terry. "Is Now a Good Time To Buy a House?," The Wall Street Journal Online.
4. Ibid.
5. Updegrave, Walter. "Timing the Housing Market," Money.

Help With Buying A New Home - What To Expect and How To Prepare

One of the hardest and most stressful things a person will ever do is buy a new home, especially if it is your first home. There are so many things to consider and so much to do, it can be a huge task.
The good news is, you don't have to go at it alone. If you are using a real estate agent then the agent will help you from getting over whelmed. In fact all through the process of buying your home you are going to have people who will help you. Some will be behind the scenes and you may never actually meet them or hear from them, but their job is to make real estate transactions easier.
Even with all of this help though you will have a lot to consider and there is still a lot of stress. The number one stress factor is the investment. Your home is probably going to be the single largest investment you will ever make. Investing that kind of money is always stressful. Loan consultants can help take some of the stress away. Their job is to work with you and find a home loan that will suit your needs and keep you from going to far in debt. Paying a home loan off every month is not a great feeling, but struggling to pay off a mortgage payment because your lender let you take on more than you could afford is even worse.
The best advise I can give you is to do research. Find out what the real estate market is doing. Every city and every state have different market values on real estate so do your research in the area that you plan to buy your home in. Different sub-divisions and even different parts of a city will have an effect on the value of a home. If the price tag looks extremely high, don't bother with it. Find something that is priced reasonable and then make an offer. Don't be afraid to send in a low offer, even if you know it will not be accepted. This is part of buying real estate. Start low and work your way up to what you are willing to pay. By working the counter offers you can usually get a house at a much lower price then the listed price.
Do not be afraid to shop around, look at as many homes as you want and use as many real estate agents as you want. Once you find a house you are happy with then work out a contract. If you can't get it at a price your happy with, go on to another house, there is always more homes for sale.
When it comes time to finance your home, don't settle for any old loan. Make sure the lender is doing their best for you. Many loan officers at banks can only offer you so much, they only have a few loan programs to choose from. Mortgage brokers tend to stick with only a few lenders and they will push the ones that pay them the best. Make sure you know what loan your getting into. If your lender doesn't explain the loan to you fully, find someone else. You may think you have a good loan, get to the closing and discover your loan isn't what you wanted. This is the wrong time to figure out your lender has fooled you. Get all the information you can from your lender before you go to close the deal.

Buying a New Home - Tips for Your Walkthrough

The walk through is the last chance you and your agent have to look over the house before closing, and can occur anywhere from a few days to a few hours before closing. It is during this time that you will confirm that the repairs and changes agreed upon with the seller were made. It also ensures that nothing comes as a surprise once the house officially becomes yours.
The list of important items to check during your walk through is extensive, so a checklist and copy of your sales contract can help you stay on task. There are certain items that tend to slip a new home buyer's mind, including checking all the lights and light fixtures to make sure they are wired properly, running water and flushing toilets to ensure there are no leaks, and opening and closing garage doors to check that they work properly.
Pay close attention to areas you may not have fully seen before your walk through, such as previously covered floors and counter tops. Look carefully in attics and crawlspaces to make sure they are in top condition as these areas are often overlooked until a problem arises. And don't forget to make sure that no trash or debris is left behind that will become your responsibility after closing.
There are special considerations to be taken depending on whether you are buying a vacant home, an occupied home or a newly constructed home. With a vacant house, take your time inspecting the home as problems can arise when a house is uninhabited for any significant length of time. With an occupied home, use the walk through as an opportunity to talk to the seller about any quirks that the house might have.
Even though some buyers rely on the fact that new construction does not come with pre-existing problems, it is still important to stay focused and meticulously check all details. Also, take this opportunity to discuss maintenance and warrantee information with the builder. A good website to learn the important questions to ask your builder when you buy a new home is NewHomeGuide.com.
While it is not part of a buyer's obligation, it is very unwise to not conduct a walk through. It is easy to get carried away with the excitement of your new home, stay calm and focused to ensure that every aspect of the house has been covered. If you find any issues during your walk through, be sure to speak up and document the problems.
You'll be glad you took the time and effort for the entire duration of your stay in your new home.

My name is Robert Stark. I have been in the industry of real estate investing for over 17 years. My real estate investing endeavors have run the gamut from vans down by the river to mansions on the mountain side. In the last 5 years I have been able to focus on buying new homes, and through my experiences I have acquired a considerable amount of home buying knowledge that I would like to share with anyone who cares to listen.