Profile picture for aapostrophe

I have a substantial down payment, good credit, and am ready to

think about buying.  Should I buy/pay RE commission now or wait for lower prices and pay commission on a lower base price? 

  • December 18 2008 - Orlando
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Answers (17)

Someone told me - I think they were an agent - that if you don't buy now you might be priced out forever.  Plus, they aren't making any more land.
  • December 18 2008
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Profile picture for aapostrophe
what?!  no more land?  i guess the land makers didn't qualify for the bailout.  i better buy now.
  • December 18 2008
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i bet the next big thing will be  tree houses.
  • December 18 2008
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or house boats.
  • December 18 2008
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Profile picture for klarek the realist
It's true.  They just stopped making land.  Also rates are their lowest EVER.  Even lower than the last 60 months that they were at their lowest EVER.  Also, prices have NEVER been this low.  Not ever.  You're missing an incredible opportunity if you don't buy now.  Because right after you decide to wait is when the market will shoot like a rocket in the sky.  We'll see 2006 prices, then they'll double in a year, and everybody that owns will be wealthy.  You'll be priced out.
  • December 18 2008
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Profile picture for aapostrophe
so, if the Big 3 car makers shut their doors, does this mean they aren't making any more Ford Fiesta's, and that prices for those babies are gonna skyrocket?  i smell the next asset bubble!
  • December 18 2008
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  • December 18 2008
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It is impossible to try to time the market perfectly.  What are your intentions for buying now?  Long-term investment?  Do you need a home for more than 3 years?  If so, maybe now is a good time.  It's true I think prices will still continue to fall into 2009, but interest rates ARE lower than most people alive today have ever seen (30 yr fixed around 4.75% for well qualified people).  That said, they may still fall lower.

Will it be a better time to buy in the next 6 months?  Potentially yes. Is it a good time to buy now? If you can get a good deal and won't be forced to sell in a couple years, I think yes.  Otherwise, it may be worthwhile to wait a little longer.
  • December 18 2008
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No one can predict exactly when the interest rates and housing prices will stop. The saying goes "buy low, sell high." Now is a great time to buy and if you end up waiting, you might miss it. Plus there is a lot of inventory to choose from and you can really get a great piece of property. 
In South Florida we are starting to see multiple offers and properties moving quickly at $250,000 and below. 
  • December 18 2008
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Profile picture for aapostrophe

yes, but RE agents, please look back and address whether you would now still say it was a good time to buy, say last September '07.  and if you are honest and say "well yeah, we were wrong" , then why is now any different?

also, no RE's addressed the commission portion of the question.

  • December 18 2008
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Profile picture for klarek the realist
To echo aapostrophe, all of you agents would have been saying the EXACT same things a year ago, giving the same sh!tty advice.  Either you're lying, or you don't have ANY clue what you're talking about. 

"If you end up waiting, you might miss it."  <<<---- this is an incredibly naive thing to say, Lilli.
  • December 18 2008
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Commissions are generally paid by the seller and are based on the sale price.  If you purchase a home at good price with a substantial downpayment, you have instant equity in the home.  If interest rates continue to fall, then you might be able to refinance at a lower interest rate.  The cost to do so would depend on your lender, or any other lender who might offer a low cost refi.
  • December 18 2008
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So if I buy a $100,000 home in Las Vegas all cash.  Does that mean that i have $90,000 in equity in 3 months?

I don't know if I like your math.  Instant Equity assumes a minimum that prices are flat.
  • December 18 2008
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The way I read the question, you lumped buying and paying commission together into one question.  Can you buy without paying commission?  If you go unrepresented you can try to negotiate it out of the seller's price, but I don't think that was relevant to your question of buying now.
To klarek the realist, it's the same thing if you speak to any professional in any field.  If you asked a financial planner in September of 2007 if it was a good time to invest, I'm sure you would have gotten more yes's than no's.  That may have seemed like fine advice at the time, but hindsight is 20/20.  How many people thought the real estate and mortgage crisis would spread so far and wide within the world economy to lead to collapses of major companies like the Big 3, Lehman Bros., and WaMu, among thousands of others.  No one has a magic crystal ball. As I said, prices still have room to fall and there is a good chance in 6 months general prices will be lower.  But you don't buy now at or above market price.  You buy a property below market so that there is still room for the general market to fall, or else you don't buy if you aren't comfortable with possibly losing equity on paper.

And I think your obvious disdain for my profession is quite offensive that you lump "all of you agents" together and say we are either lying or have no clue what we are talking about.

And while I don't like "Instant Equity" or other things like that, but it can be true if you buy a truly distressed property even if property prices are falling.  example: Prices are falling at 5% per quarter, but you buy a $150,000 distressed for $70,000.  I think it is safe to say you have instant equity.  That case is rare, but happens.
  • December 19 2008
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How many people thought the real estate and mortgage crisis would spread so far and wide within the world economy to lead to collapses of major companies like the Big 3, Lehman Bros., and WaMu, among thousands of others.  No one has a magic crystal ball.

I saw the tread once.  It was a little before my time.  Either Azrob, Aldreth or Spleng called the collapse of many of the Giants that toppled.  So to answer your post, "if you were on Zillow in 2007 you would have heard the prediction far in advance."

Prices are falling at 5% per quarter, but you buy a $150,000 distressed for $70,000.

Let's follow the logic.  If you buy a $150,000 house at $70,000 your comps are now at $70,000.  So no in this market I think you are still taking a leap to suggest its got built in equity.  The only way I see it with built in equity at this point is if this house or its equivalent is netting $700/mo in rental income. 

The thing is, if you are getting deals like this in the market, the odds are that there is an oversupply of similar homes on the market.   Well that price may be a good price today, the oversupply and the new comp that is set, will hasten the comp price to reach that $70,000 mark sooner rather then later.

I detest any sort of reference to "equity" in SFR's or condo's because the idea of  Home's value in reference to equity is only applicable at that moment in time.  In a market like this that is constantly changing.  The only way to attribute a more lasting value to a home would be to base it off of income.  At least with an income approach you have a quantifiable value to put to the property.  Something that will not change (as much) with the ups and downs of the market. 
  • December 19 2008
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So your concern is the commission right?  How about if I represent you show you the Homes you want to see and don't have to pay me?

Would you do business with me? 
  • December 19 2008
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Profile picture for AGCGartner
Sure the more you put down, the lower your morgage payment. But you do not want to put out more than you need to at the same time. As cash is king, you still need that nest egg in case of emergencies, a major repair or an unexpected investment.
Call-443-540-6069 and get your finacing worked out. Amanda
  • December 19 2008
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