Is now the time to buy a house?

This is a question I seem to get asked everywhere I go!  I’m not really the one to ask since I’m not a Real Estate Agent, Appraiser, or financial planner.  I’m simply someone who is fortunate enough to be in the Mortgage business and has the benefit of understanding the entire process since I am immersed in it all day long.

What I can however do is share my own thoughts on how I am approaching the task of purchasing a home myself.

To put this into context, I am one of the most fiscally conservative, and risk averse people to will meet.  This dates back to my days as a bond trader when I saw people in the late 80’s loosing money hand over fist in junk bonds. Despite my aversion to loosing money on anything, I am seeing a number of nice opportunities to buy homes in the Houston area.  I would imagine that there are similar opportunities in other markets across the country.

My first step in shopping for a home was quite simple, define what I want.

There are two types of homes I am looking for.  One is a home on the golf course with a pool, the other is a townhouse inside the loop so that I am close to work.  I have established my general price range, number of bedrooms, baths, square footage, location and any other amenities I might want. 

With the help of The Houston Association of Realtors “My Home Finder”I am able to be notified of homes that meet my criteria as well as any changes to those listings.  I would imagine that most of the larger MLS’s have this type of service available.  If not your Real Estate Agent should be able to keep you up to date on listings.

So I have defined what I want, and developed a mechanism for tracking it.  Next step is to find a Realtor to help me avoid the land mines as well as provide me with any supplemental data on the homes I find.  For the purpose of this blog, I tapped Trisha Tomlison Armstrong with Texas Home Group in Spring, Texas for a bit of additional information on six homes I am currently watching.

Now that I have the basic mechanism in place as well as a very well qualified Real Estate Agent,  there are two critical elements remaining. 

1) Find something I fall in love with,
2) Find a great deal!

Finding something I fall in love with is the hard part, finding a great deal isn’t however.

Of the six homes I am watching, three are in the suburbs on the golf course, three are single family/Townhomes in the inner city.  Of those six, two are bank owned (foreclosures).  As a side note, just because something is a bank owned property doesn’t automatically make it a great deal according to my criteria.  All but one of these six have been reduced in price at least once.  One listing in particular has had three price reductions since it was originally listed in June.

Price reductions on listings indicate three things to me:
1)  They don’t really know what the home is worth so listed it to high,
2)  Something in the market changed thereby forcing a price reduction,
3)  They seller is more anxious to sell the house than they might have been previously.

Buying a home should be for everyone a carefully planned out financial decision.  It’s a delicate combination of having a solid plan, a great Real Estate Agent, defining what you want, and exercising some patience in your search.  Last and certainly not least, the home you purchase needs to be something you fall in love with and find a good deal on, since for the majority of us, we have many years of mortgage payments we have to make.

 

October 14, 2008