First Time Home Buyers, it's getting crowded on the fence. Get off it
by Donny Mak
on Monday, October 31st, 2011 at 1:00am.
By: Alan Aptheker
Heed the words of one of our most notable U.S. Presidents, Franklin Delano Roosevelt: "The only thing we have to fear, is fear itself." There's the low prices, low interest rates, and you're a qualified 25-40 year old professional making $60K – $90K. You and your significant other are renting a townhome for $1200 a month, and you don't plan on moving soon.
The stars are aligned, and there's only one thing preventing you from buying a house: Fear. "It's a big investment." Well so is the $1200 month rent. The difference is that the return on your $1200 per month is $0.00.
It's a commitment. Yes, it is. But you can get a formerly $200K condo or $300K single family for about two-thirds of what you could buy this home three years ago. When you went to the bank to get your cashier's check to buy your BMW for $27,000, were you shaking in your boots? I'm sorry, but in a year, it will be worth about $22,000.
Who can tell what the future brings? Who cares. There are hundreds of people just like you who, when it comes time for you to sell your home will: a) buy it, b) lease to own it, 3) rent it from you, and you hire a property management company and get the checks every month for $1200 when your mortgage payment is only $1000 a month.
Cut to the chase. There has not been a better time in the last 50 years to buy a home. Alleviate the fear factors. Find someone you know well, or someone they know well, who has dealt with a real estate agent. They were happy at the end of the deal. Find that agent.
Understand the home buying process. No, really understand it. Study it, read books about it, look on forums, Step one is NOT surfing the web and going to every open house. Here's where the agent comes in. By now, he or she should be your good friend and advisor. If they're not, find a different one. If they're not patient, pleasant, with a sense of humor, run away.
Get pre-qualified. No, first time buyer, this does not mean that you must now go out and buy a home. It's amazing how many first time buyers believe this to be true. If you're one of them, you're not alone and don't get upset that you don't know everything. You don't know everything. The realtor doesn't know everything. The seller of that house you like doesn't know everything. You get the point.
If you think any question you ask your realtor is a dumb question, you have not reached the right comfort level with him/her. I just learned how to be an expert in lease options and lease purchase programs. One year ago, I was very uncomfortable with the subject. I asked about a thousand questions to hundreds of smart people. Not one of them thought any question I asked reflected stupidity on my part.
Now act. You'll never have an epiphany that this is the golden moment to go out a buy a home. Try this: go act like you're going to buy a home. Go through the motions of a home search and see how it feels to you. If it feels wrong, don't buy. If it feels right, then do it, but quickly. The fence is buckling under the pressure of fear-laden first time buyers. Get off it.