Kristen, Home Buyer in Farmingville, NY

my fiance and i have been saving for a down payment and were hoping to purchase while the market prices were

Asked by Kristen, Farmingville, NY Tue Apr 22, 2008

low. however, we are just not saving enough money as quick as we'd like in order to have a reasonable mortgage payment, so we are now considering a co-op in patchogue, since we feel it is better than renting and the area is improving rapidly. my concern is that we will be using our saved money for the downpayment. if we plan on staying in the co-op for at least 3 years, will we at least get our down payment back on the resale or is the market likely to continue to decline for another 3 years?

Help the community by answering this question:

Answers

20
Joan I can't believe that you are giving that same old tired Realtor line buy before July. LOL California is going to be in a downturn for a minimum 18 months more. I would never recommend you as a realtor based on this answer.
1 vote Thank Flag Link Wed Apr 23, 2008
Steve, it is just starting here, sales have stopped, look at Trulia.com for sales volume or SuffolkResearch.com both are showing volume -85% or more. Price adjustments will follow as new builders have to sell and create new comps.

Historically NY is a year behind the rest of the country, that year is now up.
1 vote Thank Flag Link Wed Apr 23, 2008
My suggestion is to stay away from co-ops. In order for your downpayment to really make a difference in your payment you would need at least 20% down. I recommend that you ask the seller to help pay your closing costs or a much of it as your lender will allow and save your money to fix up your new home with paint, carpet, furniture...
1 vote Thank Flag Link Wed Apr 23, 2008
I didn't think the Long Island market was so distressed. Some areas outside Washington D.C. are showing YOY appreciation yet go 15 miles out and they can't give homes away. Real Estate is local.
We are a while away from being "Normal"
1 vote Thank Flag Link Wed Apr 23, 2008
My, what a heated thread. I cannot imagine anyone buying for another few months, probably six. There is a staggering glut of houses in all areas of Long Island, yet few are lowering the prices. This is called living in denial. It has made for a remarkable stalemate where there are simply no sales, volume down between 85-95% depending upon what information service one views.

There have been 12,000 people laid off on Wall St. in the past seven days. This will soon be reflected in the LI housing market. My advice to anyone selling: do it now at whatever price. For anyone buying: wait until Sept.
1 vote Thank Flag Link Wed Apr 23, 2008
Kristen, the advice in this thread is criminal, and all by parties with a vested interest in keeping sales going. Truly horrible.

Comment 1:
"This is the best time to buy--low interest rates and lower home prices make the perfect storm for buyers. Make sure that you contact a mortgage rep to find out your options."
--- Really? Home price indices show prices falling in the NY metro area. Prime rate cuts have not been reflected in interest rates so rates are much more likely to go down than up."

Comment 2:
"We all wish we had the answers to that question.

1. It is a perfect time to purchase.
2. Even if you sold for the same price in 3 years...you would have lived rent free for 3 years.

How can you go wrong?"
-- This is the dumbest comment of the bunch. Gail is helpful when she can provide you with a link, her advice is nonsense. How can you go wrong? How can you go right is a better question. First, you'll be paying 3-5% in closing costs to buy and another 6% in realtor fees to sell. If you sell for the same price in 3 years, you're only out 11%!!!! BUY NOW!!!! And that's assuming the market doesn't fall any further, which all non-NAR economists seem to believe is likely. How can you possbly think you'll be able to overcome 11% of transaction costs in 3 years in this market?

Comment 3:
Definitely a great time to buy! We are seeing builders offer lucrative incentives which are giving resales a challenge. Resale homes that are in "tip top" shape are selling quickly and getting close to sales price. However, the deals can be found with homes that need a little TLC.

Overall....a great time to invest. Definitely meet with a few mortgage consultants and find the best plan for you. Then...find the right REALTOR to team up with. Good luck!"
--- The first paragraph seems to contradict itself. First new construction is giving resales a challenge, but those challenged resales are selling for asking. Real estate as an investment is historically a poor one.

Comment 4:
"I think it is a good time to buy as long as you plan on staying there for at least 3 years..."
--- Why? So you can overpay, then watch your value decline for a couple of years and hopefully bounce back so you only have to eat the commission and closing costs?


Kristen,
If you want solid advice on housing as an investment, see this thread: http://www.trulia.com/voices/General_Area/Open_Opinion_Threa… Its extremely long but most of the important stuff is covered early. Ignore anyone with the description "Real Estate Pro" other than Liz Hoffman, Realtyexec or Patrick something from LV. All the others add no value and just like in this thread, just keep repeating the company line: "Now is a great time to buy." The NAR couldn't have less credibility if they found the Iraqi Information Minister and made him their spokesman.
1 vote Thank Flag Link Wed Apr 23, 2008
You are doing the right thing in taking it slow and asking the correct questions. While nobody can predict the future housing market, your Realtor can give you an overview of the compparable listings and how things are trending in your area.

If you can and intend save significantly by renting for the next three years it should be considered, but often there are many first time buyer incentives that can make owning as financially feasible as renting. In buying you can be building equity, and when the market rebounds there is potential for more equity.

Right now you need two people to help you with your decision, your Realtor to be sure you buy smart, and your Lender to help direct you to the programs available for first time buyers. But most of all use your common sense don't over buy and use your head as well as your heart.
1 vote Thank Flag Link Tue Apr 22, 2008
FHA is the financing of the future? Are you kidding me? That's like saying that Social Security is the investment of the future.
1 vote Thank Flag Link Tue Apr 22, 2008
I wouldn't recommend a co-op unless you were planning on staying there for a long time as in downsizing, or remaing single, In your case, you would probably want something larger as soon as you start opening your wedding gifts.

You got some good advice in the other comments about going FHA. They do not have the stringent requirements that they had in the past. If you put 3% down, it would give you some money for remodeling. Get yourself a buyers broker, one that has the CBR or ABR designation after their name. They will work in your behalf to get you the best deal and they can give you advice. They help you buy a home, not just sell you a home.

Your buyer's broker might recommend estate sales. These homes have lots of paneling and wallpaper which you have to look past, but are in established neighborhoods. In most cases the sellers has plenty of equity and are more motivated because they are carrying an empty house. The taxes are usually lower too. Once you are in a great location, you have the option to sell or stay and expand in the future

Go to the local home improvement store to get an idea of what it would cost for remodeling. Many people are under the impression from TV shows that it cost much more to improve than it really does. Do you need an entire new kitchen, or can you just reface the cabinets and put on a new countertop? Your local appliance store puts on sale "the package". It includes a stove, refrigerator, dishwasher and microwave in stainless steel from $1400 to $2400.

You definitely want to take advantage of the historically low interest rates that are offered NOW. Once they go up, you'll have to look at cheaper homes.
0 votes Thank Flag Link Tue Apr 29, 2008
i appreciate everyones answers. to clarify my situation, we have 20% to put down on a co-op, just not 20% to put down on a reasonable house. We have already been pre approved for a 30-year fixed rate mortgage for 250k. we also have the option of using my fiances VA loan and have looked at FHA's, but here is the catch - the majority of affordable housing for the amount we are approved for are usually in need of repair, are foreclosed or bank owned. FHA and VA loans will inspect these homes and not approve the mortgage and therefore, they are not an option for us. That is why we are considering the Co-op. if we put 20% down on a co-op, pay a low mortgage and common charges per month and are able to save more money, when we resell in 3 years, i was hoping to AT LEAST make the down payment back. i just don't know under the current market conditions if the co-op would protect our down payment or if we would lose it in the resale. i was ultimately wondering if the co-op market behaves differently from the housing market. I can't seem to find recent sales of the co-ops we will be looking at, so i don't know what they have been priced at before.
0 votes Thank Flag Link Wed Apr 23, 2008
Well Kristen,
I have read many of the answers you have been given so that I don't give you any information you have already heard. First let me say if someone is telling a "buyer" such as yourself to wait until the market turns around, they are doing you an injustice. Prices are lower right now because of the competition from sellers. There is a glut of homes on the market for a number of different reasons and none of those reasons should matter to a buyer at all. You can have the "pick of the litter". You are the one in charge. If a buyer waits for the market to turn, it is only going to turn on them.
Now to answer your question about down payment. FHA has just increased their loan limits and they only require 3% down. I know that wont make a major difference in the monthly payment, but if you pay down your principle with the money you would be saving every month, you can bring that payment to your comfort zone. Ask your mortgage professional to lay out all of your options with FHA. FHA is a great loan, and it has some of the best interest rates right now.
Hope that helps.
0 votes Thank Flag Link Wed Apr 23, 2008
Hi there, I think the market is a bit different in many areas, however, I know in our area (Southern California) I would wait a few months to purchase a home. I think prices will continue to drop slightly still. If you plan on staying in a home longer than 3 years home prices will always come back up again. Real estate is cyclical. Interest rates are at an all time low right now, so I would buy something at least by July of this year.
0 votes Thank Flag Link Wed Apr 23, 2008
Kristin,

As self serving as this answer may appear, I suggest scheduling an appointment with me. I am an educator that has been full time in this business for the past 23 years. There is no charge for my services unless you use me as a Realtor. There is an open market with many different mortgages that would allow you to possibly invest whatever monies you have. I live in Bellort Village and work in Lake Ronkonkoma.
The other choice if this face to face concerns you is to email me and we can have a slower, but similar dialogue.
0 votes Thank Flag Link Wed Apr 23, 2008
I think it is a good time to buy as long as you plan on staying there for at least 3 years. I strongly urge you to get pre-approved by a reputable lender and let him/her give you some advise on differnt ways to finance the purchase. I think you need to realize that a home is an investment that can keep you warm and dry and a place to build wonderful memories as well as a placeto build equity, but not guaranteed. Enjoy the experience. I have never regretted any home that I have purchased. Best of luck.
0 votes Thank Flag Link Tue Apr 22, 2008
Kristen

Look into FHA loans. Downpayment of 3%. 100% Financing is possible.
FHA is going to be the financing of the future.

Good Luck!
Web Reference: http://www.soldbysteve.net
0 votes Thank Flag Link Tue Apr 22, 2008
Definitely a great time to buy! We are seeing builders offer lucrative incentives which are giving resales a challenge. Resale homes that are in "tip top" shape are selling quickly and getting close to sales price. However, the deals can be found with homes that need a little TLC.

Overall....a great time to invest. Definitely meet with a few mortgage consultants and find the best plan for you. Then...find the right REALTOR to team up with. Good luck!
Web Reference: http://www.LindaTrevor.com
0 votes Thank Flag Link Tue Apr 22, 2008
You and your fiance are on the right track.
0 votes Thank Flag Link Tue Apr 22, 2008
It is a great time to purchase and if this is your first home you may be in luck. Check all local lenders and ask about down payment assistance programs. Specifically inqire about the "Good neighbor Next Door","American dream",and "The Neihimiah gift program."agreat sorce for gift money and in most cases available to a very wide variety of buyers. Good Luck.
0 votes Thank Flag Link Tue Apr 22, 2008
We all wish we had the answers to that question.

1. It is a perfect time to purchase.
2. Even if you sold for the same price in 3 years...you would have lived rent free for 3 years.

How can you go wrong?
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Tue Apr 22, 2008
This is the best time to buy--low interest rates and lower home prices make the perfect storm for buyers. Make sure that you contact a mortgage rep to find out your options.
Web Reference: http://feliciafinn.com
0 votes Thank Flag Link Tue Apr 22, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer