Oc Buyer

If you have a true professional listing agent market your home, you have a better chance of netting more dollars even after you factor in the commission. A really good one will make sure that the home comes up on the various sites. - Thu Jul 24 2008, 11:37

We had prepared a second counter that we were about to submit, but the listing agent told us it wasn't necessary because they told her that they were going to take our other offer. Two days later we were then told that this other guy was threatening to sue so it was back to highest and best between us and the other party. It's really frustrating, but until the bank signs the agreement, there's nothing solid. - Wed Jul 23 2008, 16:25

Sylvia,

You are the epitome of what is wrong with the real estate profession. 3 months ago you reply in all caps that prices are about to stabilize... i.e you were saying back then that it was an excellent time to buy. So now you come back and say you were off base, but again now is an excellent time to buy. 20% off of insane bubble prices doesn't mean it's a great deal. Mid 2003 prices seemed high to me, but they were still somewhat affordable. After that, it just got ridiculous. 20% less doesn't bing us back to earth, it still has us in bubble pricing area. 35% less starts to get a little more palatable for some, but for many they are waiting until it goes down 40%-50% from peak. 36% worked for us, but it's not enough for many people, particularly those earning near the median income.

Buyers trust their agent, so it's your responsibility to be honest with them. Feeding them the old line you used in 2006 that now is an excellent time to buy is either unethical or proves your incompetence. You should really be honest with your buyers and let them know that most likely the house will depreciate further.

At least I qualified bargain with the term relative, which meant to say that there are a handful of properties available today for what the market will fall to in a few months, but who knows where it will ultimately land. There are some of us who were truly ready to own now, but if you don't have all the reasons in the world to buy now, then why would you? - Mon Jul 21 2008, 18:34

Nathan,

I don't see what WAMU is doing as evidence that the sky is falling. In fact, I interpret it to be the opposite. Troubled homeowners had extreme difficulty getting to the loss mitigation dept. Collections wouldn't help them, only tell them that their only choice was to pay. Getting them to loss mitigation quickly is a good thing. The banks are modifying some of the loans, lowering/fixing and or freezing rates that make it affordable. Some are reducing the principal as well. It's in the bank's interest and the real estate market's interest for this to happen. Sure, they are losing money with the modifications, but a whole lot less than if they had to foreclose. The more people that can be kept in their homes, the fewer foreclosures we'll have on the market.
In some cases the homeowner just can't keep the house and a short sale may be the best option for them and the bank. It gets the asset off the banks books a lot faster and costs a whole lot less than foreclosing and these sales are better for the neighborhood. - Sat Apr 26 2008, 08:49

The house we are in escrow on sold in Aug 2006 for $675K and we are buying it for $430K. This is 36% less than the last sale price. It is a bank owned. I couldn't justify waiting to see if we could find something for 40% + less in the next year. The house next door sold in Feb for $450K. It was a trust sale and is a better house than ours is currently and it sold quickly. At these kinds of prices, people are buying immediately. The overall prices in the area could very well continue to drop, but I believe that there are relative bargains if you truly are ready to own now. - Wed Apr 23 2008, 15:59

"Recall, going by OC medians, someone who purchased at the previous peak in 1990 had to wait TEN YEARS before they broke even again in 2000."

That may very well be true, but in 10 years you build a lot of equity and even though prices may not have appreciated, rents sure went up quite a bit between 1990 and 2000. I would expect that even if someone who bought in 1990 and then sold in 2000 would have come out ahead based on those two things. - Wed Apr 23 2008, 12:51

It's very true that the more desirable the area, the less of a price decrease the area will experience. All the agents out there will tell you with absolute confidence that NOW is the time to buy, if you don't buy NOW you may get left behind. Then you have the bears out there (many of whom know absolutely nothing about RE) who will scream that you are an absolute fool to buy now and will get slaughtered. The fact of the matter is, no one has a crystal ball and the problem with trying to time the bottom is that you won't know it's bottom until it's in the past. That being said, my husband and I are in escrow on a house in 92627 and I'll share with you why we chose to buy now.

While we think there is a distinct possibilty that there may be a better deal next year, we're ready to own now and prices are finally affordable in Costa Mesa. There are fewer forelcosures there and even though there are certainly more to come, particularly from the people that bought in 2006, there are floors. When houses are affordable, people buy them. I can't see the coming foreclosures staying on the market for long periods and there are plenty of people with the income to buy at today's prices. I could be totally wrong, but the reason we chose to buy now is because we are ready to buy and we doubt that we will get slaughtered and expect that in 10 years it will be the best decision we made. We don't intend to sell in the near future. If we had that intention, we would not be buying now. I expect that it will be several years before there is any appreciation at all and perhaps maybe even slightly lower values in those years. However, during the next few years we will be living in our own house, we will be enjoying having a yard finally (and a dog), having our kitchen the way we want it, along with the flooring and paint choices.

In the first year we will be building over $4K in equity and it will increase every year. The net difference between what we're paying in rent and what our PITI will be after we factor in the tax break is about $400/mo. Next year our rent will be higher if we continue to rent, but our mortgage will not change and each payment adds a bit to the equity. If the same house is valued $10K less a year from now, so what? We've got $4K in equity in the year we've been in the house and we won't be sellers next year, or the year after that, or the year after that. In 5 years we could rent it and be cash flow neutral on an asset that will eventually appreciate on leveraged money.

The bottom line is that if you are ready to own (are financially prepared, have some money saved for reserves after your downpayment and closing costs, the mortgage, taxes and insurance are comfortable for you, your job is stable) and plan to stay in the house for a minimum of 5 years, you are more than likely making a good decision to buy in Costa Mesa now. - Wed Apr 23 2008, 10:32

Don't have any suggestions, but wanted to say congratulations on finding a buyer. - Fri Jul 18 2008, 13:51

I think you're mixing up FHA vs what Freddie and Fannie will buy. - Thu Jul 17 2008, 14:03