We just got approved for a loan of $250,000 but my financee says wait until late summer, prices will still go

Asked by Yvonne, Riverside, CA Tue Dec 18, 2007

down. Right now a house at that price will not give us the square footage we need. We've thought about looking at foreclosures and repos but how do we go about it. Of course we want to get more bang for our buck but on the other hand we are bursting out of this house since the new baby came and we are pouring $1400.00 a month into someone elses pocket as renters. Go or wait...so confused.

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12
Cindy Vedder, Agent, Irvine, CA
Thu May 1, 2008
Yvonne - Congratulations on considering a new home purchase! There are many challenges with your pre-approved amount of $250K. I know because I deal with it every day. Homes in that price range are seeing multiple offers. Many buyers like you moving out of the rental market can do so today whereas just 6 mos ago-the market did not allow for it. That means of glut of buyers looking for the few homes that are priced in that range - in Riverside. If you consider Perris or Moreno Valley your chances are excellent. But if you are serious about Riverside you need to be completely prepared for a search that is going to take you through many offers before one is accepted. You must be ready to go - pre approved, not pre-qualified. So your lender should already have your loan application. You must have your funds and you must be flexible. It could take quite awhile to get an accepted offer. But believe me when I say - that it can be done. It just takes work. Many buyers don't know that up front and then get frustrated and lose hope. There is hope. As far as your fiance and waiting for the summer. This is the summer. By the time you locate a home, perform your inspections and close of escrow you are 30 days minimum out on that plus the time to locate the home. Interest rates are dropping now. So whatever few thousand dollars you may save by waiting can certainly be eaten up by possible future increases in the interest rates. Buy Now. You need to and there is no better time! Good Luck. Cindy Vedder
2 votes
Donald J. Le…, Other Pro, Tacoma, WA
Tue Dec 18, 2007
Yvonne,

I agree with Durenda. We are all asking the same question, no kidding. All of our clients want to know, our neighbors and extended families want to know...., but WE don't know. In my opinion the market cannot go down much further, the bleeding has to stop somewhere and at some time. One thing you have thought about I am sure is "...what if I wait too long and prices start to go back up again?" --- Yes, that can happen. Maybe not for a couple years many are saying and some expect better prices by spring and into summer, but not drastic.

After all, Home owners are people too, with feelings and thoughts about how to deal with all of this. They are hurt, scared and worried about the price they will get if and when they must sell. If they owe lets say $450,000 on a home and it "should" have appraised at $650,000....but due to market conditions they find that compareable properties are selling for a lot less, lets say about what they owe... then how in the world can they sell and walk away with nothing? Its tough on people who really cannot afford to take such a loss, but there are always those who just wait for the chance to jump on a great deal and will buy distressed properties.... its just business to them and most have the attitude "hey, if I don't jump on a good deal like this then someone else will." Which is true.

In the end, I too will buy distressed properties... and have bought 4 homes this year personally. From my standpoint it just doesn't seem as though prices will fall much further however and there will be those waiting for that great deal who will miss out (as is always the case) and later say.... "darn it, I should have found a way to buy when the market was down....". um hummm. Its like that.

All my best,
-Don
Web Reference:  http://www.realhomes.us
2 votes
Ie Realist, Both Buyer And Seller, Inland Empire 20 year local
Sun Jan 6, 2008
First, you don't need a crystal ball to see that the Inland Empire is and will continue to get hit hard in terms of declining value. Prices here have run up to ridiculous amounts here in the last 5 years that were not sustainable. Prices will continue to drop for this year. And as far as interest rates, i doubt we will see double digits any time soon so its better to wait and buy a home at a much lower price with a slightly higher rate if they go up. You can always refinance a rate but you cant go back in time and undo overpaying for a home. Good luck.
1 vote
Edward, , So/Cal
Tue Dec 18, 2007
Yvonne as a non Realtor I'd advise you to use your loan approval amount as a guide for shopping for homes you may not be able to get the size home you want for the loan approval you have. But as long as you do not buy a car or go wild on your credit cards you will be able to get a extension on you approval. Look Real estate agent make there living selling property. They have a everything will be alright outlook on housing just as long as you are buying one.
My question are what size home are your looking to buy and in what areas do you want to live. I see you are in Riverside (CA?) is that where you are looking to buy. There are a lot of homes for sale in that area If you able to commute there are even more south of you. Homes in the Temecula area are begging for buyers, but that is the problems. If you have a 30/60 day lock on that loan take you time. Start by comparing home on the net. I like this site a lot (Zillow) you can look for homes in a particular area focusing on the price range you qualify for. Then compare those homes you are interested in based on the cost per square foot. Next look at the percentage of decline of the home values in that neighborhood and how long homes been on the market in that area. Once you see homes you think you might like then go a look at them alone just drive by so you can see the area and how other homes are maintain Look at the street traffic and is there shopping nearby. Once you do all of this then you get your agent to start setting up visit to these homes. Because you see agent are trying to sell you what they have in there inventory not necessarily what you have in mind I learn this the hard way also. I suggest for your personal visit you go around four or five in the afternoon to see how the neighborhood is when the kids and people are home. You can get a true idea of what it is like most agent want to take you in the middle of the day and no one around. Then you move in and find out it's Disneyland at night. Even more important look in an areas thats offers your family a high quality of life, safety and security these will also shield you from future home devaluations as well. Plus you'd be surprise how a super neighborhood enhances your quality of life. Even if you have to sacrifice some of your desire for more square footage, a home in the right area will make you more money. This is also a hedge against decline in home prices there will always be buyers for property in the right zip code. So yes you can wait but if you really search I know you can find a property that will hold it's value even if price continue to decline. And in this market a buyer is king right now. With winter being traditionally slow time this may be the prefect time to buy a home, prices and activity tend to increase as it gets warmer.
1 vote
Don Tepper, Agent, Burke, VA
Tue Dec 18, 2007
I second Durenda's comments. A good agent (actually, any agent) will have access to foreclosures and repos [REOs]. Now is a good time to buy; interest rates are good, plus you have the approval now (which will expire at some point), and you have the need now. Yes, prices may decline some more. So what you want to do is buy right...buy under the market...get enough of a value that you won't agonize over a drop of 5%-10% in values.

There are other ways, too, to get more "bang for your buck." Look into rent-to-own. You find a place, rent it, with some of your rental going toward the purchase price. You lock in a purchase price, and you buy at some point in the future. And if the housing market totally collapses, you just continue renting; the rent-to-own strategy allows you to "walk away" at the end of the lease. Some real estate agents understand and are comfortable with lease-options/rent-to-owns. It puts you in the driver's seat.

Good luck.
1 vote
Dan Chase, Home Buyer, Texas City, TX
Fri Mar 12, 2010
It has been over 2 years. Did you wait to buy, Did you rent? I hope you did not get to badly hurt by the real estate market crashing. I know, it is confusing as the bubble is really unprecedented.
0 votes
Richard Alan…, , Riverside County, CA
Fri Mar 12, 2010
I remember when I bought my first home. It was a wonderful experience. I never knew that it would be the first of several purchases. My point: Jump in! You can always trade up..... down the line or purchase another home and rent this one out. The American dream stumbled, but it did not collapse. Grab a piece of it. A good agent will help you navigate to the promised land. Find one, work with them and begin building some equity for the little one. Congrats on the new arrival. Remember, make it fun!
0 votes
Jory Blake, , Riverside County, CA
Fri May 1, 2009
Hi Yvonne, I just viewed REO 4 homes and am showing 2 more that meet your criteria. In regards to market timing,Cindy is on the money. We wont know the bottom until it is behind us ( No pun intended) . If rates are to increase,any money saved on the purchase price could be lost.
I am very patient with confused buyers and always get what is best for you. I also believe home buying should be a fun experience.

Thank you for your question and let me know when you'd like to get going. I can meet with you both at my office in Riverside for a consultation anytime that works with your schedule.


Jory Blake, Your Riverside Realtor

951 742 3751
0 votes
Sofia, Home Seller, Riverside, CA
Wed Jun 25, 2008
What part of Riverside are you considering? I am planning to sell my house but not for the amount you were approved.
0 votes
Elaine Stewa…, Agent, Palm Desert, CA
Wed Jan 30, 2008
We really won’t know if it's hit the bottom until its already moving up. Now is the time to buy, the prices are great and the rates are low. I would advise to get the process started, get pre-approved by a lender and at least start looking. It may take you some time to find exactly what you are looking for.
Web Reference:  http://www.investdesert.com
0 votes
Patti Philli…, , Carlsbad, CA
Tue Dec 18, 2007
Ditto, ditto, ditto...... We don't know if or when interest rates might go up- and it doesn't take much of a change in interest rates for your payment to go up a lot! Think about the amount you are putting out every month, and the amount you are paying in taxes which will be write offs. If you add those amounts up it is a big chunk. Will the price of your property go down significantly below that amount?

I'd say it's a great time to "get in the game!"
0 votes
Durenda Fach…, , Coastal Tampa Bay area. Pinellas and Pasco Counties.
Tue Dec 18, 2007
Yvonne
No one has the crystal ball to know whether prices will be up, down, or static in the future.
There are many good values on the market.
Contact a good experienced knowledgeable agent in your area.
Give your agent your parameters to see if they can find a home that will work for you.
You may find a home fitting most of your parameters if not all, and within your budget.
Best of luck
0 votes
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