My Wife and I are disgusted in paying $900/mnth Apt. rental and are ready to buy a house. Buy now or Wait??

Asked by Ryan Jansen, Peoria, IL Wed Jan 7, 2009

We have signed a lease that ends in mid June 2009 and we are in a position in our life where we are done renting and want a house that we can call our home!! Finiacially we are good, but I am tired of paying for something that will never be ours. -----So...this being said...Do we start looking for a house now and buy ASAPor wait 4 to 6 months...how much different will the market be...what are the pros and cons...

Also we are wanting to live on the northern side of Peoria because of work and would like to know location wise...what areas will be the smartest for resale...what areas to stay out of and so on....

Thanks

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26
Sherry Chris…, , Peoria, IL
Wed Jan 7, 2009
BEST ANSWER
Hi Ryan
Spring is on the way, and that always brings out buyers. I would advise you to start your search now. Money is cheap, houses are plenty. Plus, you have until June 30 to apply for the $7500 first-time homebuyer credit, if you quality. FHA has relaxed their rules as well. I don't want to sound like a commercial, but yes, now is one of the best times to buy, that you are going to experience.

I work in the North Peoria area a lot. There are quite a few homes listed. Take a look at my webpage. Anything active is listed there along with tours, photos and community information.

Hope this helps Ryan!
1 vote
Jeff, , Virginia Beach, VA
Wed Jan 7, 2009
Please understand that the $7,500 tax credit must be paid back.

The “first-time home buyer credit” is a temporary refundable, repayable tax credit equal to 10% of the purchase price of a home, up to $7,500 for singles and married couples filing jointly. (Singles who buy a house together get only $3,750 each, as do married couples filing their tax returns separately.)

But the way the credit works, it’s actually more like an interest-free loan. Two years after you claim this credit, you have to start paying it back. The payback comes over 15 years in 15 equal installments–meaning you owe an extra $500 on your tax return each year. Sell your house, and you have to pay the rest back that year from your profits. (No profits, no pay back. Also, if you die, your heirs are off the hook.)

The allowed credit starts being reduced once a single has $75,000 of modified adjusted gross income, or once a couple has $150,000 of income. The credit goes away entirely at $95,000 for singles and $170,000 for couples.

The justification behind a $7,500 interest-free loan is that it is supposed to ease the “pain” of having to come up with closing costs and a downpayment. But wait… Wasn’t the housing bubble caused in part by people being tempted into buying houses they couldn’t really afford because they didn’t need to first save up for closing costs or a downpayment? I find it ironic that governments choice of “buyer assistance” is even more easy lending.

I would skip the $7,500 tax credit, that's a NIAGTTB sales tactic.

Start looking, but take your time. On a national average basis, prices will drop by 20% minimum in 2009. Maybe not in your market though. There will be about 700,000 forclosures released in the next week or so. That should help ease prices down a little more.
3 votes
Jeff, , Virginia Beach, VA
Wed Jan 7, 2009
Ryan:

Look for a NAEBA Exclusive Buyer Agent. They look out for your interests more than a buyer/seller agent because there is no steering.

You need to do a lot more research on teal estate and the market in your area before you pick an agent so you can determine their knowlege level. Remember, most agents expouse the NAR mantra, NIAGTTB regardless of the situation as they are salepeople on a comission and have to make a living.

Keep reading Trulia and look at Zillow.com, another good resource. Also look at Realtytrac.com so you can get a feel for forclosures and possible short sales in your market.

With a couple of months of good research and falling prices and falling interest rates, you can get a great deal.
2 votes
Seller In 61…, Home Seller, 61615
Mon Dec 7, 2009
Ryan, have you bought a house or are you still looking? I have my house up for sale in the Churchill park area, great location and a great buy. 2800 sq ft of space, 5 BR, list price is $244,999, Dunlap school district. I relocated to Chicago so I am selling.
1 vote
Rick Frissell, Agent, Brandon, FL
Wed Jan 7, 2009
Jeff, you are correct with all of your information except one. Any CPA would suggest that you take the credit regardless of the payback.

Take a look at deductions from home ownership interest and taxes and the "interest free loan" would be basically paid by the government.

Worse case, to address your concerns, take the money, put it in a interest paying account such as money market or CD and hedge your $7500 savings. It is available to pay back at any time including as part of the estate for ones heirs.

It makes no sense to do anything else.

Rick Frissell
Diamond Dwellings
1 vote
Jim Starwalt, Agent, Grayslake, IL
Wed Jan 7, 2009
Start now! Look at the possibilities of a short sale purchase, repo home from bank. The short sale process takes in the area of 4 to 6 months sometimes anyway.

Good luck!
1 vote
Sherry Chris…, , Peoria, IL
Sat Feb 7, 2009
Ryan
Just curious if you started looking for homes yet? I am available if you haven't started yet. Either way, happy hunting!
0 votes
Sherry Chris…, , Peoria, IL
Thu Jan 8, 2009
Ryan
NAR mantra NIAGTTB What Jeff is saying is that the Realtors (members of National Association of Realtors) tell everyone that "Now Is A Good Time To Buy" just to make money. Please, if you haven't already, scroll down and read my post to Jeff. I don't know if he had a bad experience or not, but it sure sounds that way.

NAEBA means National Assocation of Excluive Buyers Agents - meaning they only work with Buyers, much the same as Tony's accreditation of ABR (Accredited Buyers Representative). But neither designation prevents them, to my knowledge, of working with sellers as well. They simply choose to work with buyers rather than sellers.

The only advice I would give you as to how to choose a Realtor is:
1) Make sure they are a member of the National Association of Realtors (NAR). This means they have a serious code of ethics that governs how business is handled. NAR also has processes in place (such as mediation and arbitration) to handle misconduct and complaints from clients (you) or other Realtors, and can dispense penalties if a respondant is found guilty.

2) Ask for references. Then call those references. Ask the reference if they would work with that particular Realtor again and why.

3) Meet with several Realtors and find if your personalities mesh. This is a tough decision without having the complications of not liking and trusting the person you are working with.

4) Once you find that Realtor, sign a contract with them. It not only protects the Realtor, but also protects you and gives you some recourse if things go south.

I hope this has helped clear the fog a bit, Ryan.

Sherry Christiansen
0 votes
, ,
Thu Jan 8, 2009
Ryan;

NAR is the National Association of Realtors http://www.realtor.org/buyers_and_sellers

Using a RREALTOR is not the same as using a real estate agent only REALTORS, who are members of the National Association of REALTORS®, follow a time-tested Code of Ethics, where other real estate licensees may not.

I would be happy to sit down and talk with you and your wife, no obligation, and discuss your options, tell you more about me and let you decide if we are a good match. Tony@TonyBrust.com send me your contact info and we can talk more.

Tony
Web Reference:  http://www.TonyBrust.com
0 votes
Ryan Jansen, Home Buyer, Peoria, IL
Thu Jan 8, 2009
Ok...I am a little overwhelmed with all the Titles that realtors can have and all different one there are...will someone please humour me and decode and define the difference iand ranks in these titles and the real estate market....

NAR mantra
NIAGTTB
NAEBA

thanks
0 votes
, ,
Wed Jan 7, 2009
Here is a great site for all of those who need info on the $7500 tax credit. It is detailed and answers many questions. Remember, it is 10 % of the purchase price or $7500 as a max.

It is basically a 0% interest loan and must be paid back in equal increments over 15 years.

It is paid back when you do your taxes.


http://www.federalhousingtaxcredit.com/glance.php
Web Reference:  http://www.TonyBrust.com
0 votes
Sherry Chris…, , Peoria, IL
Wed Jan 7, 2009
Note to Jeff: I'm interested in your actual position. I see you have a blog, but like the press, it has a negative slant to it. It sounds as if you had a bad deal either selling or buying and that is a shame. There are a lot of good Realtors around, unfortunately one bad apple spoils the whole lot.

Steering is against the law Jeff, and any good Realtor knows he/she can lose their license for it. I'm not saying it doesn't happen, but to say a Realtor who isn't a member of NAEBA is only looking out for his/her own interests - "most agents expouse the NAR mantra, NIAGTTB regardless of the situation as they are salepeople on a comission and have to make a living " - is an injustice to those of us who truly look out for our clients.

I built my business from scratch when I moved here based solely on my hard work and customer service. Yes, getting paid is important, but my reputation is not for sale. I will and have walked away from client/s that I can't serve effectively.

You make some very valid points, but please, don't let your bad experience make every Realtor out to be a bad guy.

Buying a house, especially your first one, is one of the most important decisions you will ever make. You should come away with a sense of pride and accomplishment, not remorse or dissatisfaction. Shame, shame on the Realtor who apparently treated you less than professional. I do hope your next experience will be much better
0 votes
Sherry Chris…, , Peoria, IL
Wed Jan 7, 2009
Ryan
I will be happy to help you. I am experienced with first-time home buyers. I too, moved here from somewhere else and understand what it is like to be in an unfamiliar place. I am at home right now, cell is on. They don't allow us to give our phone numbers here, so you will have to visit my website if you want to contact me. I have time, I'm experienced, and I can give you references if you need them.

Whomever you choose, I wish you much success!
0 votes
Melissa Stev…, Agent, Peoria, IL
Wed Jan 7, 2009
Hello again Ryan!
I'm sure all of the responses you received were overwhelming! I would be happy to talk with you more via email or phone if you're interested. As I mentioned before, I am a native of the Peoria area. I have worked with many first-time buyers in my almost 7 years in the business and have testimonials I'd be happy to provide to you (or you can of course visit my website to view these). I have furthered my education and obtained the ABR (Accredited Buyer Representative) designation as well as GRI (Graduate Realtor Institute) designation. I have also taken classes working toward my broker's license. I would classify myself as a "patient, people-person" who enjoys helping others and loves real estate. That may sound "cliche", but if you were to ask anyone who knows me, they would probably say that I'm addicted to it. I have positive working relationships with other professionals in the business to help in a real estate transaction such as home inspectors, radon inspectors, mold inspectors, lenders, attorneys, title companies, etc.
I wish you the best in your decision-making and home search!

Melissa
0 votes
, ,
Wed Jan 7, 2009
Ryan:

Wow did I get something started for you with the $7500 tax credit. I am an agent who is very familiar with the area. I live here in the Peoria area for Coldwell Banker.

On the subject of the tax credit, you have until July 1st to buy a home and still get the credit, so you have plenty of time. Take your time, talk with different agents and find the one you are most comfortable with. As a first time buyer, you might want to consider someone with an ABR certification, more information about that is available at the REBAC website or follow this link: http://rebac.net/why_use_an_abr.cfm

Please feel free to contact me with any questions you have. We can meet and discuss more.
Web Reference:  http://www.TonyBrust.com
0 votes
Ryan Jansen, Home Buyer, Peoria, IL
Wed Jan 7, 2009
Hi guys. Thanks for all the advice. It is really helpful, although a bit overwhelming. My situation is this: I am in the market to buy a home, but I must confess that I am very uneducated in real estate practices and procedures.

So, I need a realtor that I can trust and that is very knowledgable. I need a realtor that has proven his or herself time and time again and is in the Peoria area. Since I am not originally from here, I have no one to guide me in this process, and in this market.

If you guys (and girls) would indulge me and let me know what you can do for me, how you can guide me in this, one of the most important decisions of my life, and why you would be my best choice as a realtor, I would really appreciate it. If you can include specific examples, that would really help.

Thanks a lot.

P.S. I know that the easy answer to this is, "Just go check out my website", but I am really more comfortable with a personal email or post. Thanks again.
0 votes
Daniel, , Baton Rouge, LA
Wed Jan 7, 2009
ohhh yea, lets wait for interest rates to go back to 6.5 and 7 !
0 votes
Jeff, , Virginia Beach, VA
Wed Jan 7, 2009
Rick:

I don't think investing borrowed (leveraged) money is a good idea in general, but I understand your point.

I believe the 15 annual payments come at tax time as some people would have that deducted from a refund due. For me, that is when additional taxes are due every year. Not a good time to add $500 for 15 years.
0 votes
Sherry Chris…, , Peoria, IL
Wed Jan 7, 2009
Ryan
I will address you about the $7500 credit, rather than the realtors from other states, since you were the one to ask the question.

The tax credit IS to help stimulate the housing ecomony, there is no doubt about that. You must buy a house to qualify for it. You must also be within certain income brackets to qualify. However, you do not have to use the money to buy a house. You can invest it, you can bank it, you can blow it at the casino if you want. In your particular case, you might use it to get out of your lease if your landlord will not allow you out otherwise and you find a house before the lease is up.

As for 700,000 foreclosures coming on, we haven't seen that number yet, and more than likely, that number is nationwide. Real Estate is local. Here in Peoria, IL, we have our share of foreclosures, but our market overall has remained pretty stable. Yes, it is down some and I would be lying to you if I told you otherwise. But it's not like the market is in the coastal cities and places like Arizona where prices went through the roof.

It never hurts to start looking for a home. No one says you have to buy before your lease is up. As someone else said, "you are in the driver's seat" and a good Realtor will move at your pace, showing you what you want to see, and explaining the whole process - Pros and Cons - along the way.
0 votes
Melissa Stev…, Agent, Peoria, IL
Wed Jan 7, 2009
Hi Ryan!
Since other agents have beat me to the punch I won't repeat everything that has already been said, but their points are good. As for advice of when you should start looking that depends on several factors. One being whether you want to encounter double payments. Usually your first mortgage payment is not due until approximately 45 days after closing. For example, if you were to close on a house in April, your first mortgage payment would most likely not be due until June 1st. When writing an offer, a buyer specifies what closing date he/she prefer. Often buyers like to close within 30 days, but 45-60 days is not uncommon. On average I would say buyers look at houses for at least two weeks before making a decision. Hopefully this information, along with what everyone else has said will help you to determine when to begin looking.
There are several areas in the Northern part of Peoria and surrounding towns that may be convenient for you in getting to work, shopping, restaurants, etc.
I work with buyers and sellers in the tri-county area. I grew up in East Peoria, currently live in Peoria, and my office is in North Peoria. I'd be happy to help you in anyway I can.
Good luck!

Melissa Stevenson
Newcastle Realty
0 votes
Debby Thomps…, Agent, Wauwatosa, WI
Wed Jan 7, 2009
I would say if it's right for you then it is the time to buy. I liked that you said you were looking for a home. That is the right word to use. People have taken that word out and only think investment. It is a home. So if you find the right home and the numbers work for you and you feel you could walk up to that front door and know it is for you. Then the time is right. None of us have a crystal ball and can see what is going to happen. But the rates are down and so are the prices. And yes there are deals out there. I guess one would say if the home you found went down in price would that make a difference if it is the home you love and plan to live in it for some time. If it would matter then it is not the right home for you. But if you are paying rent you are getting nothing out of that either. Good luck I hope you find that home of your dreams.
0 votes
Voices Member, , Benton County, OR
Wed Jan 7, 2009
Ryan, You are in the Drivers seat. Pay attention to job loss, foreclosure rates, learn the market in the area you're interested in. Nothings going to change in the next month or two to stop declining prices so you have plenty of time to decide.

In this market as a buyer you have the power, if you decide to buy you have a large pool of homes to choose from and no lack of agents to interview for the job of representing your interests. You might even decide there will be even more later..

Good luck, Dunes
0 votes
Rick Frissell, Agent, Brandon, FL
Wed Jan 7, 2009
My colleagues have given you excellent advice and I agree with them on all counts I would only add that the $7500 tax credit is a significant incentive and it expires on July 1.

I would never advise someone to buy simply because of the tax credit, but considering all the other factors already mentioned by the others, waiting until the second half of the year could possibly not be as attractive for you.

Rick Frissell
Diamond Dwellings Realty
Tampa Bay, FL.
0 votes
, ,
Wed Jan 7, 2009
Ryan;

Rates today are at an all time low. As a first time home buyer you have an oppertunity for an upto $7500 governemt 0% interest tax loan. If you would like more info I would be happy to get it to you. Now is a great time to buy.

mailto:TaxRebate@TonyBrust.com or 309-208-7748
Web Reference:  http://www.TonyBrust.com
0 votes
Bill Eckler, Agent, Venice, FL
Wed Jan 7, 2009
Ryan,

This is a great time to be considering buying property. Interest rates are low, sellers are motivated, home prices have dropped, and the market is flooded with "foreclosure" opportunities.

As we see it, the biggest mistake you could make is to no begin your search. The buying process can take months. Our recommendation is to begin today by reviewing your personal budget and start the process of collecting information about financing ASAP. There are many programs and alternatives, terms that you will not be familiar with, and different lending companies to consider.

Good luck
0 votes
Bonnie Crafa, , Waterbury, CT
Wed Jan 7, 2009
I would strongly suggest looking for your home now so that you start to recognize value in comparing the different homes and their ammenities. There is a great inventory, the mortgage rates are at an all time low and by all accounts we should be seeing the prices start to bottom out. Even if they do drop a little more, if you plan to be in the home for more than a few years and you find the "perfect" home, my advice would be to purchase it instead of throwing away your hard earned money in rent. History has proven that home prices always rebound and increase in value over time. Good Luck! -Bonnie Crafa, Century 21 Access America Wolcott
Web Reference:  http://www.BonnieCrafa.com
0 votes
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