When should I start looking for a home to buy?

Asked by Rob, San Diego, CA Wed Jan 23, 2008

I am in a lease thru the end of August 2008 and will be moving out (owner re-occupying). I am considering buying a home rather than continuing to rent. A lot of the homes I am interested in are bank/lender owned. How far ahead should I start the process of shopping and finding a home?
I would imagine these sellers would be looking for a short escrow, but I am excited and want to start looking now. I would want a close date of mid-August to allow for some overlap/moving.

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LS, Home Buyer, Dallas, TX
Wed Jan 23, 2008
My lease is up at the end of February and I planned to look at the beginning of January initially- Thank goodness I started in November- EVEN NOW- I am still looking. I have made offers but haven't closed on anything yet. It also depends on what you're looking for- I would start no later than May(ish) considering more people purchase property during that time. (at least that's what I've heard) Good luck, do your homework, and most importantly- be patient.
0 votes
Sandra Carli…, Agent, Newport Beach, CA
Wed Jan 23, 2008
Nationwide statistics are certainly different than both of our local markets. You should be consulting with someone who can get specific information for where you are looking to purchase.

What are rents doing in the area? Are they moving up or down? What has been the trend of inventory over the last few years? Is it still increasing, decreasing? What about the average price per square foot? Am I buying in a desirable location with limited space for growth or new construction out in the boonies amongst a lot of vacant lots?

It is NEVER too soon to start educating yourself on the market. Most buyers start out 2-7 months ahead of when they purchase. It is also a good time to start conversations with a lender. How are your FICO scores, is there anything funny on your report you didn't know about.

This will also give you time to find a Realtor & Lender you trust. Also, if you find one that you like, hire him/her and you will have someone dedicated to getting you the best deal and who will go out of their way to make sure you don't miss that best buy.

I have no doubt that some areas have and will continue to get hit with huge price declines. I cannot speak expertly regarding San Diego but can refer you to someone I trust that can, just call or email me.

As far as most of the homes being lender or bank owned, don't sell yourself short by only focusing on these. There are plenty of motivated sellers with a lot more negotiating strength (equity) than the banks.
1 vote
Dan, , San Diego, CA
Sat Aug 2, 2008
Hi Rob,

The photography service Neighborhood Photo, Inc. may be able to help you with your search. Please see our website http://neighborhoodphotosandiego.googlepages.com/homepage.

Hope you find the right home!
0 votes
Ruben Sanchez, Agent, El Cajon, CA
Tue Jul 22, 2008
Mr. Rob today is the day to start looking for a Real Estate Deal, I am able to help you search for a home. Contact me FREE of charge to help you with your research.
Ruben Sanchez: Realtor/Mortgage Broker
Web Reference:  http://www.RuBenRealty.com
0 votes
Dot Chance, Agent, Burbank, CA
Fri Jan 25, 2008
Rob, it doesn't hurt to look...unless you are an emotional buyer! If you are looking at short sales, you need the patience of Job and it would be good to look now.

Otherwise, 60-90 days out may be best unless you can move early!
0 votes
Stella, , 94127
Wed Jan 23, 2008
2008 is all about market correction! Great time for great deals!
A market correction is sometimes defined as a drop of 10% to 20% (25% on intraday trading) over a short period of time. Because of depressed prices and valuation, market corrections can be a good opportunity for value-strategy investors. If one buys stocks when everyone else is selling, the prices fall and therefore the P/E ratio goes down. Also, one is able to purchase undervalued stocks with a highly probable upside potential.

In conclusion Rob lets keep it real, no one has a crystal ball predicting the real estate future. If you feel you are ready and your finances are in check you have to go for it!

Stella Toth - Realtor
0 votes
Tom Swell, , San Diego, CA
Wed Jan 23, 2008
A well thought out question gets good answers, Rob. You got some good answers.

I would start looking not at houses but at neighborhoods. Trulia, Redfin, Google maps and other sites can get you started on that. You have time to actually go there, talk to people and get a feel for the area. Redfin will give you links to info about schools & the community. You will also want to consider transportation, crime stats, income & education levels, all that stuff. You could even sit in on local planning group meetings and get a feel for the future of that area.

There are two blogs that cover San Diego at the moment. Mine covers some East County communities and Carol covers North Park, Hillcrest and some beach property. We try to make our blogs specific to our area and offer helpful info for buyers & sellers. Expect more Redfin neighborhood blogs over time.

Good luck!
0 votes
John, , Los Angeles, CA
Wed Jan 23, 2008
Merrill Lynch (who has an inherent bias because of how many mortgages they own) today said that they expect housing prices to fall nationwide by 30 percent in the next three years. In San Diego, you are already looking at 30 to 60 percent price declines in some areas.

1) My opinion is that Realtors are very biased (if nobody buys, they have to find another line of work)
2) Read IRRATIONAL EXUBERANCE by Robert Shiller. Great book...

Shiller dissects home prices in detail and shows how home prices rarely keep up with the rate of inflation...

I'm looking to buy too, but only at 100 times the cost of rent. I currently rent a great place for $1700. I should be able to buy it for $170,000 to $200,000, but because of the bubble, my place would cost me closer to $500K.

I'm not worried, though. Very soon, as sellers continue to languish, prices will plummet (especially in your area and mine), and we will have bargains.

What do you say, Realtors? Do you agree with me? Do you agree with Merrill Lynch?
0 votes
Michelle Gor…, Agent, East Grand Rapids, MI
Wed Jan 23, 2008

August is pretty far away, but you still could start looking. I always tell my clients it is good to be knowledgeable of the market when you really ready to buy. Meaning if you stumble an excellent deal, would you know it, us less you have seen many other homes. We agents know it when we see it, as we are on the front lines. I can not tell how many times I have told someone this is a great deal, this home will not last long, but the buyer wants to shop some more as they have not seen many homes (and rightfully so) but when all said and done that home was the best, but when they went back to it, it had sold. Knowledge is power! Also with VERY low interest rates, it may make sense in the long run financially to buy now…your savings on your interest rates may make up for your loss in rental payments. Also it does not hurt to do a credit report just to make sure there is nothing on there you forgot about, or something is on there that should not be there. You do not want to wait till the last minute to have to clean up something.

Good luck and happy house shopping!
0 votes
Ken Herrera…, Agent, Las Vegas, NV
Wed Jan 23, 2008

There is no better time than know as we just had a 3/4 point rate cut from the fed. Get your financing in order and take advantage of the fact that it is cheaper to borrow money today then it was a week ago. Your lease will end in August 08, starting to browse your market now will help you get a feel for that is available to you. If you want to wait until you get closer to the end of your lease, I would propbably start about 120 days out, when you consider financing and a standard 30 day escrow, you may only have 80 days to finds your home. Who know's you might find a deal that may make it worthwhile to finish your lease early.
Good Luck,

Ken Herrera
Century 21 Infinity
Web Reference:  http://www.C21Infinity.com
0 votes
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