Should I buy a house???

[gakline]

Re: Should I buy a house???

Good point, VJW, but i've been reading a lot about the stalled housing market and, what's more, the beginnings of an inventory glut. Those rising interest rates are working in tandem with ridiculous asking prices and more cautious buyers now sitting on the sidelines to see what happens. That will exert downward pressure on home prices, so i don't think someone who waits to build up their down payment will be priced out of the market.

It all depends on where Billybob is looking to buy. I don't think the prices will drop in the midwest. East coast and west coast it's tough to say.

[billybob]

Re: Should I buy a house???

Center City Philadelphia, PA. In an area of the city that is quickly becoming "nice"...

[VJW]

Re: Should I buy a house???

Good point, VJW, but i've been reading a lot about the stalled housing market and, what's more, the beginnings of an inventory glut. Those rising interest rates are working in tandem with ridiculous asking prices and more cautious buyers now sitting on the sidelines to see what happens. That will exert downward pressure on home prices, so i don't think someone who waits to build up their down payment will be priced out of the market.

Oh, you are exactly correct. Just today from Bloomberg:

UNSOLD HOMES REACH 18-YEAR HIGH

“U.S. previously owned home sales fell a larger-than-expected 2.7 percent last month and the number of unsold homes rose to the highest since April 1986, evidence that rising mortgage rates and skyrocketing prices are putting buying out of reach for some.”

However, normally, this would give rise to the expectation that interest rates would level off or even decline. But the Fed cannot lower interest rates, due to runaway inflation. The inflation rate so far this year is at 4.9% on an annualized basis.

Stagflation anyone ?

#

[cercis]

Re: Should I buy a house???

I wanted to let you know that I started a thread called "Buying a House information" (or something like that).

It's to list all the information we can think of for buying a house, including pitfalls. I also listed the general expenses you find in my area - and I invite everyone else to list their general expenses.

Only you can decide if this is a good decision. If you do your homework and get lots of opinions, I am confident you will make the right choice.

[billybob]

Re: Should I buy a house???

Thanks for all your advice, everyone. I think I've decided to wait, at least a year. It would be good for me to save at least some money, to get ahead of the game rather that trying to scrape by just because I can. If I'm a good little saver, I should be able to save about 10k/year...

[gakline]

Re: Should I buy a house???

Best of luck. Keep us informed

[Fern]

Re: Should I buy a house???

You'll probably feel better after clearing your plate of that credit card debt, too.

Then all surplus monies can go toward down payment.

Good luck with it.

[CJsoccerchic]

Re: Should I buy a house???

I read somehwere here that you have to think about realtor and bankers cost. When working with a realtor, it should be free to you. Yes, they get a commission, but not from YOU, they get it from the person selling the house, not the buyer. Now, I have heard of realtors out there that charge for their services. I would recommend staying away from them.
Now as far the as the baks concerned, depending on how good your credit rating is, you'll pay your interest on the 200K - 250K home.
If you are REALLY interested in buying a home, the VERY frist step you can do that is no cost to you, is to go around to the different banks and get a "preapproved home loan"
At the banks, they will ask your financial quentions and get in your face about debt and what not. From what you make and how long you have had your job, they'll estimate what you can afford and came up with a number (hopefully, 200,000$ in your case)
Hope this helps!

[cercis]

Re: Should I buy a house???

CJ, I'd be interested to see where you read about the buyer worrying about realtor costs. Did someone correct that?

[gakline]

Re: Should I buy a house???

I just saw this in the paper today. I'm not saying you should take their advice, but something to thing about. Here's the article:


Lack of sizzle keeps Philly housing market on simmer

PHILADELPHIA -- Yes, it may take a little longer to sell a house these days. And, yes, your house may not command today quite the dream price that your neighbor got for his last year. But that does not mean that the real estate market is slipping.

Quite the contrary, real estate industry observers say. Prices in the Philadelphia region should continue to rise in the coming year, said Lawrence Yun, senior economist at the National Association of Realtors.

"Philadelphia will outperform the nation in price appreciation in 2006," Yun said. Continued here...

[CJsoccerchic]

Re: Should I buy a house???

I read on the first page of this thread (sorry, I should have made that a bit more clearer) The end deal, that YOU as the BUYER of a home, should not be paying for your realtor, the seller of the home IS! Hope that helps!

[cercis]

Re: Should I buy a house???

I think I see it CJ. I don't think that's what she was trying to say, necessarily. I think what she was saying is that the realtor will get 6% of the price of the house as a commission (or 3% if it's split) and so they have an incentive to get you into a house, even if you can't really afford it.

I don't like the current commission scheme, it gives the buyer's realtor absolutely no incentive to help you with a price offer. It gives them incentive to have you offer the price the seller is asking. The realtors are the major thing driving the price of housing up. They get 3-6% of the selling price, so they list it as absolutely high as they can and then they work together to get the buyers to offer as high as possible.

[CJsoccerchic]

Re: Should I buy a house???

OK, I see what your saying.
But that's when you have a BAD realtor. A good realtor will work on YOUR behalf. Yes, they do get a commission, but how else would they get paid. They are right up there with the car salesman, except, in the end, when all is said and done. the BUYER choses to either buy the house or look for another home. If the buyer is unhappy with the realtor being pushy or not thinking of the buyers interest, then the buyer will look for another Realtor. This happens all the time. If you don't like the salesman, you go to a different salesperson.
It's wonderful to live in a free world where decisions are made by the consumers.
As far as the value or price of the home is determined, there are reports that the seller gets that lets him have an estimate value of the home that he is trying to sell. It's his decision to either sell it for the price that is the value of the home or to sell it for more because he thinks that it is worth more then then the "value" of the home. Take celebrity homes for instance, the prices that they are selling for are crazy and way not worth it, but hey, a real life celebrity once lived there and you could live in the former house of mr. celebrity.
Real Estate is tricky. My end point is that you find the person you want to work for you and hopefully they are honest and are looking out for your interest cause in the end, you'll refer them and repeat buisness is how realtors make their money.

[cercis]

Re: Should I buy a house???

CJ, there are a ton of different payment schemes other than commission. Which is why I said I wasn't happy with the current scheme.

Even if we stuck with a commission scheme, there could be a way to do it where it's based on the original list price or the buyer's realtor could be based on the amount they save you, etc.

Or it could be brackets - $100-150k the commission is $7,500, $75-99k would be $5,225, etc so the buyer's agent would not have a negative incentive to get you a lower price.

My experience with realtors is they will tell the seller whatever they want to hear until their listing agreement is about to expire and then they'll tell them "the market is soft, let's drop the listing price."

And it can be very difficult as a buyer to change realtors. You sign an agreement and you either stop searching for a house until that agreement is up or face a lawsuit for contract enforcement.

[CJsoccerchic]

Re: Should I buy a house???

I really don't know who you are working with and I'm sorry that you have had the worst luck with Realtors, but the information you give is wrong.
I'm a realtor and I'm nothing like what you describe.
As a buyer looking for a home, you sign NO contract with a Realtor. If you decide that you don't like your realtor, you go find another realtor. It's not that hard, look in the yellow pages under "Realtors" you'll find more then you can imagine. Pick one, ANY one and there you'll have a "new realtor".
Commission is set by the seller and the realtor. If the seller doens't want to give as much as the realtor wants, then the seller can look for another realtor that will have lower commission rates. The realtor doesn't choose you as a client, you choose the realtor.