What to do if you are forced to buy a house?

NEW -> Contingent Buyer Assistance Program
<em>"Example, you can not easily get a prime loan with 0% down now as you could 5 months ago. You do have a lot of competition to purchase - It will be clearer to you soon. The market has changed and you will hear from the press 2-3 months from now."





</em>I believe most bloggers here are well qualified and not looking for 0% down loans.... And even if they were, them not being able to get a loan will only reduce number of buyers. So, what competition are you referring here? The market has certainly changed from bad to worse...
 
<p>StillConfused,</p>

<p>Competitions I am referring to are the relos, immigrations, and move-up buyers. These folks put a very large value to owning a home for their families and understood and/or accept the risk of home depreciation. I see them as savvy home buyers. I am not a renter, if I am, I would do everything in my power to get out of rentership.</p>

<p>I suggest you find a good real estate agent to help you with your personal real estate questions.</p>
 
"If you are able now, do it before the opportunity slips away. Example, you can not easily get a prime loan with 0% down now as you could 5 months ago. You do have a lot of competition to purchase - It will be clearer to you soon. The market has changed and you will hear from the press 2-3 months from now."





Not only will the opportunity not slip away, but the opportunities will only get better as prices fall further. Just because one is able to purchase a home does not mean than enslaving oneself to a huge mortgage is advantageous. Most in here could lease the best Mercedes on the market, but that doesn't mean it is a good idea, and fairly soon real estate will be depreciating at the same rate as a new Mercedes. There is no competition to purchase. There is an oversupply of homes for sale and buyers are wising up to the fact that they can delay a purchase and buy a home for less in a few years. The idea that the press is responsible for the real estate market change is nonsense. The press reports on the state of affairs, it does not make or influence the re market. Yes, the market has changed. It has gone from not so great to bad and is going to get alot worse, which is great for those of us who can wait to purchase. I don't want Nirvinerealtor to go away. I just got here and I think Nirvinerealtor exemplifies the mannner in which agents make their money. Thank goodness it is not as easy to get a 0% down loan. Maybe less folks will lose there homes and dreams because of fear and bad advice. A 0% down loan is for people who are desperate and fall for the fallacy that if they don't buy now, they will be forever priced out of the market.







Irvinesinglemom - Thank you, until I read your blog, which was the first I ever read here, I thought I was the only open house junkie, and I lived with that secret in shame. I have since come out, and know there are others like me, and there is nothing for me to be ashamed of. Thank you for your courage. :)
 
<em>"I think Nirvinerealtor exemplifies the mannner in which agents make their money."</em>





Exactly. This input is valuable -- even if it does provoke rants by me and others on how foolish buyers are for believing it.





Just so you know I wasn't picking on you, below is a copy of some posts from the thread <a set="yes" href="../../../discussion/223/3/will-portola-springs-become-a-ghost-town/#Item_1">Will Portola Springs Become a Ghost Town?</a>





<ol id="Comments">



<a name="Item_36"></a>



CommentAuthor<a set="yes" href="../../../account/155/">nirvinerealtor</a>

CommentTimeApr 26th 2007

>

<a href="../../../discussion/223/2/will-portola-springs-become-a-ghost-town/" onclick="ThankfulPeople('/extensions/ThankfulPeople/addthanks.php',3333); return false;">thanks</a>



<p>IIIrvine,</p>

<p>Speaking from my own experience, price is not a bigger factor. You are buying a home to live-in. I am explaining my point below.</p>

<p>Price is the function of interest rate. When rate is up, price is down, and vice-versa, somehow, buyer's monthly payment stay constant. So if the interest rates in the near futures increase (which I just start to see happening when all of the sudden, investors are shyed away from mortgage-backed bonds - we should know why). I am expecting to see a dip in home pricing temporarity assuming there are no new player added to the equation. </p>

<p>I thought rates would have dropped dramatically in last December, then we have the Subprime melt-down and scared the bond investors. If no more bad news, rates should reverse it course of increase. My 2 cent opinion.</p>

<p>We may have a new player. The Euro dollar: US dollar is .8:1. Meaning US real estate is at 20% discount. Remember what happen a few years ago when the Chinese currentcy was in the same situation? I am monitoring the European buyers to see if this becomes reality.</p>

<p>I think the monthly payment is the most important number to consider because that is the number that effects your wallet. When you focus on the monthly payment, it is much simpler to decide which home you should go for. Each home carries different cost structure (HOAs, Mello-roos, maintenance, ..). I found by focusing on the monthly payment, I was able to help people to feel comfortable to commit to home purchase mentally.</p>





<a name="Item_35"></a>









CommentAuthor<a set="yes" href="../../../account/6/">IrvineRenter</a>

CommentTimeApr 26th 2007

>

<a href="../../../post/3335/">edit</a>

<em>"I found by focusing on the monthly payment, I was able to help people to feel comfortable to commit to home purchase mentally."</em>





It is easier to commit financial suicide if it doesn't seem that costly. This is exactly why people bid up prices twice as high as they should be. When you can finance twice as much money with the same payment, people here in Southern California will do so even if the terms of the loan will kill them.





The "focus on the monthly payment" mentality is how car dealers rip people off with outrageous prices and loans filled with fees. It is part of the problem, not part of the solution.









CommentAuthor<a set="yes" href="../../../account/155/">nirvinerealtor</a>

CommentTimeApr 26th 2007

>

<a href="../../../discussion/223/2/will-portola-springs-become-a-ghost-town/" onclick="ThankfulPeople('/extensions/ThankfulPeople/addthanks.php',3336); return false;">thanks</a>



<p>IR,</p>

<p>It's OK that is how you feel. I see nothing ethically wrong with focusing on monthly payments, neither do my clients who bought homes from me. I am not trying to be argumentative. </p>

<p>Just imagine, if I made 1 wrong move. Do you think my clients will leave me alone? Who need extra stress? My buyer's market is +$1M, mainly not first-time buyer.</p>





</ol>
 
Stillconfused - I suggest that rather than find a real estate agent whose priority is to get you to buy the most expensive mortgage you can qualify for, and whose only interest is their commission, and will say anything to get you to close escrow, it would be much better to keep hanging out in here and asking questions and giving your point of view. The information in here is outstanding and the other posters do not stand to make a dime from you, so their interest is impartial. I am absolutely amazed at the knowledge folks have and their willingness to share their time and information. The trend is your friend , so grab some popcorn. We are ten minutes into the show.
 
awgee,





You are absolutely right about getting help on this forum!!!





It is only these forums that have kept me informed about the things I MUST know before buying a property here. More I read, more I am clear about my next steps in the process....





nirvinerealtor,





<em>"Competitions I am referring to are the relos, immigrations, and move-up buyers. These folks put a very large value to owning a home for their families and understood and/or accept the risk of home depreciation. I see them as savvy home buyers. I am not a renter, if I am, I would do everything in my power to get out of rentership."


</em>


1) relocations? (to CA?). I thought we are seeing many people moving out and not moving in. So they can only be sellers.


(My group interviewed 14 people last year (for 3 positions) and those who were offered the jobs did not move because of RE market)





2) immigrants? They don't sell their homes in their country and buy houses here upon their arrival?


(We are seeing more and more outsourcing being done requiring less immigrants, isn't it correct? We can not count on every strawberry picker buying $700K home and every janitor buying $500K home, although some did)





3) move-up buyers? How can they sell their current house in such market? Even if they move up, it keeps the supply of homes constant.
 
<p>stillConfused,</p>

<p>I am saying this to you out of my good heart. You should never, never, never take anyone advice when it comes to buying a house. You should listen to your heart to do the right thing because only you know your want, need, and ability.</p>

<p>Do you believe in destiny? I do, your future is already set. Did you know children bring you wealth? I do and I know that for fact. So I hope you can stop being confused unnecessarily.</p>

<p>That being said, I will tell you a sad story.</p>

<p>On October 2000, this young family of 5 bought a home on 14 Riverside, Irvine, CA from a builder for about $550K. This family carried a mortgage of $250K. This family took family stron advice to sell the property for a nice profit and became renter and wait for the market to crash....</p>

<p>So here is the sale history for 14 Riverside original buyer:</p>

<p>* $550K originally bought in 2000</p>

<p>* Sold for $1.1M on 1/8/2005 by the original owner and become renter.</p>

<p>* Resold for $1.265M on 4/15/2005 by the 2nd owner</p>

<p>* Re-Resold for $1.48M on 4/18/2007 by the 3rd owner</p>

<p>If you were the original owner of this home and took famility's strong advice to sell, how would you feel now? I hope to be the agent for this family. To keep the same previous payments, I am looking at $.9M - 1M home for them.</p>

<p>That is why I would not tell people if they should buy or sell for some strange future reasons.</p>

<p>To answer your questions base on what I see personally,</p>

<p>1) Most of The relo folks are happy to be back to OC. They accept the house prices in exchange for other amenities, that is why they are here.</p>

<p>2) Rich Immigrants love living here so they are bringing more families over.</p>

<p>3) The move-up buyers can afford both homes. Most of their starter homes can be rented out for possitive cash flow.</p>

<p>I truly afraid of the competition for the local folks.</p>

<p> </p>

<p> </p>

<p> </p>
 
NIR - Anyone can cherry pick homes that sold for more just as I can cherry pick homes that sold for the same or less. Like 2 Riverside which sold in 2004 $1.25 and sold in 2006 for $1.25. Or how about 15 Malibu which sold for $1.32 in 2005 and sold for $1.285 in 2006. Or 27 Maywood that sold for $1.25 in 2005 and sold for $1.175 in 2007. Please realize that you are not dealing with uninformed people without access to the same information that you have.
 
nirvinerealtor - I am confused once again. Didn't you just tell Stillconfused to not take anyone's advice regarding buying a home, but just a few posts ago, didn't you say that when the buyer is having buyers remorse, and they no longer want to buy the home, you step in to make sure the deal closes? If you truly believed that a buyer "should listen to your heart to do the right thing because only you know your want, need, and ability", wouldn't you instead support the buyer in backing out of an offer they feel uncomfortable with? Scare tactics, with some questionable anecdotal story, designed to make folks think that if they don't buy now, they will supposedly be priced out of buying a comparable home, are transparent and laughable. Home prices are coming down, have just started to come down, and have alot further to go, and people are getting wise to the ridiculousness that agents espouse in order to make commissions.
 
<p>graphrix,</p>

<p>I was not cherry picking; I do not have the intimate details about others. However, looking at the MLS history, 2 Riverside was a relocation, 15 Malibu was a change in familiy situation, 27 Maywood I think was a failed flip and it has a current market value of above $1.3M.</p>

<p>awgee,</p>

<p>Buyer remorse is expected; and I usually see a buying couple not having the same motivation to purchase. Buying a home is a big commitment so the natural tendency is to find an excuse to exit. After spending hours to qualify the buyers financially and emotionally, I have an important responsibility to the buyers to bring the buyers to the closing table. Afterall, the buyer contacted RE agent because he/she wanted a house in the first place. True? </p>

<p>If I feel the buyer is not ready to buy (example: the buyer feeling uncomfortable), I would not even want to take this buyer to the next step of submitting offers. I will be wasting everyone time, and that is not right thing to do.</p>

<p>I think it's laughable for anyone to say the future will be that. I could not bring myself to say something like "buy now before you will be priced out of the market". You may find me telling trends base on the available data or observation.</p>

<p>I only can support the buyer backing out if there is a good reason; Still, I can not make people to do what they do not want to do.</p>

<p>I know many people trying to purchase a home on their own ended up backing out many times because there was no agent to hold their hands.</p>

<p>This RE business is all about trust. No trust, no deal. I can tell you do not trust RE agents because you have not found one you can trust yet. Once you find one, you will be very happy and feel that you are well taken care of - guaranteed.</p>
 
<p>This has become one of my favorite housingblogs as of late. It is quite amusing to read the nonsense posted by the local permabull, Irvine Realtor. From what I've read in her posts, she is the worst kind of realtor and demonstrates all of of the cliches that have to led FBs making very bad, uninformed decisions about real estate in Southern California. I say that she should continue to post here....until she posts herself right out a job.</p>

<p>This is for you Irvine Realtor. My suggestion to you is begin working on a different career path. After this housing market declines significantly, and it will, realtors will have a reputation below that of used car salesman. Hope you saved some of those outrageous commissions for doing nothing, because you are going to need them to survive soon.</p>
 
What are FBs?



Nirvinerealtor - Actually I trust re agents to do exactly what they do, which is to close deals and get commissions. And I trust myself to discern who is looking out for my best interests and who is looking out for their own interests. I am grateful to you as you have put into distinct words that which I vaguely suspected and only had cloudy ideas about. Your willingnes to contradict yourself and avoid direct questions with direct answers truly helps me to understand what I am hearing anytime I encounter a re person. I am not being sarcastic. You have truly helped me to learn and you have furthered my education so that I will be more confident the next time I enter into a re transaction? You have helped me to realize to not trust anything an agent is saying, to verify everything I am told, and realize that everything the agent says is designed to make them money. I am grateful. Thank you, and I look forward to your posts.
 
<p>Jwm,</p>

<p>I am glad you like this post like I do. For me, it's a great marketing research tool to take the pulse of the current non-buying group. In exchange, I am giving back my sincere opinion, personal experience, and outlook of the market. You can take it anyway you want.</p>

<p>They say the glass can either be half full or half empty. Same here, I can be permabull or permabear. I only can be 1 but not both; unfortunately. If I am the permabear then I have no business to be in this business. I appreciate your suggestion and may take your suggestion when my service is obsolete. Do not worry about me, I had a great profession that I can get back anytime. And I chose to stay in real estate not for the money. Everyone has a real need for a stable roof.</p>

<p>awgee,</p>

<p>I am not exactly sure what you are saying; however, I think you definitely got the right idea to make the right decision for yourself.</p>
 
<p><em>"15 Malibu was a change in familiy situation."</em></p>

<p>You mean <a target="_blank" href="http://www.oc-fliptrack.com/1990/08/how-to-stay-cash-flow-positive-during.html">Sakae Escort</a> was a <a target="_blank" href="http://en.wikipedia.org/wiki/Pretty_Woman"><em>Pretty Woman </em></a>in real life? Awww! </p>
 
<p>NIR - No 27 Maywood has a current market value of $1.175mil not $1.3 otherwise it would have sold for that. Market value is not what sellers are asking in their wishing prices in which there are only a few of these dreamers. Most are priced below $1.2mil and they still are not selling. Also considering that hardly anything has sold in that neighborhood in 2007 it is too difficult to have a market price. Add to the fact that this neighborhood is where our favorite fraudsters decided to screw up the comps. And to add more salt to the wounds 29 Maywood sold for $900k in 2003 and in 2007 sold for $1.18mil after adjusting for inflation and fees this FBer lost about $50k. Reassuring the market value of 27 Maywood is not $1.3mil. You would think that a Realtor as professional as yourself would be more aware of the comps in the neighborhood. Again you fail to realize that people here have just as much knowledge, access to information or experience as you do if not more. Sometimes you are kind and give credit where credit is due and other times you come across as a bit arrogant. </p>

<p>awgee - If you search some of my conversations with NIR you will find that direct answers are not in her nature. And if she does somehow her dog eats them. To find out what FB is you should check out this <a href="http://anotherfuckedborrower.blogspot.com/">site</a></p>
 
OC Fliptrack -- When I saw NIR's comments I was going to ask you to post that link. You beat me to it..





Graphix -- Right on with your statement about the current market value - it was only worth what the buyer was willing to pay. We rented in the neighborhood and 27 Maywood was listed FOREVER before it finally sold. The one next door (29) was listed forever also and finally sold around the same time as 27 for $1.18M. Now, the one across the street (26 Maywood) was just listed for $1.375M by another flipper who was renting it out. Don't they realize that the house across the street which was the same model (and nicer) set the new comp and that prices are still falling so it will most likely sell for even less than 27 and 29 did (unless of course they are lucky enough to find a GF)! You should keep an eye on 26 Maywood to see how long they keep their wishing price before chasing the market down.
 
<p>Graphrix,</p>

<p>I found 2 recent comps for 27 Maywood (Builder Model Brentwood Plan 2, 3250 sq. ft)</p>

<p>1. 32 Modesto - Brentwood plan 1, 3221 sq. ft, sold on 3/20/07 for $1.295M</p>

<p>2. 14 Riverside - Brentwood plan 3, 3220 sq. ft, sold on 4/28/07 for $1.480</p>

<p>3. 18 Riverside - Brentwood plan 1, 2830 sq. ft. asking price $1.295M in pending sale.</p>

<p>27 Maywood looks more like a $1.3M ON PAPER to me. </p>

<p>I appologize for being arrogant. When you meet me in person, you will see I am nothing but "humble and easy going".</p>
 
<p>graphrix,</p>

<p>About my indirect answers, I want to stay politically correct such as not bashing or slendering anyone. Fair enough? Moreover, I do not want to answer anything directly if I do not have all the facts.</p>

<p>I understand people appreciate honesty and directness; my clients do definitetly get just that from me.</p>
 
<p>NIR - Let's talk about honesty since you brought it up. At first you brought up the fact that had this family at 14 Riverside had waited to sell they could have been able to be more greedy. So let's take a look at some of the other sales, pending and for sale hoping to make some profit. 32 Modesto was sold 5/10/05 for $1.236 and sold on 3/20/07 for $1.295 so after adjusting for inflation and fees they lost over $50k. 18 Riverside was sold on 11/28/05 for $1.15 and a refi on 6/29/06 and is now pending which you and I both know isn't always the final price for $1.295 when adjusted for inflation and fees they are looking at a loss of over $100k. 26 Maywood sold 12/29/04 for $1.236 and is for sale for $1.375 just factoring in fees they will lose about $20k to $50k add inflation they are losing over $100k. </p>

<p>So to be honest your nice family over at 14 Riverside selling when they did was smart. Just because some flippers after them got lucky and found a greater sucker doesn't mean they need to look back in regret. Honesty and directness would be pointing out the fools above. Later this year you can go back to them and say see now they can't even sell these homes for $1mil so you made a smart decision.</p>

<p>This is the internet so have some fun. We are not your clients and I don't think too many people here would become your clients. So instead of giving us the spin you give your clients you can come here and give us your real opinion. I don't understand why you don't have all the facts this is your business correct? Why would I have more then? I doubt you would ever slander anyone as you already know how to push buttons without bashing anyone. This is a good thing by the way, irritating sometimes but at least you are nice. If your clients get honesty and directness why do you not share that here with direct answers? Are you afraid we might find out who you are? Why? If I really wanted to I would know who you are already but the fun part is not knowing. And if I did find out who you are I would respect that and not reveal who you are just as you would do the same for me. </p>
 
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