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This is the right time to make your move!
If you are a qualified homebuyer*, there has never been a better time to buy a home. Homes prices have stabilized and are selling at discounted prices, less than 50% of the former price. They’re selling lower than a builder could possibly build and sell homes profitably.
Interest rates are now at 50 year lows, with no point rates available on 30-year fixed loans for about 4.5%, which makes homes even more affordable. Government-backed loans have become the norm, with FHA becoming the easiest loan for many homebuyers to use.
With the mad frenzy of buying due to the tax credits reducing, there is now more of a balance to the real estate market. This results with your offer being considered more seriously, and there seems to be less counter-offers and multiple offers to deal with at this time. There still may be a tax credit for qualified buyers of California homes, programs for first time buyers, and new homebuyers (who are not necessarily first time buyers).
All these market factors come together to offer the home buyer unprecedented opportunities to find home of their dreams, at bargain prices. Every person with a regular income and good credit should explore this idea before the moment passes, and it becomes a memory.
* Who is a qualified buyer? Home financing is more complicated now than it’s ever been in my 25 years of working in the real estate industry. Buyers having the most success in financing have the following qualifications:
- Buyers who currently are not a homeowner and have no forclosure in the past 3 years.
- Buyers with steady 2 + year income history (on tax returns), and future income assured.
- Buyers with average or better credit ratings. (640+)
- Buyers with sufficient cash or ability to get a gift from relatives.
- The home will be owner occupied.
If the buyer has the above qualifications, lending should go relatively well. However, if the answer to any of the above is no, the borrower can assume financing will be more difficult or impossible.
Getting pre-approved with a lender, as your first step in home buying, is now more important that it has ever been before. Most lenders will qualify the buyer at little-to-no cost, so there’s no reason to not start the home search with them.
