Is now the time for first-time homebuyers, or any one actually, to get off the fence and make a move?

If you are planning on staying in the home for a very long time and don’t care if it still drops in value for the next few years, I would say yes. The only reason I say this is because some of the first-time buyer programs that have been available for part of this year are getting ready to run out, specifically the $8000.00 federal tax credit available to first-time homebuyers that ends Nov. 30, 2009. While the National Association of Realtors and many of my colleagues are fighting hard to extend, and maybe even expand it, it may not be here when you finally decide the market has bottomed and you’re ready to jump in. The state of California (the state gov. program)stopped taking applications as of July 3, 2009 for the “new home credit” they were giving. All $100,000,000.00 they had allocated was gone. Also coming into this time of year, many local programs that are working with limited funds are running out of money. There again, many of them don’t know if they will be around next year.

Despite all the hoop-lah in the market, I don’t believe we’re any where near a recovery, as I have stated before. Many besides me say there is a whole new wave of foreclosures on the way, continuing our housing crisis. This, along with the fact the commercial real estate is crashing all around us which of course means even less jobs, more drops in the value of homes are inevitable. One thing I will say is first-time homebuyers are probably getting treated better than ever before as Realtors are hungry for sales. This year the Housing Affordability Index reached it’s highest point in 40 years. Since first-time buyers accounted for over half the sales for the first half of the year, according to the National Association of Realtors, Realtors affections have shifted.

For the not-so-savvy buyer, this can be a double edge sword.  Many agents because they are so hungry, end up pushing buyers to buy from their brokerage’s listings as opposed to the complete local inventory. If a buyer is not represented by their own agent (which you should if you want someone to look out for your interests more than the seller’s), they report sellers’ agents are calling them several times a day. Once a deal gets to the contract stage, many
cash-strapped brokers have been adding vague fees and other surcharges. Usually all these items they’re charging separately for are covered in their commission. If you’re agent or broker is adding in fees, ask them what the commission covers. They are already getting paid if they write up a successful contract.

Many first-timers are unaware of cozy ties between agents and the lenders, home inspectors and title companies they recommend—relationships that can boost a buyer’s costs. If your agent or broker is recommending someone or using “their own people”, ask them if they are getting a kick-back or referral fee. All of this is supposed to be disclosed to the client to start with. Many of us have our own people that treat us well because of an on-going business relationship. I use my people because they’re good, and many times they will give my clients and me a break because of the volume of business. I don’t want a referral fee. I want to close the sale.

Bottom line is no one knows for sure what shoe will drop next, but if you have been wanting to buy a home and you need assistance for the down-payment, the tax credit, etc., and you’re planning on being in your home for several years to wait until the market turns around and you have some equity, then this could be a perfect time for you. A National Association of Realtors survey showed that the average first-timer hopes to stay in the home for 10 years, up from seven at the peak of the boom.

If you have any questions about the market or anything to do with real estate, feel free to leave a comment below or contact me direct. There’s no obligation and no “fees” for talking to me. LOL