Ups and Downs of the First Time Homebuyer

So my husband and I are buying our first house in south King county.  We never thought we could afford a house and when we decided to move we thought we were going to buy a mobile home, but after learning about the cost of space rent and the home mortgage combined being the same as a mortgage for a house, we tried for a loan.  Low and behold we qualify for just about enough to get a little, three bedroom, low-end foreclosure.  So we looked around, made an offer, got turned down, looked some more, made another offer, got turned down again, and again, until on the fourth offer, we finally were accepted and entered into a sale-agreement.  There we were, excited and disappointed on this roller coaster ride of seeing all these houses and finding “the one” and then we’re rejected.  Now we can just be relieved to settle into this one that accepted our offer.  It’s a little like being engaged and the day is less than a month away.  Only in this deal you get to have a list of all the things wrong ahead of time and you are responsible for fixing all these issues prior to finalizing the purchase.  In what kind of economy is the buyer responsible for making repairs to a damaged product before the sale of the product?

The problem is the big named bank that owns this house (like many other bank owned properties) has not done anything to the property the entire time it has been on the market, which has been months.  No one has even cleaned up after the previous resident (who apparently had several dogs) let alone investigate or fix any necessary repairs.  Because we are first-time homebuyers we are buying with an FHA loan, which requires us to buy a home that meet certain living requirements, such good roof, floors, plumbing, etc.  Rather than the bank paying to make necessary repairs in order for the loan to be applicable for the purchase, the bank would rather let the house sit there, even after reducing the sale price twice already.  Therefore, the only option we have is to make repairs ourselves so it will pass the inspection and qualify for our loan.  This has been both exciting to choose the new flooring to replace bathroom linoleum when the floor is fixed as well as stressful at the thought of putting all this effort and expense into a house that we have no guarantees will be ours.

After all our anxiety levels get back to normal, we hopefully will be able to move in and enjoy the fruits of our labor.  Now that we are buying in a market that is “buyer’s paradise” we may be acquiring instant equity, because part of the ups and downs of home buying also involve the down prices and the upward investment.

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Now Is the Best time to Buy for Anyone

 

Now may be the best time to buy more than ever. Foreclosures are down 11% from last year.  Problematic loans are at its lowest in three years.  This means that the housing market is beginning its long haul towards the healthy and stable market that it once was.  At the current rate of sales, it may take four years to remove all current foreclosures/ delinquent loans out of the market, but with fewer new loans going bad and fewer new foreclosures, the vast spread of great deals is soon to be snatched up.  Here are some factors contributing to curbing delinquent loans…

…More quality loans are being given, making it more realistic for buyers to keep their mortgage commitments.  Loan modifications give homeowners more options in keeping their homes and are becoming more frequent.  Also, fewer new loans are defaulting than in more recent years.  Check out this article from USA Today on this issue.

So, all this being said, there are surely those of you that are thinking about taking your pick while the picking is still good.  If so, congratulations, because it has become easier now that ever to get started.  Lenders have record low interest rates and there are many public resources available to help homebuyers from down payment assistance to closing cost assistance.

A great place to start may be on the Fannie Mae website, Homepath.com.  It is a searchable listing website with many foreclosed properties throughout the country.  This website is particularly helpful to buyers who want to learn more about the options for purchasing a home as well as offering special incentives provided specifically through Fannie Mae.  The most recent incentive for buyers that was offered was for Fannie Mae to have closing costs covered, up to 3.5% of purchase price, and provided not to just first time homebuyers but to anyone who is making a purchase to occupy.  Although this is currently an expired offer there are others.  Whether you are buying your first or eighth home, you can make an offer on a Fannie Mae house within its first fifteen days on the market without investor competition.  Investor offers will not be considered by Fannie Mae until after this fifteen day First Look incentive.  However, for those that are investors, Fannie Mae also offers deals with an unprecedented 10% down payment versus the more common 20% down.

I conducted a quick search for homes in King County, Washington, for 3bd 2ba under $100k and found eight properties, four had the status “under contract” and four with active status.  I tried again with the same criteria and area only under $120k and found 14 with six “under contract”.  The 8 active listings ranged in price from $118k down to $66k!  If you’ve been waiting for a buyer’s paradise, here it is, but for a limited time only.

RE/Max Continues to Out Perform

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