Buying or Selling a Home/Good time to buy

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Expert: - 12/15/2008


Question
Hello Todd..please help is it a good time to buy now or will it get better ?? I want to buy but I am hearing it will get even better for the buyers market.TRUE OR FALSE ??

Answer
Hello Katie - This answer depends on your financial position, and whether the acquisition is for personal or investment reasons. Prices are low, this is true. Nobody can predict if competition or the market will drive the home prices lower, although home prices and home values are two separate issues. Prices may be low due to inventory or competition but value is established by the cost to build, or rebuild. In other words the value of a home is comparable to the costs associated with the components... such as cement, lumber/framing, plumbing, electrical, etc. Of course, condition plays a role in value as well. Today, the sales prices are below the home values because there is so much inventory of homes since financing terms are difficult to qualify for thereby reducing the number of approved buyers that can close. This is good news for buyers who can qualify or chose to pay cash. Of course, leverage increases cash on cash return. You must decide if you are willing to buy today even if the market was to be more competitive (reduced price, not value) and how long you would need to hold the property to achieve your desired return. Ultimately if you are considering a purchase as a personal owner occupied residence then the volatility issue in regards to the capriciousness of the market is reduced significantly, making today a better time to buy. One final thought, not that there aren't more considerations to consider, is to consider what is the worst thing that could happen if you were to buy now, and what is the worst thing that can happen if you were to wait? If you buy now how much lower can prices drop? What will the interest rates be when finance is more available? What will the prices be like if I wait say 6 months, 1 year... and what will the interest rates be like if finance is available and there are many who can take advantage of flowing finance? Many professionals interpret that you should buy now, if you can afford to, at the current historically low rates, and hold on tot he property. If you are an investor the property will more than likely positive cash flow right away. If you are an owner occupant you will be owning more home for the money, and payment, than if you wait... they say. If you wait, the bottom of the cycles are always missed by fear of the unknown... or over-conservatism (not the political party) and actual recovery is so quick many miss the opportunity. The decision is different for everyone, which is why this reply does not specifically answer your question definitively. Rather, I hope I have provided you with some food for thought in making this decision on your own based on your own market, and financial position. Read a recent New York Times article  “Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers,” wrote Ron Lieber in a Dec. 6, 2008 New York Times article, “It May Be Time to Think About Buying a House.” http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html I would be happy to further communicate with you on the subject of purchasing and timing. Let me know if I can be of further assistance.- Todd

Buying or Selling a Home

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Todd C. Menard

Expertise

National Association of Realtors Code of Ethics and Professional Standards * Contract Questions: 05/05 Arizona Real Estate Purchase Contract, Exclusive Buyer Broker Contracts, Listing Contracts and associated contract documentation as it relates to boilerplate, covenants, contingencies, procedures and procedures. * ARMLS Arizona Regional Multiple Listing questions * Real Estate Professional Standards and Practices, Ethics, Obligations, Duties * Agency relationships in Arizona, Procurring Cause * Questions typicaly arising during the listing period * Questions typically arising during the escrow period * Questions about working with a real estate agent/REALTOR * Questions Related to New Home Builders

Experience

National Association of REALTORS Board of Director (2011) Arizona Real Estate Salesperson License (1991-1995), Arizona Real Estate Brokers License (1995-Present), Arizona Association of REALTORS Board of Directors (2008-Present), Arizona Association of REALTORS Professional Standards Committee (2008-Present), AAR Certified NAR Code of Ethics and Professional Standards Instructor, Southeast Valley Regional Association of REALTORS President-Elect (2011) Southeast Valley Regional Association of REALTORS Board of Directors (2008, 2009), Southeast Valley Regional Association of REALTORS Grievance Committee Chairperson (1998-2007), Southeast Valley Regional Association of REALTORS Bylaws Committee (2008-Present), Southeast Valley Regional Association of REALTORS Education Committee (2008), Arizona Association of REALTORS Forms Committee - Residential Purchase Contract (2005), Arizona Association of REALTORS Forms Committee - Residential Rental Agreement (2008), Arizona Association of REALTORS Forms Committee - Buyer Broker Agreement (2009), Arizona Association of REALTORS Presidents Advisory Group, Road to Professionalism (2009), Arizona Association of REALTORS GRI Curriculum Review Committee (2009), Arizona Department of Real Estate, Commissioner's Education Advisory Group Sub-Panel B (2010) Arizona Department of Real Estate, Commissioner's Statute and License Review Committee (2007)

Organizations
National Association of REALTORS, Arizona Association of REALTORS, Arizona Real Estate Educators Association (AZREEA), Arizona Regional Multiple Listing System (ARMLS), American Notary Association, Southeast Valley Regional Association of REALTORS (SEVRAR), Southeast Valley Regional Association of REALTORS Women's Council of REALTORS (2010-Present), Phoenix Association of REALTORS (1994-2000, 2005-2009), Scottsdale Association of REALTORS (1994-2000, 2005-2009), Maricopa/Glendale Association of REALTORS (1994-2000, 2005-2009),

Publications
"Real Estate in 2008"- Lifebushido Publishing (Contributory Author), SEVRAR Magazine, Internet Crusade, RealTown ListServe, Blogger.com, Active Rain

Education/Credentials
- AAR Certified Ethics and Professional Standards Instructor, Graduate REALTOR Institute (1993), Certified Negotiation Expert (CNE), Over 100 Hours of annual real estate continuing education, Annual Ethics and Professional Standards Development Workshops as required by the National Association of REALTORS, Approx. 36 hours of NAR Code of Ethics training annually, Numerous IDW, Seminars and Train the Trainer programs, Business Management Degree - 1981

Awards and Honors
2009 REALTOR of the Year Award, Southeast Valley Regional Association of REALTORS (10,000+ Members), Double Platinum Production Award ($45,000,000 Sales Volume)- Keller Williams Realty Int'l (2001), Top 15 Sales Production Keller Williams Realty International (2001), Top 5 Sales Producation Keller Williams Realty Southwest Region (2001), Top Recruiter Award - Keller Williams Realty Int'l, SW Region (2002), Who's Who in U.S. Executive (1983), Who's Who in U.S. Real Estate Professionals (2007)

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