Expert: Jessica Bryan - 2/21/2010

Question
My wife and I will be moving next summer, after she finishes her degree and I'll be ready to return to school. We're looking at moving to Philadelphia and have been browsing realty sites to get an idea of what we can afford. We actually found a place that, from the listing at least, seems almost perfect. We've got money prepared to make the down payment, but I don't see how we could afford to buy the place now, make payments on it while not living there, and still be paying rent for our current place. The house we've come across has already been listed for 300 days; I don't know if that's a good or bad sign.

What advice can you give us as first time buyers who started perhaps a little early?

Answer
Hi Justin;
You have answered your own question...you don't see how you can afford to make payments while living elsewhere.  If that is really the case, then no matter how perfect the house or how great the price, you won't be able to take advantage of the situation.  However, there is one solution that might help you: I recommend that you  pre-qualify with a lender right now and see if there is a loan program that could minimize your payments until you are ready.  If there is, and if you can qualify, it would be to your advantage since you could then probably qualify for the 'first time buyer' tax incentive as well.  That means that you could get real cash back from the government that could go towards your loan payment.  If that could be amortized over the period until you could move, it would then go towards your monthly payments.  I doubt that they will pre-qualify you using the tax incentive  but I do know that it will make a difference to your bottom line.  Only a lender, looking at all of your information can advise you on this.

As for the home being on the market for a long time...yes, that is a good thing because it will probably mean that the sellers will be motivated to negotiate their price for a sale.  Many homes have not sold during this down market.  It does not mean that it is a bad investment, just that there are not enough buyers out there right now to sell homes.  You should use a Realtor who knows the market area and who can advise you on that particular home.  Being far away, you will need to rely on an expert who understands the market and will work to protect you and your interests.

Best wishes,
Jessica Bryan