Buying or Selling a Home/To Buy or Not To Buy


QUESTION: My wife and I recently relocated to the Temecula area in Southern CA. There is lots of new construction as well as pre-owned homes for sale in this area. We really have fallen in love with the area and are ready to settle down here for at least 5-7 years, maybe longer. While there are lots of choices, the only home we feel strongly enough for to make a purchase is a 2+2 new construction townhome. Price is $250K. Location of the complex is fantastic, reasonable HOA dues, amenities are first rate, excellent floor plan, etc. Here is where my question comes in.

The only way we would be able to buy this home is to borrow the 3.5% down payment ($9,000) from my 401k for an FHA loan. Is this just a terrible idea? Are townhomes not a worthwhile home purchase? Is now not a good time to buy in general?

We are happily renting at the moment, but we just loved this townhome and are willing to make it work if it is worth it. What do you think? Buy this condo or keep renting? Thank-you for your feedback!

ANSWER: Hi Michael,

No easy answer here, you need to check with your financial adviser and make sure you are stable on the borrowing from your 401K.  The FHA program this would buy is in line most likely with all of your qualifying numbers to purchase.  Now is a good time to buy in respect to interest rates and overall housing pricing...

While many may wait till after the elections, if interest rates go up, your purchase power may go down, so in that respect it is 6 of one 6 of the other, try to figure out if you can stay 10 years at the property, my option is 5 years is too short a time line should the market make any big swings... typically it is about a 2-4 year timeline to readjust, although this 'adjustment' is going on 8 years now... so seek financial advise from your adviser (not your lender) as he/she has no stake in your purchase... only your overall financial health.

Good luck..

PS Ask for upgrades from the developer... they will not typically reduce pricing, but they will do some serious can have a Realtor represent you if you notified the developer before viewing that you had an agent..

---------- FOLLOW-UP ----------

QUESTION: Thank-you Connie for all the valuable feedback. I understand all your points. I have checked with my financial advisor on the 401K aspect and have been given the go ahead. I am only 31 and have lots of time to play with my 401K. I am not certain though that we could commit to this property for 10 years. 5 years, yes, but 10 years may be a stretch if we decide to have a child in the next 2-3 years form now as my wife and I have been discussing. So if I cannot commit to 10 years, should we back away from the deal?

My other major concern has just recently been brought to light with the severe drought conditions here in California. I am now wondering if it is a ludicrous idea financially to purchase property in a state whose water supplies are quickly dwindling down to minuscule amounts? If this does happen in the near future, I would think there would be a mass migration out of California into other states with water, leaving the housing market in California in shambles. I realize we cannot accurately predict the weather or see the future of water supplies here with certainty, but this is weighing heavily on my mind. Any thoughts on this consideration?

Hi Michael,

Don't worry about the drought, people will live here for a number of reasons, not water pricing.. people have a way of adjusting...

on the property, if you are buying new, try to get into an area that is well established, the new homes are great, but if you buy into a phase that is selling out and they are just going to open up a new phase, then you are now the 'old' place on the block (area)

In areas of mass room for expansion it is hard to buy new and watch your value decrease as new homes are built and buyers want that 'NEW' never touched home...

you may do better in a wall established neighborhood... they tend to be on the even keel and if you are staying only 5 years, that will fly by before you know what hit you (especially if you have kids in the mix!)

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Connie Wildasinn-Broker,GRI,CPRES,RealtorŪ


Broker,CPRES,GRI,RealtorŪ, Investor since 1979. Buying or Selling Residential and Income/Investment Properties, How to understand the process, how to negotiate through the transaction, What to Look for - But more importantly 'What to lookout for!', How to tell if the time is right - or hold on and wait. Why "Not to listen to your friends and even your family members", Who really has your best interest at heart?. Understand why any market is a good market and how to spot a good investment for you! If you are looking in California.. check out my website and if you need assistance in a neighborhood I don't service, I will locate a local agent to that area who actually knows their profession and can assist you in your needs!


4th generation Realtor in the real estate business, I have helped for over 2 decades clients buy and sell, I am the owner of a local brokerage in the Los Angeles /Long Beach area, and have been a top producing agent in the area since I became licensed. Working through a deal is different to every client, no two people or deals are exactly the same. Knowing how to bring professional advise to the table with clear and concise understanding of real estate world. I can help you handle your buying, selling and investing, managing a 1031 Exchange, working with Equity Sales,Certified in Probate Sales (one of a handful!), Pre-Foreclosure, Regular and Short Sales there is little that I have not seen come across my desk over the decades!


Publications Member, Broker Agent Magazine, Long Beach Business Journal, Long Beach Press Telegram, Signal Hill Tribune, Grunion Gazette, All Experts, Zillow - Lead Agent - Advise Expert, Truila - Advise Expert,

Broker-owner, CPRES - Certified Probate Real Estate Specialist, RealtorŪ, GRI,e-Pro, SSG-Short Sale Certified

Awards and Honors
Managing Broker for WGroup Realtors 19 years running top selling agent in Long Beach, South Bay area California. Top Producer 11 years straight Re/Max - Lifetime Achievement Award Winner, C21, Realtyworld.

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