Oh Wow...

"So - I guess I'm hoping you can help educate me on the "right" way to buy a home in a buyers market."

That's a loaded sentence!

There's no one-liner that will provide the information you need. There's "Home Buying For Dummies" which while I'm not endorsing it does get you familar with terminology & process in a manner that won't put you to sleep. Also, call your bank or credit union. Many have booklets on home-buying free of charge. Also, call a local office of a national real estate agency such as C-21 or Re/max. I think they've also got info available.

Here's a link to the Mortgage Bankers Association website's online home-buying course. It's free.

I can hardly contain myself...my mind is whizzing with questions about the offer you've put in on a house & a lender who "went under". I'll restrain myself & limit my response to education. If you want to talk about the offer though...I'm sure curious.

Good luck to you both,
Wishing you fair winds & safe harbor.

Tricia

Here is a link that might be useful: Mortgage Bankers Association Free Home-Buying Course

Tricia - IâÂÂm happy to talk about it. Oh gosh - should I not be doing this???

The house is small - too small for us (about 1200 sq.ft) but the lot is big for the area. My husband has the talent and desire to add on and up. He fell in love with the location, lot size, and mountain view. We were told that the house went for $740,000 just over a year ago. The owner was a married woman and the title was in her name only. They are Mexican and I understand from the neighbors that many people came and went from that house. The house is now empty and was being offered âÂÂshortâ for $609,000. We were told this is what the lender had agreed to accept. We were also told there were several offers already on the table. We offered $625,000 and waited and waited. My DH noticed it was no longer listed and called our agent. She thought it was in Escrow (we were upset by that news), then came back saying No - the lender (bank, ???) had gone under and another was taking it over so everything is in transition.

Hmmmm, reading all of the "we were tolds" makes me nervous. Did you verify any of the numbers before making your offer? Who was giving you all of these sale, loan, & short numbers? Do you know who was the original lender?

If everything you've been told plays out exactly as stated to you...you could be in for a long wait on that house. It will take forever plus a day for a new bank to get around to your contract on a house they've never heard of. They have much larger issues to resolve in taking over a failing institution. Your contract probably won't have high priority. In fact, it'll most likely have zero priority. :(

Do you and/or your DH know what comparable homes have recently sold for in your area (within the last 3-6 months)?

Tricia

Part of the reason for my original post is due to this particular house. I will say upfront that I like and trust our RE. Still - I am the cautious typeâ¦

I was worried our offer of $625 was too high and I know DH will go higher. I want to buy a home - I just do not want to pay more than it is worth because emotions get involved. Our RE said that prices have come down 10% in the area so a price of $625 is Great! IâÂÂm thinking if it was worth $740 in the first place! How do I know it was just because someone paid that???

When you look at comps - this is too much based on the house size alone. But as DH says - you have to factor in the lot size and view. I donâÂÂt know how to do that...

Triciae - to answer you questions - we got all of that from our RE. DH found the property online and called her to see the place and make the offer. The listing agent is a brand new RE who doesnâÂÂt return calls and makes mistakes (like listing it in Escrow when it was not).

We are in a good position to wait and DH would be happy to if he thought he had a shot.

IâÂÂm sort of surprised by what you wrote (my ignorance). I would think they would love to unload a property to people who are pre-qualified and have no contingencies. In my mind, it is sitting empty and loosing money every month.

I suggest that you find an agent that isn't brand new and has dealt with foreclosures and short sales before.

Sorry Terriks. I went back and read some of my posts. Yikes! What a mess I'm making! :-)

Our RE is not new. The listing agent is. Am I saying that correctly? The one selling the house is new. Our RE did tell us that when dealing with a short sale, the agents donÂt always get compensated. She said it was up to the lender (who is already loosing money) to decide how much (if any) the agents get. If this is correct, I doubt agents like working with shorts! :-)

I'll try to be clearer :-)

I will be getting a lecture on - how renting is throwing away money and you are not taking the tax deduction advantage blah blah...

But assuming you are in one of the hardest hit bubble states my advice would be to continue renting and saving for alteast 2 more years. It is just not the subprime debacle...it is just a tip of the iceberg..at the juncture we are at; there are just too many unknowns about the future of the financial markets and economy in general. Nobody knows what is going to transpire in the coming years so why jump in when you can see that housing market has JUST STARTED retracing.

I say wait and watch what happens in the coming couple of years.

And do not worry about the rising interest rates. As a buyer you should pray for interest rates to rise because the house prices will have to fall further down to compensate for the rise in interest rates. Plus you will be paying less in property taxes if you purchase price is lower. And the best part is in the future(whenever that may be) when the interest rates go down you will get chance to refinance to lock in that low rate.

thats just my thoughts, I know there will be others here who will disagree with me or have different take on the current situation.

trying to time the market is a fools game..There will be no bell going off to let you know the bottom has been reached.If you can afford to buy a home, one you truly want, buy it.Don't view your home as an investment, think of it soley as your home, a place to enjoy family and friends,and if/when you sell, and it is worth more then you paid, thats great..A home is worth just about zero until it is actually sold and check cashed..Make improvements that YOU want to do,forget about "possible" resale value at some point in the future.

That said,don't spend all/most of your $$$ on housing, save for retirement,college for children, rainy day, etc...But enjoy your home..Best of luck in your decision

Sorry, I didn't read your posts carefully enough. I do see that you wrote that it is the listing agent who is brand new.

Given your inexperience, I don't think you should be looking at foreclosures and blind bidding situations. Lots of sharks swim in those waters, it's no place for a newbie. A conventional sale would be much simpler and more controllable. Make sure you hire a good real estate attorney who explains the sales contract clearly. I'm glad to hear that you trust your Realtor, but be careful to personally doublecheck any realtor-based information, and make sure you get critical details in writing.

Also, $625,000 is a pretty expensive house to jump into. With only one year of good income so far, maybe you should aim lower so you have a larger margin of safety should your income go back down. Try to approach home buying with a modest mindset, and keep things as simple as possible.

I appreciate everyone's input. :-) Sadly, $625 is the low end for our area. I still can't wrap my brain around that fact. I've lived in this area most of my life and it is just scary... But I said that 8 years ago too! "You're asking how much? Ridiculous!" - hindsight being 20-20, I should have bought back then...

We didn't set out to buy a "short" - DH has been watching the listings (his new past time) and did a drive by. Once he saw the house - that was it. Not the house, but the yard, location, and view - the house will not fit our current furniture!

DH really wants this place and he does have the skill to make it what we want. If we get this place, I think it will be our forever place (baring unforeseen future ??). So, I will try to support this purchase - if we even have a shot. I just hope we don't pay way too much - which is my biggest concern. If we do not get this house - I'd like to see us sit tight where we are and sock some serious money away... We are living way below our means right now and I have never been able to say that. I can breath! :-)

I don't know where you are, but even if it is a "buyer's market" that does not mean the market has bottomed out. I wouldn't buy something that you are not prepared to stay in at least 5 years.

You can't get emotional about such a large purchase. It's a business decision. A major investment.

A little piece of advice, don't believe anything someone tells you unless it is backed up with documentation. I'd want to see the docs from town hall saying what it last sold for, what it's assessed for, I'd run a search on the sellers, I'd want an inspection report, look at comps, etc. The lender is going under, did you look into that? People lie during negotiations. Look into everything.

Hi Sue. I would *love* to do all of that. How do I get started? Can I do some of it on line? I do work very close to the government center - where do I go when I am there or what should I ask for at the information desk? How much of this can I do myself without the RE?

Try putting the address in zillow.com, that may help you. I've found the comps to be pretty accurate for my area.

It varies by state. In my state you can go to the town hall and get the sales prices and assessed values of all property in town. We can also go onto an assessor's database online and get all kinds of information about properties in town (square footage, features, photos, assessed value, etc.). I would Google the sellers. If the bank is going under I would Google that and I would call the state agency that regulates banks and talk to someone there. If it's in a subdivision I'd go to town hall and the registry of deeds and get all the info on the subdivision (rules, issues that came up during approval, controversies, etc.). While you are there do a search on the property you are considering to see the sales history, easements, mortgages, restrictions, etc. Get a copy of the plot plan. Check for back due taxes at town hall.

jeri - from the gist of your posts, it sounds like your DH wants this house, but you don't. Why on earth would you buy a home that is too small and doesn't fit your furniture? There's supporting your husband and then there's putting your foot down when he doesn't make sense.

Sure you can add on, but factor in the cost, the additional taxes, the disruption to your home and lives.

I'm going to go one step further and state that I think your dh is too emotional about this home and that with your financial history of bad luck, that it may follow you with.

You need a home that you both like, that fits your furniture etc. From what you've written, I just sense that your dh is not thinking clearly in terms of the commitment this type of home would be. Rather, you have reservations and you're perhaps allowing him to take you both back to a position that you don't want to find yourself - again.

You need to be the voice of reason here since your dh is so emotional about this home. I just can't get past the fact that you've said two or three times that your DH wants it, yet it's too small and your furniture won't fit.

As for learning the ropes, I suggest you spend some time and read through the threads here for as long as you can stand. I learned almost everything I know about RE from this site and my two experiences buying and selling homes here.

I also recco you read Home Buying for Dummies/Idiots - it's a great resource to learn the terminology and get general tips.

With your past history of bad luck and financial issues, dont' rush into anything and make sure you buy a home that you both love!

Rereading your 1st post, I'm unsure if you think he will wait it out for this house to come back up or that he will find something else and rush into it.

The original house, as Tricia said, you could be in for a long wait on that house. I would move on.

I wouldn't settle for a house in your price range. To me, it's a bit on the high side, the payments would scare me.

DH and I talked quite a bit this past weekend. We are going to stay where we are for now. I will hang out here and learn as much as I can. :-)