Buying a home in todays market

Among  multiple news stories about an under performing real estate market and a slew of foreclosures, it may seem like a fearful time to buy a house. But tricky conditions are also making it a prime time to buy a home in Florida – if the timing is right for you.

Several factors are contributing to the state’s “buyer’s market.” Homes are taking longer to sell, with home sales falling 34 percent and condo sales declining 28 percent this May over the same period in 2006, according to the Florida Association of Realtors. Median home prices are dipping as well as sellers strive to make a deal and in so doing place buyers more firmly in the driver’s seat.

But even in the midst of a buyer’s market, how do you know whether it’s time to strike or to wait a little longer for the best price? Here are a few suggestions to help guide your decision:

Crunch your numbers: Your dream house will quickly become a nightmare if you can’t afford it so forget the buzz about the market and first decide whether you’re truly ready to buy – personally and financially. Mortgage lenders typically want your monthly housing expenses to be approximately one-third of your monthly household gross income, although VA financing is somewhat different. This means that what you can afford is largely pre-determined by your paycheck. Other costs that you should consider are;

·  Your down payment of between 5 to 20 percent of the home's purchase price

·  Property taxes, which average 1.5 to 2 percent of a home's purchase price

·  Homeowners’ insurance and Private Mortgage Insurance (PMI), which is required by lenders if your down payment is less than 20 percent of the purchase price and

Special assessments (SAs) or special service areas (SSAs), which are becoming more common in subdivisions

·  Closing costs, which include points and other fees charged by the lender and can add up to 3 percent of the amount you borrow; title insurance, which can range from a few hundred dollars to more than a thousand, depending on the purchase price of your home; $200 to $500 for inspections; and other miscellaneous fees

·  Maintenance is a variable cost, but expect to spend about 1 percent of the purchase price annually on maintenance and repairs

Build a team of experts.
Buying a home in any market condition may be the most important financial and lifestyle decision you will ever make so put together a team of experts who will help steer you in the right direction. Ask friends or colleagues which real estate agents, inspectors, appraisers and surveyors they recommend. Interview several and pick one whom you have confidence in and who has dealt in the county where you are looking to buy. Also, be sure to ask for references. In each instance, you’ll need to ask what their fee is and what specific services that fee covers. And once you have your team in place, it’s wise not to commit to anything without running it by them first.

If you find what you’re looking for is within your budget – go for it!

It can be a negative experience for you to wait around for a rock-bottom price when you have found the home you want at a price you can afford. While we all want the best deal, getting the best home ultimately is more important than getting the best possible price.

While it’s normal to be nervous about buying a house, you should feel confident if you have done your homework and acquired sound  advice. While there are no guarantees in life, millions of Americans buy and sell homes successfully in all market conditions. So if you are personally and financially ready, relax as you take the plunge, and enjoy your new home.

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