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Hans Bruhner

What is up with this crazy market?

Wednesday, September 10, 2008 - Article by: Hans Bruhner - Pinnacle Capital Mortgage - Message

Everyone knows that this is terrible real estate market, right? WRONG! It is true that it may not be the best time to sell a home. It is true that there are a lot of foreclosures and short sale homes on the market for sale that are helping to drive prices down.... Hello people, that means that there are plenty of opportunities to buy a home for a great price and walk away a big winner.

The best advice I can give in this market is don't wait for the bottom. Why, you ask? You can only see the bottom of the market in the rear view mirror. Even if you time it perfectly, you have no idea where interest rates will be. If you find the house you want in a neighborhood you like at a good interest rate and you can afford it and you are not sure about buying it, refer to items 1&2 above and BUY THE HOUSE!

Buying real estate is not something to take lightly it is not something you should do for short term gains; it is a long term investment. I like to keep it positive and so I will share some real world scenarios. This is probably the most active segment of the market right now. A lot of my clients are utilizing the FHA loan program which allows up to 97% financing. It is a program that is designed for first time buyers but you do not have to be a first time buyer to qualify. We do have ways to get in with no money down right now as well.

Earlier I said this isn't the greatest time to sell a house. Well, think about it. If you sell your home at a reduced price right now..... You get to buy a bigger, more expensive home at a reduced price as well and the savings can be big. One of my clients is pulling some cash out of their current home, renting it out and then buying their move up home also. This gives them the opportunity to buy in this market and sell in a better market. This is a great way to go if you can pull it off. If they are able to sell within 3 years, they can still take advantage of some great owner occupant tax breaks (ask me about that one). This is the best position to be in right now. With property values down and rents holding steady or increasing, it is a great time to buy. One customer I just spoke with today came to me with the idea of keeping her home and buying her dream home. When I presented the numbers to her, it was clear that it just wouldn't work. I was waiting for her to be upset with her new reality when she brilliantly said "Hey! If I can't get my dream home, I can still pull cash out of my current house and invest in more property right now!" She gets it, she can borrow money at a great rate right now and she can invest in real estate in a depressed market. When people ask me when is the best time to buy real estate, my answer has always been "Five years ago." Which is true in almost any market (except for 3 years from now). I am looking on the bright side of things here but I simply can't get up in the morning if I don't. I am not saying that everything is perfect, I have to deliver bad news to people every day. I personally own a duplex that financially under water. BUT, if you are not part of the solution then you are part of the problem and if people are buying homes then we will get through this inventory of foreclosed homes and values will start to go up and everyone who owns a home will be a winner again and you will wish you listened to me.

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