Is this a good time to buy a house?

So many people can't sell their houses right now, so it seems like a good time to buy. However, is it really? What if the economy really is suffering and you lose your job and get stuck with a house you can't afford? Am I being paranoid?

I work in banking. I get to see what clients come in and at what stage of the property cycles they turn up - and what they're buying.

Right now, the amount of investors snapping up bargains and racking up positively-geared rental properties is amazing. I only wish I was in a stronger position to buy again instead of clearing past debts. I'd be jumping on the chance now - but that's me personally. It's all individual and completely up to you.

Of course, the amount of broke people begging to refinance/consolidate to save themselves is also on the rise.

If you believe the housing market will rebound and we are in at close to the low, now is a great time to buy. I wrote an article or two on this subject with the gist being houses are going at deep discount prices to the expected recovery.

If you think the same way, buy. If not, wait till it rebounds and buy on the upswing.

BTW, I also do short sales so that is another avenue. In today's market, the menu is quite full and the smart buyer can position him/herself for some large profits.

I think we are in for a long spell on this one. I'm thinking the houses will get cheaper as the economy gets worse.

I say no,unless you have the cold hard cash on hand. Banks aren't giving out loans like they used too. Plus houses will more likely go down in prices,so wait.

Call me cynical but the way things are going I'm thinking buying a small, inexpensive camping trailer might be the only answer if you want shelter. After some of the reading I've been doing it appears we are living in a false economy that is dangerously close to collapse. Might be alot of people without homes in the coming year or two.

Hey Merdecat, I think unless you pay most of the price down and finance a small or no amount, there will always be a question of losing work, or some other unforeseen financial problem arising.

I think in Ontario, someone would be well advised to wait to buy if they could, but we're not experiencing the same things in real estate here that a lot of our American friends are.

I think we'll be seeing things in the economy in the next few years that we've never seen before, like high prices for gas and food.

Let's say we are living in a false economy and it collapses. What do you think will happen to the apartment complex or housing unit in which you are now living? If you own a home, what will happen to it?

The answer: nothing. It'll still be there and you will still have to pay rent or your mortgage. Only three things can happen to force you out of your dwelling. One, a disaster that causes irreparable damage, two, you quit paying and three, if you live in a rental and your landlord quits paying the mortgage. In all three scenarios you will be out of your dwelling.

False economies and bad times don't just happen to the other guy. They have a ripple effect and we all get sucker punched. Where I live, the number of renters that are being displaced by foerclosure is almost at record level. Mind you, the foreclosure isn't against them, it is against the property's owner but they have to leave their dwellings none the less.

If you can afford to buy, NOW is the time to start your search. The beauty of today's market is the negotiation process once you find the home you want. I say that because the asking price is no longer a take it or leave it price. It is very fluid.

By fluid I mean negotiable. The person selling in today's market more than likely has a need to get out. Their reason doesn't really make any difference. It opens up great deals for potential buyers.

As for lenders tightening up, so what. Let's say that is really true. I say fantastic, that is what they should have been doing seven years ago. As for qualifying for a home, unless you have a FICO of 590 or lower, you can get a loan.

Yep, your credit history and ability to pay still determine your qualifying ability. Since I am involved in the foreclosure market, I work closely with a lender. I asked him what's changed. He said, "now the lenders actually want to see the person is qualified."

I'll let  you decipher his words. So I don't sound like a preacher, I'll close with saying do your homework before you buy. Remember, your home is nothing more than your home. It doesn't become an investment until you turn it into one. 

This is a great time to be in the market. The bargains are everywhere. Hint - here is a great starting point: the REO market.

You know, after reading this post, I went and spoke with my boss (I work at a bank remember) and asked him what I'd need to do to qualify for a small loan. He gave me a lot of great tips and advice - but I'm just not ready yet. There are a lot of people going into foreclosure here and the demand for rental properties is massive.

I know I'm under a mountain of debt right now, but I'm working hard on clearing that and it won't be there forever. I'd really like to stabilize my financial future while things are cheap.

My goal now is to act on the boss's advice and get myself out of the mess I'm in so I can move forward

Raven,

Since you work in a bank you are in a good position to find what you need the most - an investor. You already have the foreclosure pool from which to draw. Here is why  you need an investor - to buy the property you find.

Here is a short course in foreclosure investing. You find a property and buy it for let's say 100K. Your investor buys it from you for 120K. You pocket the 20K. The investor's incentive is the mkt value of the property which will be about 160 -170K.

You will do a double escrow which will allow you to collect the check and not bring any money to the table. Your credit won't make any difference nor will the amount of debt you have. The reason is simple - you aren't applying for a loan. You are merely acting as a middleman.

How do I know this works?

I've done it.

Good luck.