As the country inaugurates 2012, with a brighter than normal outlook on a dreary housing market, everyone is chomping at the bit to know what’s in the cards for the upcoming year. If there was one lesson to be learned from the housing bubble burst, it is the lesson that the market is both cyclical and repetitious. However, despite expecting the expected, there are five new lessons everyone must learn when it comes to home buying post-bubble if we have any hope of avoiding another massive crash in the future.
Shop around, online. The current market in 2012 remains a buyer’s market to be sure. However, even in a buyer’s market there is competition. Shop around online using reputable websites that synch with your local MLS (Multiple Listing Service) and consult with a real estate agent when making a home purchase. It costs nothing for buyers to hire representation, because the seller pays the bill.
Don’t mess around with your money. Before buying a real house, make sure your financial house is in order. Lenders have strict qualifying guidelines for buyers today, and it’s important to know what those are, before you fall in a love with a house you can’t get a loan for. Talk to a mortgage broker about what it takes to qualify for a loan and get a list of fees associated with the home buying process. If you have money in the bank and great credit, buying a house won’t be a problem. If not, however, you might be waiting until 2013 or later.
Scope out foreclosures, responsibly. Foreclosure are (and always will be) phenomenal deals. However, not all foreclosures are in tiptop shape. When visiting a foreclosure that has been winterized (heat and water turned off) make sure to get those services turned on and make sure those services are working before you commit to an “as is” contract. Foreclosures properties do not require banks to disclose material defects, meaning that the buyer should beware and be careful.
Don’t forget the short sales. If foreclosures make you a little nervous, consider a short sale as an alternative. While short sales are anything but short when it comes to wait time, the price is usually right. In 2012, short sales will continue to be a steal for buyers who have a healthy helping of patience. Inspection, inspection, inspection. No matter if it’s a foreclosure, short sale or your garden-variety real estate transaction, never forego an independent inspection. The $300 to $400 you invest in this process -even with brand new homes- saves you money now and later on and saves you from many unpleasant surprises and unplanned expenses.
The rules for buying a home in 2012 are simple, and the game hasn’t changed too much from previous years. However, the rules of home buying are becoming tighter and more complex the further we get away from the bubble and bailouts, meaning that waiting too much longer to take the plunge into home ownership isn’t the brightest move. Buy now, but buy responsibly.