Need-to-KnowsReal estate markets, values, negotiating practices and transactional procedures are very local -- many real estate news reports that confuse people are not. Unless you live in New York City, it is not a good idea to base your personal real estate decision-making 100 percent on the information provided from an NYC-based expert on the national news. For example, last quarter, both home values and the number of purchase transactions were down severely, nationwide. However, in San Francisco, there was a dramatic 22 percent increase in purchase transactions from March to April, and a 3 percent increase in values. If you looked closer and broke it down by ZIP code, some ZIP codes showed major appreciation, while others were negative. You see, you simply cannot know what the market is like in your state, county, city or even neighborhood unless and until you obtain specific information from a local real estate professional. Similarly, the very brief amount of time allotted to TV and radio experts to dole out advice makes it difficult for them to give an appropriate amount of nuance in the information they present. So much of whether and when is the right time to buy is based on your personal finances, lifestyle and life plans, and no one in the news can analyze that for you. There is no blanket advice about whether to buy a home at any given time that will be right for every single individual or family. For example, lots of folks have been heeding national commentators' blanket admonitions not to buy. In addition to the fact that in some areas, this will unfortunately result in currently qualified buyers waiting until a seller's market to buy, there are high-income prospective buyers who are forgoing tens of thousands of dollars in much-needed tax deductions based on this impersonal and inapplicable advice. Bottom line: A decision of this magnitude truly warrants a custom analysis of your personal finances and family's needs, by a local professional. It may even make sense to speak with several different types of professionals: a Realtor, a mortgage professional, a CPA, a financial planner, etc., depending on your situation, to determine whether now is the right time for you to buy, and how to harness current market conditions to make the best buy possible. Action Plan Decide to make your decision whether to buy or sell based on your lifestyle and life plans. If you want to buy and are qualified to do so, don't cheat yourself out of moving forward and obtaining the professional advice you deserve because of what you see on the news. However, you should get educated about your local market and make decisions about how to best execute your plan of buying in a way that takes advantage of current conditions.
Get your own team of professional advisors, by referral. At the very least, talk with a CPA about the tax implications of home ownership; a mortgage broker regarding the mortgage rates, terms and price you can qualify for; and a Realtor about current, local market conditions and what sort of home you can expect to find at your price range.
Go on a selective information diet. The recent book, "The Four Hour Work-Week," sets out a very extreme version, but try to at least limit your intake of real estate information -- which can be habit-forming! -- to questions you need answered about your home-buying project.
Ask your professionals where they get their real estate news/information.
Build a repertoire of reliable sources of unbiased real estate information, rather than opinion. Then, stay very answer-oriented when you consult these sources. Don't look for news articles to tell you whether to buy or when -- look for answers to concrete questions, like how long the average home in your area is staying on the market, common concessions currently being offered by sellers, etc. As you go through this process of preparing to buy a home, use the real estate news to find strategies and solutions to questions and obstacles that come up, rather than allowing fear to shatter your life goal of home ownership. Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook," and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online. |
