I'm a first time home buyer... I need to ask you anything

[Winsor_Pilates]

Originally Posted by burn_this_city

Wait 6-8 months to buy.. It might be the smartest financial decision you'll make. Housing prices are continuing to tumble, and it takes a loooong time to pay off the amount of money they'll drop in the next year.

This reminds me of another important piece of advice.
You will hear "expert" crystal ball predictions like this from almost everyone you talk to about buying your first home.
I've seen a lot of first time home buyers get stressed out over hearing this everywhere and feeling like they need to time it perfectly.
Truth is, no one know for sure what the market will do, so decide for yourself if it's the right time to buy, and ignore most opinions like the one above, unless they have substance to back it up.

Also, consider the effect of mortgage rates on your house price. A 1% increase in rates will equate to about 5% increase in cost. So if you think the market will go down another 5%, but rates will come up 1, you should consider this.

[burn_this_city]

Originally Posted by Winsor_Pilates

This reminds me of another important piece of advice.
You will hear "expert" crystal ball predictions like this from almost everyone you talk to about buying your first home.
I've seen a lot of first time home buyers get stressed out over hearing this everywhere and feeling like they need to time it perfectly.
Truth is, no one know for sure what the market will do, so decide for yourself if it's the right time to buy, and ignore most opinions like the one above, unless they have substance to back it up.

Also, consider the effect of mortgage rates on your house price. A 1% increase in rates will equate to about 5% increase in cost. So if you think the market will go down another 5%, but rates will come up 1, you should consider this.

You sell condo units. You're definitely an impartial source.

Want proof..? Roughly 5000 oil and gas layoffs since November. People are leaving the city for elsewhere, usually home.
http://www.calgaryherald.com/Busines...361/story.html

Heres an article in todays Herald stating a 12% decline since last year. Just imagine what the stats would be since the peak. On a $450,000 house thats almost $55,000. I doubt anyone pays off that much principal in a couple years. I see many people in this thread that were pretty adamant that prices would continue to climb after the peak. Just wade through the first 5-10 pages of the real estate predictions thread.

Just curious whats going to drive the prices higher or stablize things in the current economy??

[VladtheImpaler]

Originally Posted by Frankster

So I don't want to completely derail this thread, but we are thinking of selling our home and buying a new home. I thought some of the things to look out for might be similar.

We would be selling in the NE and buying a spec home in Evanston (NW).

Any advice?

Whatever you do, STAY OUT OF EVANSTON - what a terrible place. I was unfortunate enough to live there for 8 months (due to job location), and it's a miserable place - it sometimes takes 25-30 mins to just get out of the neighbourhood during rush hour, it seems like every 4th house is always for sale, there are no trees to see, and there is construction all around. Maybe I'm spoiled by Woodbine, but we hated Evanston - we were very, very lucky to sell for a decent price last year and escape.

[Winsor_Pilates]

Originally Posted by burn_this_city

You sell condo units. You're definitely an impartial source.

I'm not an impartial source, but I'm a qualified source, and am warning him against strong opinions on both sides of the coin anyway. I'm not screaming buy buy buy!!!
I'd advise him against following anyone with a know it all opinion on either side of the coin. Truth is, no one knows for sure, and it's just differing opinions at the end of the day. Neither of us have the answer to these million dollar questions, and we shouldn't act like we do.
All I'm saying, is look at the facts, your own personal situation and do what works best for you.

Heres an article in todays Herald stating a 12% decline since last year.

Does that mean it will drop another 12% this year, who knows?? Here's an article in BC saying the bottom may be here.
BC Real Estate Bounces Back
Yes, Calgary is different than BC, but the current economic constraints are similar. I do think Calgary is in worse shape then Van though, and it will take a little longer to bounce back.

Just curious whats going to drive the prices higher or stablize things in the current economy??

I never said prices would drive up, so not sure how to answer this. I think there's a little room to go down, but not significantly, and I think interest rates will go up, so it's a decent time to buy a home.

[burn_this_city]

Originally Posted by Winsor_Pilates

I'm not an impartial source, but I'm a qualified source, and am warning him against strong opinions on both sides of the coin anyway. I'm not screaming buy buy buy!!!
I'd advise him against following anyone with a know it all opinion on either side of the coin. Truth is, no one knows for sure, and it's just differing opinions at the end of the day. Neither of us have the answer to these million dollar questions, and we shouldn't act like we do.
All I'm saying, is look at the facts, your own personal situation and do what works best for you.

Does that mean it will drop another 12% this year, who knows?? Here's an article in BC saying the bottom may be here.
BC Real Estate Bounces Back
Yes, Calgary is different than BC, but the current economic constraints are similar. I do think Calgary is in worse shape then Van though, and it will take a little longer to bounce back.

I never said prices would drive up, so not sure how to answer this. I think there's a little room to go down, but not significantly, and I think interest rates will go up, so it's a decent time to buy a home.

Naturally no one has all the answers. I just feel at this time there isnt anything thats going to slow the decline in values. You make a good point about interest rates. I am trying to time my first home purchase with the price drop and when interest rates start to climb. I doubt ill get the perfect conditions to get both the lowest rate and the cheapest price. But I'm still going to stick it out for the next 6-8 at least to see how the markets are going.

[Shazam]

Housing starts down 90% from last March.

http://www.calgaryherald.com/Busines...693/story.html

[Mike Oxlong]

Originally Posted by Winsor_Pilates

3.95% is the best 5 year fixed I'm seeing right now. Anyone seen less?
If you can get that rate, and want fixed, you're gold!

Once in a while we get some quick close specials that can beat 3.95%

3.95% for a 5 year fixed is ridiculously good though. You are laughing for the next 5 years.

[Winsor_Pilates]

Originally Posted by burn_this_city

Naturally no one has all the answers. I just feel at this time there isnt anything thats going to slow the decline in values. You make a good point about interest rates. I am trying to time my first home purchase with the price drop and when interest rates start to climb. I doubt ill get the perfect conditions to get both the lowest rate and the cheapest price. But I'm still going to stick it out for the next 6-8 at least to see how the markets are going.

Fair enough. Good luck to you in seizing the right moment and getting the right place at the right price.

[evilcougar]

generally last quarter and 1st quarter are the best times to buy. those are usually the downtimes in real estate....so i've been told by several realtors related to me. that said, right now is usually a good time to sell. its hard to decide when the best time is for yourself tho. totally depends on your situation.
good luck.

[ken0042]

The thing for me is that you have to look at it the way that best suits you. Not everybody buys a house as an investment; many just want a place they can call their own. A place they can paint and decorate to their tastes, and can raise a family and then become empty nesters in that same house.

If you plan on living there 10 years or longer, then in the grand scheme of things it doesn't matter when you buy. I bought my house with that in mind; that I wanted to live there forever. So the fact that I could have sold 18 months ago for $60K more than what my house is worth now doesn't affect me. The only good point is now that I am looking at refinancing my mortgage I happen to have buckets of equity in the place.

[dustygoon]

Originally Posted by Winsor_Pilates

This reminds me of another important piece of advice.
You will hear "expert" crystal ball predictions like this from almost everyone you talk to about buying your first home.
I've seen a lot of first time home buyers get stressed out over hearing this everywhere and feeling like they need to time it perfectly.
Truth is, no one know for sure what the market will do, so decide for yourself if it's the right time to buy, and ignore most opinions like the one above, unless they have substance to back it up.

Also, consider the effect of mortgage rates on your house price. A 1% increase in rates will equate to about 5% increase in cost. So if you think the market will go down another 5%, but rates will come up 1, you should consider this.

You need to consider mortgage rates...that is very true. But I think you can time this a little bit. Banks' fear of borrowers going bust keeps rates a little higher as measured as a spread over the underlying government rates which are very low right now. Rates will without a doubt start to go up at some point driven by 1) excessive government borrowing in the US and elsewhere and 2) on the other side of recession is going to be a real inflation risk that needs to be snubbed out with higher rates. So you probably have all of 2009 to wait before this starts to filter through.

As for house prices.....this is going to be largely tied to jobs which is going to be tied the US economy given Canadian export driven economy. I was just back in Calgary and people are still at the malls and restaurants. There seems to be a better go of it in Canada right now vs the US, but I am not sure that is going to continue. We are in the early stages of the credit default cycle. Banks in Canada have not started to take their lumps yet.

Put it this way when trying to time the housing market....there are absolutely NO upside drivers to house prices on the horizon (12 months) but I can think of a few downside drivers.

If you need to buy, like my brother is going to do in Calgary, try your darndest to find those houses that have been on the market for a while and pick the owner off.

Another thing i noted on my trip up to Calgary last week.....natural gas prices are going nowhere but down for a while given the abundance of discoveries over the last few years. Everyone knows where the gas is....getting it out at a decent cost is the risk. So hinging hopes on commodity price rebounds is unlikely. There are probably others that know better, and I am wrapping a lot of things in this little diatribe of mine, but I guess there are lots of elements to think about.

My brother is probably going to buy out of necessity but I think he is prepared to walk away from his low ball offers if need be.

[Shazam]

Originally Posted by Winsor_Pilates

3.95% is the best 5 year fixed I'm seeing right now. Anyone seen less?
If you can get that rate, and want fixed, you're gold!

Yup. Drove by Westcor and they have 3.85%/5yrs available.

[Bagor]

My advice.

Don't use the home inspector your realtor recommends. Get your own.

[Winsor_Pilates]

Originally Posted by Bagor

My advice.

Don't use the home inspector your realtor recommends. Get your own.

Why?
If your realtor is recommending a bad home inspector, you should go one step further and get a new realtor. If you have a good realtor that you trust, why not use the recommended?

[Bagor]

Originally Posted by Winsor_Pilates

Why?
If your realtor is recommending a bad home inspector, you should go one step further and get a new realtor. If you have a good realtor that you trust, why not use the recommended?

Why? Conflict of interest.

I'll quote from Mike Holmes book "The Holmes Inspection" for the rest of my answer (page 12).

"There's way too much co-operation -even dependance- between home inspectors and Real Estate Agents."

"A realtor wants to sell houses but sometimes an inspector will scare off buyers if he tells them the whole truth about the house - and that might not make the realtor particularly happy.
An inspector wants business. So .... to keep the referrals coming from his prime source - the realtor- he might not be as thorough as he should be every time he inspects the house. The net result for the homebuyer is not having the whole story before sugning the purchase offer.

If the inspector you hire has a history of working with a particular agent, you're walking into a situation of divided loyalties.

Even the most honest of realtors can't avoid conflict of interest in this particular area."

Disagree? I don't.

[ken0042]

Well, I like watching Homes' show, but he has a very jaded view of everybody in that book. I was pretty disappointed with it.

Yeah, an inspector could be leaving things out to make sure the realtor gets the sale. But what if the house then turns out to be bad? I know my realtor did such a good job with me he still gets referals from me, and I know at least two other people who have used him to buy their house. If he was using a bad inspector, he could lose that business.

For me, by using the inspector my realtor recommended, I was able to set an appointment with them both, and my realtor and I went through the house with the inspector. So not only did my house get inspected, I also got some first hand knowledge about how some things worked in my house. (Like how to maintain the jetted tub- for example.)

I have to agree with Windsor; if you don't trust the realtor that much, get a new realtor.

I would say though that I wouldn't use the seller's recommened inspector.

[troutman]

Originally Posted by Bagor

Why? Conflict of interest.

I'll quote from Mike Holmes book "The Holmes Inspection" for the rest of my answer (page 12).

"There's way too much co-operation -even dependance- between home inspectors and Real Estate Agents."

"A realtor wants to sell houses but sometimes an inspector will scare off buyers if he tells them the whole truth about the house - and that might not make the realtor particularly happy.
An inspector wants business. So .... to keep the referrals coming from his prime source - the realtor- he might not be as thorough as he should be every time he inspects the house. The net result for the homebuyer is not having the whole story before sugning the purchase offer.

If the inspector you hire has a history of working with a particular agent, you're walking into a situation of divided loyalties.

Even the most honest of realtors can't avoid conflict of interest in this particular area."

Disagree? I don't.

Where is the conflict? If the inspection is negative, the buyer is going to walk away and put an offer on another home. The realtor still gets a deal, so it should not matter to them. In fact, it makes them look good if they can help a client avoid a bad purchase.

It is a buyer's realtor that recommends inspections, not the listing agent.

[Bagor]

Originally Posted by troutman

Where is the conflict? If the inspection is negative, the buyer is going to walk away and put an offer on another home. The realtor still gets a deal, so it should not matter to them. In fact, it makes them look good if they can help a client avoid a bad purchase.

It is a buyer's realtor that recommends inspections, not the listing agent.

It's the buyer's realtor I'm referring to.

All you have said is true, but, however, is assuming an ideal world and totally best practice.

The conflict is that you are dealing with a working relationship where one is dependant on the other to push the sale through, and/or for future business. Am I saying it happens all the time? ... No. Am I saying there is the potential for less than scrupulous practice by putting yourself in that situation? ... Absolutely.

When it comes to buyer beware and JMO but I would advocate getting a totally independant opinion.

[Jedi Ninja]

Originally Posted by Bagor

It's the buyer's realtor I'm referring to.

All you have said is true, but, however, is assuming an ideal world and totally best practice.

The conflict is that you are dealing with a working relationship where one is dependant on the other to push the sale through, and/or for future business. Am I saying it happens all the time? ... No. Am I saying there is the potential for less than scrupulous practice by putting yourself in that situation? ... Absolutely.

When it comes to buyer beware and JMO but I would advocate getting a totally independant opinion.

Agreed. Specifically, no buyer's realtor is going to work with a home inspector who scuttles most of their deals. Realtors don't get paid by the hour. Even if they eventually do find a home for their customer to buy, it means they are investing more work to close each deal. Each deal that falls through means more work for them and less earnings overall.

[Winsor_Pilates]

Originally Posted by Bagor

[/INDENT]Disagree? I don't.

I see your point but it's not a conflict of interest. The realtor has a duty to look out for your best interest and that means happily walking away from homes that fail inspections.
As Troutman has pointed out, it's a situation that occurs with dishonest realtors who just want to get the deal done.
A good realtor would want to work with good inspectors who actually do a great job and be happy to lose a deal if the home fails inspection. If I as a realtor know a building has issues, there's no way I'm trying to get my clients to buy it.
I'd use my experience as a realtor to find the best inspector I can find, who does the most thorough job and use them because they're of value to my clients.

I see why you're hesitant to do this, but again it comes back to you not being able to trust your realtor, more so then a "conflict of interest".