Vashon Homes & Events from Go! Real Estate

Vashon Island First Time Home Buyers: A Golden Opportunity If You Are Well-Informed

December 19, 2008 at 3:37 am Leave a comment

The confluence of low mortgage rates, an over-abundent inventory of homes listed for sale, and a growing interest on the part of lenders to write new mortgages has created a golden opportunity for first-time homeowners.  In fact, the Seattle Times recently called thi8s the “buying opportunity of a lifetime,” while acknowledging the the actual bottom of the market will not be identifiable except at some point through future hindsight.

However, the imminent availability of a 4.5 % 30-year fixed rate mortgage should be a sweet incentive to home buyers and result in a surge of new mortgage applications.  In fact, it is not unreasonable to think that a glut of applications may cause the proverbial Johnny-Come-Lately to arrive late to the queue and suffer missing the prime period for the availability of this mortgage rate.  One thing is certain, the rate will not be permanent as the federal government decides when to cease carrying the risk on guaranteeing these loans. 

First-time homebuyers have their traditional advantage in negotiating prices with sellers, their purchase offer is not contingent on selling another property.  These homebuyers should expect to be courted by sellers offering an array of sweeteners to a deal. 

The first-time buyers needs to remain practical in this giddy environment.  One study, “The Changing Prospects for Building Home Equity,” predicts that buyers in 33 og the 100 major real estate markets may see a decline in their home value by 2012, in areas including New York City, Los Angeles, San Francisco, and Seattle.  However, the well-informed consumer will realize that these predicitions are regional and not local.  Accordingly, buyers should take the time to research the specific neighborhoods that they are interested in for purposes of investment potential.

The practical first-time buyer also needs to be absolutely realistic about what they can afford, in the face of more readily available mortgages.  The rule-of thumb is that no more than 28% of pre-tax income should be budgeted for mortgage payments.  While the high-flying practices of the mortgage industry has ignored this rule for a number of years, buyers should exercise their own discipline with their budget.

Further, the well-informed home buyer should consider mitigating risks in the face of todays turbulent employment market.  Prudent consideration of jobh security today may prevent a lifetime of adverse consequences associated with making a bad mortgage decision.

Finally, a first-time buyer should interview a number of buyers’ agents to see that they are receiving the expertise and service they need to make a sound purchase decision. Believe it or not, not all agents are a good fit for your unique needs . . . and not all are willing to put off a quick commission when a buyer may be leaping without looking.  A buyer needs someone to watch their backs when they are enthusiastically measuring for curtains in their “dream house.”

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Entry filed under: • Real Estate, Housing Market News. Tags: Seattle first time home buyers, Seattle homes for sale, Vashion Island Homes for Sale, Vashon Island First Time Buyers.