All Susie wanted was a home for her family. She didn't have much money, so she spent several months saving up for her closing costs so she could submit a competitive offer. She'd consulted with a local professional REALTOR(R) because she really wanted to understand what was going on in the market.
She got a preapproval for an FHA loan, rolled up her sleeves, packed up her kids and drove through several neighborhoods, comps in hand. She wanted to make sure she was being realistic about what she could afford to buy, and where. Actually, she'd had her heart set on a 3 bedroom home but soon realized that she just couldn't afford it in the neighborhood she wanted. So, she took another look at the big picture and decided she'd be happy with a 2 bedroom as long as it also had a den or an extra room. With a little perseverance, and a great partnership with her agent, she found it.
Susie's starting to build equity. She's looking forward to a future of reasonably rising home prices,
but her real motivation has always been to provide a home for her family.
Aaron Investor, on the other hand, is still looking. He began his quest a few years ago, as home prices started to plummet. He couldn't wait to get his first offer in. After all, he had cash. He'd heard that the banks were absolutely frantic to get rid of their vast inventory, and were happily taking offers at 30%, 40% sometimes even 50% below list price.
But for some odd reason, his lowball offers just never seemed to stick. Niether did several of his agents. But Aaron was optimistic and openminded-- he could deal with all these market ups and downs. He'd carefully analyzed all the fix-its costs, and was prepared to make a few repairs, although in the back of his mind he was planning to whittle down the contract price even more once he got into escrow, and the inspection revealed all sorts of flaws and needed repairs. Aaron hadn't purchased a new pair of glasses recently and had failed to notice the word "no" which had been peppered throughout the addendum. After all, the investment club had advised him to ignore such tom-foolery, and reminded him how truly desperate these banks were.
Fast forward 2 years.
Susie loves her new home.
Aaorn still doesn't have one.
One of Aaoron's earlier agents had once asked him: "Do you want a deal, or do you want a house?"
Moral of the story: You CAN get a deal AND a house.
Be realistic, and know the market.
La Mesa, CA San Diego, CA