Missing the Rainbow

Not even the sharpest financial minds can predict with any sort of precision when the nation’s real estate markets will recapture the momentum needed to shore-up eroding home prices. One can, however, be reasonably certain that the housing market’s comeback will be a major priority, if not the top priority, of the next administration in Washington. For while no two politicians or financial pundits seem to agree on the best plan for solving the global financial crisis, most believe it needs to start by addressing the root cause of the meltdown— rising home foreclosures.

To that end, plans are now being formulated at several of the nation’s largest banks to rescue hundreds of thousands of homeowners from loans they can no longer afford by modifying their mortgages with lower interest rates, smaller principal amounts and other more-affordable terms. At the government level, the White House is weighing a plan from the Federal Deposit Insurance Corporation that would help upwards of three million troubled borrowers find relief. Moreover, the rate of foreclosures should slow dramatically as many of these institutions plan to place a 90-day moratorium on new filings while the various rescue plans are formulated and set in motion.

This is extremely encouraging news and represents a decisive first step toward stabilizing home prices. Which begs the question: How will you, the average homebuyer, know exactly when prices finally do stabilize? Unfortunately you won’t; except, of course, in hindsight—after prices have already begun to inch upwards again.

You can never time the real estate market perfectly. At best, you’ll be lucky enough to mistime the bottom within a few degrees of accuracy one way or the other. As he penned in a recent op-ed article in the New York Times, no less a master of opportune investing than Warren Buffet admitted that attempting to time the markets is a fruitless endeavor: “If you wait for the robins,’ he said. “Spring will be over.”

Prices for homes in Southwest Florida are at their lowest since 2003. They may go lower still. They may not. What we know for sure is that people routinely gasp with wide-eyed astonishment when they hear properties across the board being offered at what were once unthinkably low prices. While it’s impossible to say whether they are witnessing the absolute bottom of the market, their audible gasps betray knowing an exceptionally good deal when they see one. And that’s the point. Since you can never time the market to the day, you can at least latch on to the best opportunity when it comes your way.

To seize that opportunity when it presents itself, begin your homework now. Keep up to date on what’s for sale in every neighborhood and price range by visiting michaelsaunders.com regularly. Be sure to check out the Best Opportunities page with every new visit. Unique to Michael Saunders & Company, Best Opportunities removes the guesswork for today’s value-conscious buyer by featuring only those listings that have been judged by a panel of real estate experts to be the best priced buying opportunities on michaelsaunders.com. For a more up-close sampling of what’s for sale visit the site weekly for a list of weekend open houses.

If you plan to use financing, get pre-qualified for a mortgage right away. The rumor that banks no longer have money to lend is just that, a rumor; but the days of obtaining a “creative” loan without so much as proving your financial qualifications are history. These days, it’s back to traditional lending practices that require you to put money down, have an acceptable credit score and be able to verify your income and employment status. Michael Saunders & Company, in conjunction with its affiliated lending division, MS&C Mortgage, has loan originators in every one of its 13 sales offices to guide you through the pre-qualifying process. It’s partnership with Wells-Fargo Home Mortgage provides customers of Michael Saunders & Company with access to one of the most stable, secure and dependable lenders in U.S. banking. Further, with our one-stop approach to comprehensive real estate services, you can close on the property free and clear of title defects with the expert assistance of the team from MS&C Title. This is even more critical in this unfortunate era of short sales and foreclosures.

What is perhaps the best buyer’s market in memory doesn’t automatically make buying a breeze. On the contrary. With more properties to consider, more to compare and much more room to negotiate, the buying process has never been quite as challenging. An even bigger challenge is to move confidently on a desired, well-priced property when the temptation is to hold out for the possibility of further price relief and gamble that the property doesn’t sell in the meantime. That’s a little like ignoring a rainbow to search for the pot of gold. By the time you realize the gold is a myth, the rainbow is gone.