May Buyer's Tip-Everybody Marches Out of Step but Jimmy

I don't remember which TV show it was, but there was a sit com back in the *harumph*ties where somebody read a letter from an elderly relative talking about how proud they were of a young man who was doing so well in the army. "I was at the parade when his unit came past," says the letter, "And everybody was marching out of step but Jimmy..."



I think about that scene whenever I start to think about market trends and forces, whether Doom & Gloom Analyst A or Perky & Optimistic Talking Head B is right about what's going to happen in real estate over the coming months. Should we all step out with our left foot, or lead with our right?



Then another memory pops up. I was at an investor conference and the speaker asked the room how many people thought the market would go up over the next 6 months, about half the audience raised their hands. He then asked what how many thought the market would fall, and the OTHER half of the room raised their hands. He smiled at us and then said, "Half of you are wrong. But nobody knows which half."



And so, since May is here and spring is definitely arrived in our City by the Bay, I thought it couldn't hurt to remind people of some basics of buying a home. Like last week's column, this is targeted at your Average Rebel, who is looking to buy a home for their family.

• Just because everybody is doing something, doesn't mean you should do it, too. If all your friends are finally buying houses because they're afraid the market is going to to soar and they want the lowest price possible, fine. It doesn't mean YOU should do it. Plenty of people did NOT follow their friends' actions during the run up to the recession, and also DID NOT follow their friends into foreclosure. Buy only if the deal works for YOU.


• Don't try to time the market. I'm a real estate investor and finance professional, and even I don't try to time the market when I'm looking at a property. I know what risk-levels work for my investment portfolio, and what represents a good deal today.


• Don't wait for a perfect deal. I have said this so often I think it's become a meditation mantra. If you are looking at a home that you like, and it fits most of your criteria, and you know you can afford the payment over time, and that you wouldn't mind living there...what's stopping you??


• Don't rush into things. This is the flip side of the "Don't wait" rule. If you're not sure you can keep up the payment (fer instance), or your real estate Agent is prodding you into making an offer just because "Well, the market's turning and you won't see these prices again," take a deep breath and re-run the numbers, or ask to see another property more within your budget.

Enough said!

And I'm pretty sure Jimmy was a Rebel...

Best,

Larry