Should I Buy By Year End?

[Duranimal]

I recently moved to SD. As part of my move, my company will be assisting me in purchasing a home by covering closing costs and 1 point. However, the catch is that I must close by 12/31/2007. My price range is between $400,000 and $500,000. I’ve looked at small houses in North Park and condos in downtown and Uptown. Although I want to take advantage of the $10,000 – $15,000 my company will be providing me, this market scares because I think there’s the potential that it will decline another 5% – 10%. Comments? Thanks.

[bubble_contagion]

Ask them to help you out with rent or give you a single cash payment so that they end up spending the same amount of money.

[patientrenter]

Have you considered closing by year-end and selling a future based on the San Diego Case-Shiller index at the same time?

Patient renter in OC

[patientlywaiting]

bad idea patientrenter. Even if he makes out on the future, he’ll be stuck with a big mortage.

Talk to your employer and renegotiate. I like the rental assistance program. Everything is negotiable. don’t tell them you’re afraid of declining values. Tell them that SD is too expensive and you can’t swing the downpayment to qualify. You want to rent a few more years to save money and get a conservative loan.

Even if they don’t give you a rent rebate, they might pay for you to live in a nicer place than you would pay with your own cash.. Better digs would be nice.

[lendingbubblecontinues]

5-10% on $400,000 ranges from $20,000 to $40,000

5-10% on $500,000 ranges from $25,000 to $50,000

let’s see….rushing to buy this year so that you can receive $10,000 to $15,000 “assistance” on an asset that will lose anywhere from $20,000 to $50,000 doesn’t seem like such a good idea, does it?

imagine if we see an additional 20-30% decline…I’m sure you get the point

[Diego Mamani]

My employer offered me a similar deal, but also offered me a 1-month paid rent in case I wanted to rent instead of buying. Ask your employer for something similar, or 2 months, etc.

I sold my old house in 2005, invested the proceeds, and rented a house at my new location. My new employer paid for the 1st month rent (in the high $2000’s) and I’ve been a very happy renter since then.

Had I bought a house in mid 2005, I would have lost close to $100K in equity. It’s like I’m renting for free!

[SD Realtor]

If you can, try to negotiate a few months rent. What they have offered you is kind of paltry in my opinion. Think about it this way… First off you can ask for a credit from many sellers right now for covering closing costs including a point to buy down your loan. As the market continues to depreciate that will not go away and in fact it will likely improve. Similarly you can most likely find commission rebates from places like Zip or other brokerages that will add more money in your pocket. The potential for decline is much more then 5-10%, ESPECIALLY in neighborhoods like North Park and I will eat my chargers cap if downtown doesn’t fall by more then 10% between now and whenever the bottom of this mess happens.

SD Realtor

[Author]

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