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Many home buyers are still sitting on the proverbial white picket fence waiting to see if home prices and mortgage interest rates will continue to fall.

The  fact is, however,  that Realtors are seeing multiple offers on homes again and according to NAR (National Association of Realtors) the number of pending home sales (homes in escrow) has risen for four consecutive months, showing a sustained uptrend due to the affordability of housing and also in part due to tax credits for first time home buyer's nationally and in California for buyers of new construction, creating a double tax credit for some and as much as $20,000 in tax credits combined.

From April through the end of June, Nationally, existing home sales rose by 2.9%; pending sales rose by 6.74 percent and sales of new homes rose by 3% even though consumer confidence was down by approximately 32%! These numbers indicate that even though the public is worried about the current economic situation, they are still purchasing homes.

Several of the buyers I have been working with have had to write no less than 6 offers to get a home in the right price range that they are qualified for due to multiple offer and bidding wars on the selected property. While there are many homes to choose from, quite a few of them do not qualify for specific loan programs like VA or FHA due to the condition of the property itself. The really good properties that are price great are going quickly; banks that are selling foreclosures are favoring cash offers due to lending constraints and difficulties in general.

There is a theory that if you are planning to purchase a home and live in it for 5 years, it is not going to make much difference if you purchase now or later in terms of value. History has shown repeatedly that over a 5 year span the home will likely have settled into a value that works for the overall general financial plan and you will have paid the mortgage instead of rent, gotten the tax deductions, enjoyed the home and furthered yourself enough that a slight decrease in value over the next 6-12 month s before it begins appreciating will not adversely affect your 5 year financial plans.

Rates as of this week were in the low 5's, over the last twelve months they have fluxed from the mid 6's to the high 4's and everywhere in between, however with only one and a quarter points difference at any given time it would be economically feasible to buy a float down or even buy a point to get the rate you want and get moved while home prices are low. Chances are good that interest rates are not going to go below the mid 4's anytime in the near future.  Besides, when I bought my first house rates were approximately 18%! We survived that interest rate cycle and now when I hear people whining about 5 1/8 I have to laugh at what we paid in the 80's for our first home! 

Home buyers today can, for the first time in many years, purchase an existing home for much less money than what it would cost them to purchase the ground, have plans drawn and build a home. The property values are affordable enough that many investors are pulling their money (if they still have money left) out of the stock market again and purchasing rental and investment properties because the expected appreciation of real estate is superior to what the stock market is returning on investment dollars.

The first step towards purchasing a home today is to find a lender who is not only qualified by whom you will find easy to work with. This person needs to be flexible and available as well as know the details on all loan programs applicable. Ask your Realtor for references for several and meet with them to determine which one is going to meet your needs. You need to have a lender who can write your pre-approval letter without delay when you find the right home - a day's delay can cost you your dream home. If you are going to purchase with cash from family gift or loan, from an equity line or from cash in an account, have your cash verification ready to go. Establish your true, comfortable, reality housing budget with the lender you are working with, and do not push past it! This is part of what has caused the housing crunch we are in - consumers over reaching their reality budget.

The next item on your list once you determine your price range is to get educated on the market. You need to know what the values are in order to make a solid decision rapidly and not delay thus process. Have your realtor pull recent solds in the area and range you are looking for as well as active properties, get the inside details on the neighborhoods you are looking at purchasing in. Is there an HOA? If so what are the fees and is it solvent? You should also know up front what all inspections you want to consider are and what the costs are so that you are ready to go. A shorter escrow will help you negotiate from a stronger position so know how fast you can get your inspections done and how fast your lender can close.  Your realtor and you both need to be aware of any special requirements for the loan if there are any so that you can look at homes with that in mind, it will weed out some of the choices.

Now you are ready to purchase a home!

A detailed wants and needs list is imperative to looking at homes that are truly potentials to purchase. Remember to be realistic - if you have a 1600 sqft minimum because of family size and lifestyle, don't look at 1400 sqft homes unless the price is low enough to add on affordably within your budget.  Try to look at no more than 6 homes per day in order to keep them all straight mentally. Keep detailed notes and create a pro and con list for each. A binder with tabs is a great way to sort the houses - keep the ones that are not acceptable in a section so you remember that you have seen it and why it won't work.

Don't get frustrated with the process, determination is crucial in purchasing a home and getting it at the price that fits your needs. Remember, not to lose site of the end goal: to purchase a home that you will enjoy living in and that fits your 5 year financial goals but doesn't take over your entire life in the process.