Given the current overall market situation, these are two of the main considerations.

- Rent versus buy --- a. What if the market tanks and you are left with the liability of paying the mortgage whereas you could go

                                          with a cheaper rental?

                                      b. What if you get a job in a different location and need a longer drive? With a rental, you can change

                                           more easily?

- Waiting for prices to drop further

                                 --- If the house prices drop further, waiting 6 to 12 months may enable you to get a better deal

Rent vs Buy scenarios…

I am moving from Sacramento to DFW area, in Sacramento your
statement on lease vs buy makes sense. 
Cheaper to rent versus buy, but from what I can see the rental rates in
the DFW area, at least in the trophy club, Southlake and Flower Mound areas is
higher than the mortgage payments.  Hard
to make sense with so many homes on the market there…

Hi Adams,

I am also moving from San Jose to Plano area and as you say, the mortgage payments are lower than rentals.

As an example, if you get a house for 265K with about 50K down, and 5/1 ARM financing, you can have mortgage

payments of about 800$ per month. This is really attractive when comparing to rental costs and the prices in CA.

So, on a month to month basis and from a short term perspective, this is really attractive.

I have been unable to sell my home in San Jose though.

Having the burden of mortgage payements on two homes, in the eventuality of a big downturn in the economy is

scary.

If you are interested to discuss further (we seem to be in a similar situation right now), let me know.

Yesterday I terminated a contract on a really nice house in the Hollywood Heights.

This would have been my first house - I came to the table with 10% down and good credit.  Had it inspected, no major issues.  Locked in a great rate.  Under normal circumstances, this would have been a good deal and everything would have moved forward.  But then the realization of the risks I was taking set in.

There is a large supply of houses in dallas.  Add to that a backlog of foreclosures, and people who are waiting for the market to improve before listing their home.  Many houses I looked at had already dropped 5-10% from the asking price.  The sellers in my case were already underwater and desperate.  So yeah, I'd love to buy a house, but it would seem that unless I'm willing to stay in it for 10+ years, I could be in serious trouble if I need to get out.

I am not looking to make any money in dallas - I think that would be hard given that historically prices don't move up or down that much.  But I don't want to *lose* money - breakeven is fine.  So I will continue to rent and wait.  It has to be absolutely the perfect deal.  Also, next time I will be much more prepared (I'm reading a few books now and intend to get in touch with a lot more people) and take things a lot more slowly (the option period is key - don't enter it until everything has come together and you are very confident with what you are doing).

I am also thinking the same. Breakeven is fine, but I do not want to lose money.

What is option period?

In Texas, our contracts have a short "option period" (usually 10 days) during which the buyer can walk away for any reason and only lose a small fee (in my case, $100). Typically, inspections are done and repair requests are made during this time, which can modify the existing contract.  If you cancel during this time, your earnest money is returned to you.

We've relocated many times in the last 30+ years.  We learned the hard way that because of relocating buying a home that the mortgage is less than the rental amount is imperative. If we can't accomplish that then renting makes more sense.  Being able to rent out a home around the monthly costs is priceless when relocating.

There are sooo many houses on the market, plus the homes that the banks are waiting to foreclose on. Your right, it has to be excellent deal, definitely a buyers market. If seller doesn't want to negotiate on the price, no sweat just go on to the next home.

Any time piti payments are covered by rent you need to buy.

Aram Arakelyn

Your LA Broker For Life!

Realty Needs Network