Is Now the Time to Start Shopping For a Florida Home

Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.

The Wall Street Journal on March 11, 2008 called this a "buyers market." While the advice the Journal offered is sound, you needs to keep several things in mind as you consider buying a home in Florida or anywhere else at this point.

A home should not be seen as similar to a stock market investment. A home is a place to live; to raise a family or to retire. It may very likely take six or seven years of living in the home to be able to sell it and come out ahead.

Make sure the home you want is "affordable" on your income. At last, lenders are returning to the old standby guidelines of wanting home buyers to spend no more than 28% to 30% of their gross monthly income on mortgage payments, property taxes, and home insurance. They also want to see the total of all your recurring monthly payments not exceed more than about 36% of your gross monthly income including things beyond the home cost such as student loans and auto leases. If you are a potential buyer, don't count on stretching beyond these guidelines because reputable lenders won’t approve such a loan any more.

Cash in the Bank is still King. Having enough money in the bank to pay your closing costs, which typically are 2% - 3% of the price of the home plus another 5% or more for a down payment is necessary. If you don't have it yet, you're probably not ready to start shopping for a home unless a relative has promised to help you with that cost.

Location. Location, location. As good real estate professionals know, homes in established neighborhoods in good school districts with low crime rates are much more likely to hold or increase in value over time than others.

Compare. Prospective buyers should ask their Realtor to show them the selling prices for comparable homes sold recently in the same neighborhood. You don't want to pay too much for a home.

And, finally don't fall for the For Sale By Owner pitch. Many such homes are badly overpriced. That's why they are being sold by the owner directly. No reputable Realtor will take a listing where the seller wants much more than the home is worth in today's market.

If you'd like real estate advice, particularly in the Sarasota real estate market
contact Rich Stover, Sarasota Realtor or in the Tampa market, Cheryl Stimac, Tampa Bay real estate expert.