Continuing Housing Woes

It's pretty apparent that the housing market is far from turning around. In reading some analysis over at The Motley Fool, existing home sales are down over 25% from last year. That's nuts. When you couple that with the fact that there are more and more houses coming onto the market because of foreclosures, the glut of available houses is just amazing. I thought I had a lot of choices when I was looking during the winter. And I also thought I had lots of bargaining power then. In thinking about it, the people that are going to benefit from this housing hurt are first time homeowners (who can actually acquire mortgages) who know how to negotiate.

Thinking back to when I was looking, there were many houses I was looking at and I put in an offer on a few. I was willing, at times, to pay up to 94% of the list price for a house. One house I even came very close to closing on at about 95% of the list, but didn't pull the trigger because I felt I could do better. I did. I ended up getting a house for a little more than 80% of original list, which was great. Sure, my house is losing value every day as the market plummets, but I don't plan on moving and I did get a good deal as it was.

Part of the reason I was so fussy with buying a house is the enormity of the purchase. A home is the single largest purchase an average person can make. You're signing up for hundreds of thousands of dollars of debt. That's pretty daunting. Because of this, I took a very cautious, get educated approach to purchasing my home, especially when it came time to decide on a mortgage, especially since there are a lot of choices out there for what type you can take.

What gets me is that some people hardly pay attention to what they're doing when they sign up for a mortgage. It's evident by the sub-prime fallout we're currently experiencing, but it's also evident in how many people Ameriquest had tricked. They are now no more, but the fact remains that tons of people got themselves in a lot of trouble financially through them.

I'm hoping that one of the positives to come out of the housing problems that seemingly everyone is experiencing is that you need to pay attention and be smart when it comes to buying a home. You can't overextend yourself, get a free lunch, or hope you'll be better off in the future because, more than likely, things won't turn out how you expected and then you're screwed.