An d your timing could not be better to buy a home, than right now. Home prices in the Boise-Nampa Metro area are down 35-50% and with interest rates setting record lows, affordability conditions are the best in decades. You could save hundreds per month in housing cost and your first payment skips a month when you buy, giving you time to recover.

Over the long term, buying is cheaper than renting by far. Despite the current downturn, homes have appreciated an average of 4% per year since World War II according to NAR, and the gains are tax-free for most.  This is why the net worth of the average home owner is many times that of a renter. 

Now in my 21st year representing buyers in the Boise area, I am very excited about the wealth creation made possible by this real estate market.  For years, I had buyers telling me they might never be able to buy a home, because appreciation was out-pacing their income. The door is open for so many more home buyers now.

Are Your Expectations Reasonable?  All real estate markets are local. Idaho is far ahead of the national housing recovery. The overall supply of homes in the Boise Metro is a third of the national supply. Today, less than a 3-month overall supply of homes in Ada & Canyon counties. This means, if no more homes were listed, we would run out of homes in less than 3 months, based on the pace of sales.  

In some of the lowest price ranges, the supply is even tighter, mostly in Ada County.  This super-low supply means multiple offers are common and buyers have less bargaining power to get price reductions and closing costs paid by sellers. My job, as a buyer's agent, is to help you negotiate the best possible price, but don't expect 20% or even 10% off asking. The average home seller near Boise moves about 2% off asking price, according to the MLS. Although, it is common for sellers to pay up to 3% toward buyer closing costs.

The foreclosure bubble has been a huge part of the Boise housing markets for the last 4 years, but the worst is over- another reason to buy now.  The number of foreclosed homes for sale is down 70% in the last year. When you start searching, you'll find nearly 1 in 3 homes listed for sale in the Treasure Valley is a short sale and 1 in 12 is a foreclosed home (REO).

See my Market Monitor for details on the Boise housing markets, short sales, foreclosures, supply & demand levels.


Should you look at short sales?
Short sales are full of uncertainty. On most short sales, the asking price has not been approved by the the seller's lender(s) and this could take 1-4 months.  Until you get the seller's lender written approval on the short sale, you can't lock in these record low interest rates or plan a move.  Many short sales are attractively priced to get offers quickly- if you can wait.  See my blog: Short Sale- What It Means For Buyers.  

How Much Money Do You Need to Buy a Home (primary residence)?   
 Much depends on financing.  In most cases, you'll need $1000 earnest money deposit to make an offer on a home, which is credited toward your closing. Most sellers will pay closing costs, typically around 3% including loan fees and reserves, so we're talking about down payments. 

• VA Loans are zero down with no monthly mortgage insurance, which saves the buyer around 1% per year, compared to other low-down financing options. I have helped many veterans get closing costs paid and ALL of the earnest money back at closing. Zero out of pocket.
• FHA loans are the easiest to qualify for and loan limits in the Boise area are just over $300k, making this the most common program used by home buyers today. FHA requires 3.5% down payment coming out of your own pocket, although it can be a gift or be borrowed from a 401k or against certain assets the lender must approve.
• IHFA (Idaho Housing) loans are for first-time (not owned in the last 3 years) buyers who make less than the median income and require 3.5% down payment.  Zero-down option! Idaho Housing also offers help in the form of loans or grants to cover the down payment and closing costs. See IdaMortgage Down Payment Assistance or ask me for information.
• Rural Development Loans are zero-down loans for lower income buyers in less populated areas. Only areas in Kuna & Star qualify in Ada County. In Canyon County, the Middleton area, areas West of Caldwell, areas South of Deer Flat Rd near Nampa qualify.  Ask your lender if you qualify. 
• Conventional (non-government) Loans require as little as $500 down with golden credit, but most home buyers will need at least 5% down payment.  This depends on the condition of the home, price range and other factors in an ever-changing mortgage market.

Buying a Home- Step #1 Get Qualified For Loan
Are you even in the ballpark? I can pre-qualify you with a short Q&A on the phone and refer you to a reputable local lender. For little more than an hour of your time and the cost of a credit report, a lender can tell you exactly what your options are in financing a home purchase. Before you look at any homes, you need to know:

• If you qualify and if not, what you need to do
• Which loan programs you AND the home must qualify for
• How much you'll need for down payment/closing costs to complete the purchase
• The price range of homes you can buy with a comfortable payment

Having a pre-qualification or pre-approval letter from your lender not only prevents you from wasting time on homes you can't buy, but also puts you in the strongest bargaining position with sellers.  Many sellers will not even consider your offer without proof of qualification, including foreclosed homes. Take the first step and get pre-qualified. See my Preferred Partners for a selection of proven mortgage professionals.

Do You Qualify For a Home Loan? Know the Math

Who is on your side in a real estate transaction?
The lender? Ha! That's a good one. The Title Company? No- impartial. The listing agent? No- under contract with seller. An agent working with the buyer? Not without a contract. In Idaho, only signing an Exclusive Buyer Representation Agreement holds your agent to the highest legal standard in representing your interests .

Learn more about home buying.  See my Blogs on: Buyer Beware, Searching the Internet for Homes

Still have questions? Contact me for answers.

Dan Rowe ABR CRS GRI
Broker of Dan Rowe Realty

(208) 866-3481

danrowe@cableone.net

Contact me to get started on the path to home ownership.

I serve the following areas of Idaho: Ada & Canyon Counties, Boise, Meridian, Eagle, Star, Nampa, Caldwell, Middleton.