BIRMINGHAM, Ala., Jan. 1 /PRNewswire/ -- Buy your next house cheap and buy it soon says Alabama's 26-year veteran real estate appraiser. The reason? The Federal Reserve has held interest rates at zero for nearly a year in an effort to stimulate the prolonged slowdown in America's economy.
In her 2010 New Years Day Real Estate Value Forecast, Haney states on her website at judithhaney.com that lower-cost foreclosures and fixer uppers are still the best value for consumers shopping for deals. And, when combined with low interest rates, the time could never be better, she advises.
Haney supports her buy-now advice by citing lender incentives including low down payments, no closing costs, free appraisals and credit reports, renovation loans, and other sweetheart offerings by Bank of America, Fannie Mae, Freddie Mac, Veterans Administration, HUD, and Wells Fargo who are eager to dispose of their large inventory of foreclosed homes.
The problem with postponing a decision to buy, says Haney, is that low mortgage interest rates will not last. Eventually the Federal Reserve's highly inflationary policy of printing more and more money will cause interest rates to increase.
Haney points out that America's overall high unemployment rate has prompted the Federal Reserve to keep rates low which has spurred banks to borrow cheap and lend high.
While the buy-cheap-lend-high policy has helped banks regain their financial health, it has done little for consumers and taxpayers who are footing the bill. Haney worries that consumers will pay an even bigger price for mortgage money if inflation takes off in 2010.
Avoid buying a lemon by hiring independent licensed appraisers and home inspectors before offering to purchase a home, says Haney. And she advises buyers of foreclosed properties to insist on inspecting the property with all utilities turned on before offering to purchase. This simple step allows potential buyers to test the plumbing, electrical, and heating systems. Haney employs the analogy that consumers would never buy a car without turning on the engine, therefore, why buy a house without turning on the electrical, plumbing, and heating systems, she says.
SOURCE The Office of Judith Haney