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In 1816, the winter seemed to never end. In New England, ice on river banks was still visible in July and August. The year came to be known as ‘1800 and froze to death’ or ‘the poverty year’. It seems 2008, while much warmer and comfortable temperature wise, will be the year of poverty for many in the real estate industry. The year the real estate market never really came out of the winter slow down.

The real estate market usually is subject to certain cyclical phenomena that vary by area. In Denver, winter usually brings a slowdown in the real estate market, marked by slightly lower prices and sales volume. Typically as early as January or February the seasonal market begins to turn around. Well..not this year.

This chart is a stochastic representation of real estate sales prices over the last couple years. I love technical analysis, almost to a fault. In evaluating stocks, charts like these help traders identify trends and compare the current market price to past prices to identify opportunities. To keep it simple, when the blue line crosses up through the red line, this marks the best time to buy in the market. When the blue line crosses down through the red line that’s when you should sell. When prices go one way when the stochastic suggests another, that’s when there might be a trend reversal coming.

Imagine how many REALTOR friends you would have if you bought and sold that often. Thankfully, this model is usually only applied to stocks. A stock’s liquidity makes it possible for it to be bought and sold in shortened time spans. While it is a poor tool for evaluating the length of a trend and potential buying opportunities, it’s great at determining cycles and safer entry and exit points.

Here are a few things you might notice by examining your market in this way.
1. When is typically the best time of year to buy a home? If we look at the chart, it becomes obvious that the best time to buy a home would be between August and February. Of course, if you look at the actually sales stats, you would notice that August might just be the best month to buy a home during the year because not only is there a slight drop in pricing, there is a larger supply of homes to chose from. Deep down, I would never suggest that you rely on the time of year as the number one reason to buy or sell a home, but it always helps to know where you’re at in the cycle so you know what to expect.

2. How has the credit crunch affected home sales in Denver? From my observations, the availability of credit for lower income and even middle income buyers with lower credit scores has significantly slowed the market. Notice how the chart shows a longer, flatter curve all the way into April (2008) compared to previous years with the market bottoming between December and February. This means sellers can expect continued pressure on high home prices. It doesn’t mean things aren’t selling, it just means your going to need to work harder, show better and price lower than you used to.

3. How long will this last? Who really knows. I wouldn’t expect to see stability return next year at this time without significant improvements in the economy. (I here Microsoft wants more sun and is considering Denver…not really but that’s the instant boom I’m looking for.) Additionally, if REALTOR’s out there still think next year will be better, think again. Foreclosures are driving the market down by far out weighing the slowing local economy. Until lender owned inventory starts drying up, expect more of the incredible buying opportunities and poor selling prices. That being said, I’m keeping an eye on the price of ownership when compared to renting, the ratio of home prices to median income, the economy and inflation. There are encouraging signs and improving signs in many of these statistics.

If you saw one of my previous posts regarding the real estate bubble, you would know I don’t believe Denver is a true bubble candidate and thus has a shorter fall. I would expect that prices would continue to decline through Spring of 2009 finally bottoming during that Summer. I wouldn’t expect an immediate recovery either. Prices will likely stabilize before racing back up. Denver homes will start to look pretty affordable by spring of 2010. To arrive at that, you have to make a few leaps of faith regarding inflation, demand and foreclosures peaking this summer. But I’m sure I’m still more accurate than NAR’s method.
Sometimes though, an opportunity can come along that would likely never come again. Housing is very inconsistent and resists almost every opportunity to have an absolute value price. Most great opportunities will appear only for a couple of days before a savvy waiting investor would pounce. At this moment there are hundreds of homes in Denver that didn’t last a week on the market before being snatched up. If it’s a good deal, it’s a good deal. Who cares if you could of saved $5000 here or there when you get what you want and it has a great long term outlook either for you and your family, your pocket book or both?

Not to mention, the smart money loves these down turns. They need them to get into positions they couldn’t normally get into in strong upswings.

A long bottom can represent a real opportunity for some people in some areas. Of course, in most instances, we don’t usually refer to ourselves as the smart money, though we all wish it to be true.

A recent news story on 9news.com brought to light a problem many renters are facing.  The landlord stops paying the mortgage but still demands the rent.   A real estate attorney, Joseph Davies, is quoted as saying,

the “deal with the owner is independent of the owners deal with the bank.”  … “Generally speaking, the rights of the lender are greater than the rights of the tenant.”

Seems reasonable enough but I can’t help but wonder about the fairness of that. 

 What about a tenants right to quiet enjoyment?

   I wonder if the tenant shouldn’t contact an attorney.  Wouldn’t the tenant have a claim of non-performance?

Regardless, if you or someone you know in Colorado are facing problems with foreclosure, you should definitely contact an attorney if you have any questions about your rights.

You should also take advantage of the Colorado Foreclosure Hotline at 1-877-601-HOPE (4673).

The linear thinkers in Real Estate 2.0 seem to believe that by appointing themselves ’mayor’ of their suburb they will rule the roost in their real estate market.  It’s an interesting concept.  A new spin on the old school real estate newsletter that could put an agent on the map.

This is how it would work.  You would pick some area that seems ripe with a financially viable, tech savvy group of people in need of information and hopefully a new home.  What type of information would you feed them?….oh…everything of course.  You see, you would figure out everything your ‘peeps’ are interested in and pipe it to them fresh by blog and RSS feed.  High School player bios, the latest track results, and who’s cat had kittens….people love that stuff right?   All the good stuff.  They wouldn’t be able to get enough, so they would come back without having to be prompted by other means.  Of course you would go neighborhood viral worse than like little Johnny fresh out of kindergarten.

 People would stumble across the site on Google and many others would find it on flyers/mailing that would eventually be phased out once the web presence took over.  Then,  your constant craving for the information I have would keep you coming back like some sort crack head.  You wouldn’t be able to get enough.   Of course all the while I would be subliminally establishing myself as an expert in your area.  The perfect person to sell  your home and the best resource for a buyer.

While all of this sounds great, my gut feeling on this is that it’s not quite possible/likely yet.  I personally am not pursuing this approach to blogging locally.  I am working on some approaches to this but an online newsletter it shan’t be.  I can imagine a client being a little put off by the fact that you just decided that your going to insert yourself into their lives.  I’m on record as saying I don’t think you jack black bencasino gratuites frcasino island blackjackblack jack daveycasino bonus de bienvenueregle jeu roulettewww traiteur casinobonus gratuitsjeu roulette casinojouer video pokerbonus gratuites de casinojack black spider mancomment gagner à la roulette en ligneregle de la rouletteslot machine gametelecharger jeu poker texasjouer seven card stud gratuitesle poker en ligne en françaispoker en ligne bruelentrainement poker gratuitesjouer au poker sans telechargerle poker apprendre à jouerpoker le jeujeux de poker sur internetpoker gratuites sans telechargementworld poker gratuitesjeu de pokerjeu poker freewaretelecharger poker holdpoker en ligne argent virtuelpoker holdem gratuitesjeu de carte pokerjeux poker tour en lignepoker online argentjeux 7 card stud gratuitespoker en ligne francaistour de pokerjouer au poker onlinejeu javalogiciel poker texas holdemjeux pokerjouer poker en ligne gratuitementtournoi texas holdemtelecharger jeu poker gratuitesstrip poker gratuitementpoker sans internetle jeu du pokersalle poker onlinepoker source onlinepoker texas gratuites can be a successful hyper-local blogger unless you live there, have kids, grew up there or have some other attachment that people can use to relate to you on a personal level.  Maybe you should open your office there.

I have some concerns about the hyper-local approach because it seems to be a house of cards built on a card table. 

The card table is the premise that you are filling a need.   The idea that people will continue to choose area experts since everyone charges the same.  The idea that an agent that sells in one subdivision is not qualified to sell in another.    Can you imagine the tedium involved in putting this together?  Tedious as it is, it is possible it could pay off.  Especially if you’re making the comparison to established agents who are using the old fashioned methods successfully but will that transfer well to the Internet? 

Here’s a few more random thoughts, questions and observations that should be considered before starting down this path.  I wouldn’t say you shouldn’t attempt this approach, but rather, I would attempt to resolve these conflicts or plan ways to address the potential issues early in your development process.

1. Brokers need the people,  but people don’t need you.  Is what you got fresh enough to be news to them?  Would they even care to read your stuff?
2. There’s a small matter of trust and privacy. “I don’t want you taking pictures of my kids or anything.”
3. Who Voted you Mayor?  Would they feel you need their permission?
4. This sounds like an incredible amount of work.   Is it sustainable?
5. Will this create a steep barrier to entry?
6. Who is better positioned to do this same job?  Will they take you out at the knees next year?
7. Will the shrinking real estate margins crimp your projected profit?
8. Will this work if you’re competing against an established farm agent?
9. Where do people currently get the information you will offer?
10. How much will it cost to market the blog or will you rely on Google to deliver people to you from the subdivision you’re targeting?

Correct me if I’m wrong, I’ve seen lots of attempts at local blogging but haven’t seen anyone suggest that they’re ‘killing’ it with this method.  A deal or 2 here and there doesn’t deem the method an absolute success.  Even the most successful national bloggers don’t put up numbers that match top farm agent numbers.  While there might be 20 agents makeing the high 6 figures in a big city, the big time local bloggers aren’t among them.   It makes me think the hyper-local approach is over-hyped and merely a new topic for a real estate conferences to ponder and theorize about. 

I personally have researched many of the agents locally that blog as their primary rain maker and it really isn’t that impressive.  It’s a living.  It’s not a surprise really,  I feel they get a fair return on their invested time and money but I’m personally willing to trade money for time if it gets me to the same point or better.   

  The method doesn’t approach the numbers that standard farming brings in.   I’m left with the thought, that if you don’t have any ideas to generate business and you have a very limited budget, this can’t hurt.  I’m sure there are tons of agents out there that have the time to focus on this.   The 2 biggest problems with this is that the Internet hasn’t achieved a true hyper-local capability yet though I would expect that to change.  Second,  I’m not convinced that people would be any more likely to use you than the other guy that got some face time with the potential clients. 

As for the house of cards analogy, once you have it all built and up and running, people using you and all…how easy would it be to knock down.  Will you be able to keep up or will competition take over where you left off.

  Here’s a tip.  Your clients probably Googled you.  Blogging is key to your business because people use the Internet for research.  Especially so when it comes to real estate.  You have a chance to create your own spin, your own buzz.  Potential clients get to know you anonymously  and make decisions about your expertise and qualifications prior to making contact.  Even after meeting you they may want to learn more about you.   

 Just a few thoughts.  Here’s some further reading on the subject:

• Seth’s Blog - Advice for real estate agents (quit now!)
• Jeff Brown - House Agents — Wanna Start the New Year Kickin’ Ass? Here’s How  - My apologies to Jeff for not getting back to the subject sooner.  I had to ‘wrap my mind around it’ some more.
• Life that Pops - Everything new is old

 There is a lot said there and in the comments that might trigger some new thoughts on the subject for you. 

The City and County of Boulder (Colorado) has a great website resource for identifying a meth lab.

 With the rise in foreclosures and more agents being the first people to enter recently vacant homes after and possibly during a foreclosure, a little education can go along way for your own safety and the safety of your clients.  Going into homes before they’re ‘trashed out’ can mean just about anything these days.

I just walked out of the second recent condo conversion in a month that I saw back on the market way at about 30% of what it had sold for.  It had been ‘flipped’ in 2006 by some investors.  In my humble opinion, it seems suspicious to me when large numbers of foreclosures show up all at once in the same building.  There were eight or nine lock boxes on the door.   Postings in the windows.   hmm…

If you know me, you know that this is what I do.  I want to know why and how, so, I did a little checking in the MLS and public records.

  The unit I saw had previously sold for $204k but was now listed at $60,000 in a building that every unit had previously sold for over $150k.  A few even sold for up to $250k.   What makes it suspicious is that there were no real upgrades to justify 204k.  In fact, the value today is probably about $80,000 if it was cleaned out.   No electrical or plumbing upgrades to the building.  Some newer windows and a few new light fixtures in the hallway.  That’s it.    Now it is possible to get $160,000 for this type of unit if it’s done right.

 Some developers who do a killer job on the conversions do make top dollar.  They add roof top decks, change the curb appeal, improve all the common elements and put about $30,000-$60,000 into each unit upgrading the kitchen, bathrooms and finishes.  The units I saw at this place weren’t like that.   For this building though, the appraiser would have to be blind not to notice that the doors were missing handles and nothing that was described in the MLS was actually completed. (business center, fitness room, etc..) 

It’s painful to see because you really don’t get a redo on a condo conversion.  It’s to late.  The building is still a dump.  Can you imagine trying to coordinate an overhaul of the building with 24 different owners.  It’s going to be a blight to the neighborhood for a long time.

They bought the property for $2.9 mill and sold the units for a total of $4.8.   15 days after they closed on the property, they were already selling them.  6 at a time.  Many of the buyers bought multiple units.   They were 80% sold out in 2 months.  In the middle of winter during 2005-2006.  That was not a great time for selling condos,  even nice ones.

It seems like if you wanted to make 1.8 million fast the dirty way, you could get people who were going to file bankruptcy purchase these properties using stated 80/20 loans.  The paper values would support the apparent protection of the 1st lender and the 2nd would be carried back by the seller.  It’s all just funny money right?  Seller kicks back some money to the buyers for the ’service’.  The buyers then try to rent the properties out and never make a payment.  When it all goes south, they just walk and let the properties foreclose.   Now, I’m not saying that is what happened here, but I do think it happens.

I know there are people who believe that the only one they’re hurting when they do this is the lender.  That frustrates me.  It gives the entire industry a bad name.  Especially when a lot of people need to work together to decieve the lender.  It’s no wonder that the agent that listed the property had his license just long enough to do this deal then leave the business by going inactive.  The building had been listed as having an agent owner so he must have been involved.  I wonder what his employing broker was thinking.  Probably wasn’t.  I wonder if the buyers weren’t actually in on it and had their credit ruined by an investor who made a lot of promises he didn’t deliver on.

I’d love to give you the address and name the players…but that seems to get people in trouble.  No, I can’t flat out say that there is some fraud involved but it makes you wonder doesn’t it.

I’m sure there is a lot of reason’s why you may feel you shouldn’t buy a home right now, but here are reasons you should.

1.  You are an investor with a long term view to acquire properties that should appreciate during the next cycle while cash flowing in the short term.   Great investors don’t buy in hot markets, they buy when no one else wants to.  In Denver, one of the best deals of this type are in close proximity to current and planned transit oriented developments all across the city. Check out the Overland neighborhood of Denver and the University Hills neighborhood.

2.  You are not a current home owner and have good credit.  You sir/or maam are a hot commodity.  You should take advantage of that.  The smart money may realize that the current low interest rates on mortgages + downward pressure on home values = A great deal.   You have a chance to ‘lock in’ a payment for your living space.  Your rent in many areas of Denver is expected to rise along with inflation and eventually demand.  Inflation when you own a home is a good thing.  In many ways, inflation can actually help the home owner.  The payments over time ’seem’ more affordable as competitive wages adjust to the cost of living changes.  In addition, home values traditionally keep pace with inflation over the long term.  By picking the right area, you can combine the gains from inflation with actual appreciation that comes when an area is revitalized (Gates redevelopment in Southeast Denver, Platte Park) or business moves into the area (Check out the Fitzsimmons area of Aurora).

3.  You need a place to live.  Sure you could rent a place, but you’ll soon be back in  the same situation again.  Many homeowners will now be open to leasing a home with the option to buy it.  This is rarely an option in a hot market.

4.  Your current home is inadequate.  Often, you just need to make a move.  In this case, the overall market just doesn’t matter.  When you sell a home and buy a home in a similar market, it’s likely that the value that you think you are losing is balanced when you consider both sides of the home equation.  The increased inventory can make it hard to sell but it can be also give you more choice when its your turn to buy.

5.  You just want a good deal.  Good deals are to be had if you know where to look.  If you want a good deal, buy a home in a market that is continuing to appreciate even now.  For example, Denver Highlands up 10%.  “But I thought this was a buyer’s market”.  Or buy in an area that you expect to recover first such as DU, Rosedale, Washington Park.  These are all close to the popular parks, nightlife, and of course Denver University while still having easy access to downtown and the Denver Tech Center.  Trying to locate a foreclosure deal in one of these neighborhoods is highly unlikely.  Rather than looking elsewhere at foreclosure in depreciating areas, buy the best VALUE in the best neighborhoods that you can afford.  Now that would be a good deal.

I know what your thinking,  HQwho?  Don’t fault yourself for not hearing of it.  I’ve been working with them for about three years now during which we’ve (notice my team approach) implemented many changes to improve the overall direction and marketing presence of the company.  Since some of the others in our company are just warming up to the idea of blogging, I’ll get to be the first to discuss what we are doing.

HQHomes.com implemented a new website that has one of the better IDX solutions (just shy of a custom solution) available for searching for homes in the area.  We feel that real estate search is the cornerstone to any long term success for a real estate website.  Considering what our search looked like originally.  This is a huge step up.   One of the features I find the most useful is an RSS feed for the paticular search that you want.  We hope our clients find that this search is better than any currently in use by a competing brokerage.

HQHomesBlog is going to be the outlet for much of our statistical research on different Denver neighborhoods.  We also plan to let this be our up to date platform to give our view of the markets.   We have been delivering a newspaper to some parts of Denver with some good response but find  that most people don’t have the time or desire to open a good old fashioned newspaper.  By the time they look at it, it’s out of date.  The blog will hopefully fill this gap while decreasing some of our costs. 

One of the better side effects of blogging, besides traffic to the website, is the fact that readers and those interested in our company can get a better feel for the neighborhoods they’re interested in and the agents that work in those neighborhoods.  

I’ll be a frequent contributor on the site.  Feel free to stop by and give your opinion of what we are doing.

Can you imagine what the Mona Lisa would look like if Leonardo da Vinci worked quickly with a 4 inch brush?  He probably would not have caught the details necessary to communicate his intent and we likely would never have even heard of this masterpiece.  If the details get lost in translation, much of the artist’s intent will be lost.   Similarly, it’s difficult to communicate complex ideas with just a few words.  A couple months back Jim Cramer of “Mad Money” made a few broad statements about the housing market.  Anyone that watches his show “Mad Money” knows that he claims that there is a bull market in every market (stock market) and he’s going to help you find it.   I find that interesting  coming from a man that said on the Today show that ‘anyone that bought a house now would be making a big mistake’.  Where’s the positivity for the housing market?  In fact, he even said that anyone that bought a house then would lose money.  That’s a pretty broad statement and of course, Realtors and sellers everywhere got all worked up about it. 

The media loves to overstate fact in order to generate some fear.  They love to stumble across the financial equivalent of the ’if it bleeds it leads’ statement targeted to get the public to stop and stare.  Scared out of their wallets, afraid to make a move.   Combined with their love to oversimplify, they start getting dangerous.  They love to pretend their audience isn’t intelligent enough to make their own decisions.  Instead, they make the decisions for you.  That’s not conducive to good investing in housing or otherwise.   Most investors know they can’t just buy the stocks that get hyped each day on CNBC.  They know they need to dig a little deeper.  Sometimes when most people are saying sell, that’s when you need to be buying.

Real estate can be just as complicated as the stock market but thankfully, real estate moves a little slower.  There’s a lot more real estate markets and homes out there than all the stocks that Mr. Cramer claims to have in his head. (I think he’s claiming 2000…)  Certainly, the opportunities in housing have to exist.  I know what and where they are in my area and I’m sure if you work hard enough, you’ll find them in your area too.  

Anyway,  Cramer was on his show yesterday and mentioned that with the rate cuts, he thinks it could be a good time to buy a house again.   Funny part is that, during the time between his first public denunciation of real estate and his recent reprieve, not much has changed in Denver or anywhere else.  Just the Fed’s interest rates.  Mortgage rates will eventually follow but truth is they weren’t bad three months ago.  Some of the outlying areas of Denver will have some issues with the foreclosures, that hasn’t changed.  Maybe the only thing that changed is the fact that media feels it needs to put a new twist on the news.  

 For the most part, the new urbanism movement in Northwest and Southeast Denver has helped those areas of the city through most of the slump.  In fact, I pity the people that passed on the home they wanted in these areas based on news that they should be waiting for a better deal.   Most buyers are looking for the 20% price reduction that will never come.   It’s their loss.  I’ve said it before.  The rest of the country’s problem isn’t necessarily Denver’s problem.   We are not immune from the problems but all the factors that contribute to a strong local economy are still in place.   So don’t get worked up when you hear incredibly outlandish statements saying to ‘do this’ or ’don’t do that’.   There are always opportunities if you know where to look.  I’m sure a sane Jim Cramer would admit to that.

 …have you ever noticed Mona Lisa’s wandering eye?  Maybe she spotted a deal over the artist’s shoulder.

  I’m putting on my armchair economist’s hat today.   I’m still amazed that people would get excited enough to buy stocks just because the Federal Reserve announces a rate cut but it happens more times than nought.   You would think that a savvy investor would buy a particular stock based off of expected growth of the asset or the strength of the company’s financial statements.  What happens when you toss the homework aspect of a purchase aside?  

I think the Wall Street adage is, “Bulls make money, Bears make money, Pigs get slaughtered.”

In my opinion there are only three actions a smart trader would take:  

1. Absolutely nothing.  No reason to buy or sell right then.  Plenty of reasons to wait for the volatility to decrease.  Double check your facts and assumptions based off the new information and revisit the stock later.
2. Short term day trade.  Very Very Short term.  A little risky but to some a drastic, yet predictable, price move could mean a pretty penny.  
3. A move to safer ground seeing that the Fed has reaffirmed that yes, things are slightly less rosy than when they made their emergency rate cut.  Thus, when you see your position spike for no good reason, you’d sell and get into something else…or maybe take your position down and wait until tomorrow.

Now, I’m not a economist or even a stock market analyst, so don’t get too worked up if you understand this much better than I do.  I know this is an oversimplification, but my understanding is that rate cuts are applied when the economy is slowing down.  So when the seven economist types that sit on the Federal Reserve Board of Directors get together, and six of them vote to cut rates by a half a point,  my take away on that would be some concern that there could be some problems in the short term with the economy.  Problems with the economy usually doesn’t bode well for most stocks.  At least until the stocks account for the expectations in the stock price.  So when I see a rally like I saw at 2 P.M today, I try to think about what the people were actually thinking.  The truth is, the people that were buying weren’t really thinking. 

Those that were buying, for the most part, were buying based off emotion.  That’s pretty dangerous when you’re making a purchase.  Whether it’s a stock or a new home, it’s a safe bet that you should only make the purchase if you really understand what’s going on.  What is the asset worth?  Do I need to buy it now?  What’s the advantage of buying right now?  If I wait, do I miss an opportunity or will I pick it up next week cheaper?  Do your homework.   For the stocks today, the simple explanation of it is that everyone expected that there was going to be a 50 basis point cut today.  They’ve expected it for weeks.   It’s been so expected that it’s already priced into the stocks.  So when the Dow Jones Industrial average goes up 226 points without any real basis for it, and especially since the underlying factors actually suggest some negativity in the underlying assets, the smart money that already owned the stock would probably sell,  right? 

In case you didn’t catch the Today Show this morning.  A home buyer in San Diego is suing her Realtor since she discovered she paid $175k more than her neighbor did for their house.   She blames her Realtor for allowing her to ‘overpay’ for her home.  I’ll go out on a limb and say she doesn’t have a chance at proving the malicious intent that is required by law to prove this unless her agent really screwed it up by selling her his own house without disclosing it.  That being said, here’s a few things to remember when buying a house.

1.  Buying a house?  Do your own homework. Validate the comps the agent supplies to you with at least a drive-by.  Develop your comfort level with the price and learn to ask the right questions.   Your Realtor isn’t there to try to second guess your decision to purchase the home.  He’s going to provide you with information about whether the price can be supported or not.  Most of the time they may try to show you what else is available even though many buyers just get sick of looking and want to buy the house they think they fell in love with.   The more experienced agents aren’t going to talk you out of buying a home.  They are there to sell you one, remember?

 2.  The appraisal isn’t really what the home is worth.  There’s no absolute value for a home.  It’s simply an estimate of what the home could be worth on the open market at a particular moment in time when compared to other homes that have sold.  It just means that the price can be supported, at least theoretically….that’s it.   The only time there is an absolute value for a home is the moment it is sold.   At that very instance it has a value.  Ten minutes after you walk out of closing…things might have changed. 

3.  Trying to compare your home to another persons home just isn’t that easy.   It would be like trying to compare two similar women that were 5′6″, 115lbs with blond hair and saying they can both do the same job.  Upon further examination you discover that one is a the female executive of a Fortune 500 company and the other is the meth-head that lives in her alley.   Every home has unquantifiable characteristics that will make the home different from the neighbors house.  The wear of the carpet, the view from the yard, the smell as you enter.   Not to mention the motivations of the seller that may have influenced the final ‘value’.  All of this could easily turn into 100k or more on a million dollar home. 

4.  A home is worth what you pay for it assuming of course that you know what you’re paying for it,  how much that works out to a month, what similar homes have sold for in the past, and most importantly what other homes were available when you were shopping for a home. 

5.  Start asking questions when you don’t understand.  If you don’t trust the answers you get or don’t understand the answers you get, ask again.  Ask other people.  And most of all, ask yourself.  If you don’t know the answer, look it up. 

I don’t mean to be condescending to homebuyers.  On the contrary.  I simply want them to make sure they are awake to the truth that they are the ones that will be paying for the home.  So instead of just saying it’s the biggest investment of your life, act like it really is.  Otherwise, Caveat Emptor.   Finding the right Realtor for you and educating yourself as to the process (or even allowing yourself to be educated) are very important parts of the home buying process.   If you’re not ready to do the work, you probably aren’t quite ready for home ownership.