Question for realtors

**munmun** · 01-25-2011, 06:11 PM

Hello. I am a potential first time buyer. I am aiming to buy ahead of the new mortgage restrictions. I probably will never be able to buy again if I wait. I believe that real estate is the most sound investment one can ever make. Prices have not gone down and never will. Canada is very different to the US and the rest of the world. We have sound banking and lending compared to them. Urban space is limited. Immigration is huge. The Chinese are buying in. Affordability is at a great place. The consumer is financially healthy and the economy will grow. So I have made my decision to invest my minimal savings into real estate with a 35 year amortization before the rules change. I will ride this investment and bank on it for retirement.

However I am getting confused by some advertising I am seeing from realtors. For example one in my area has put out an ad saying that it is a great time to buy (given mortgage rule changes) and a great time to sell (because prices will fall after rule changes). While I strongly disagree with her comment about prices ever decreasing I dont understand the logic around why it would be a good time for me to buy now if prices might decline in the future (even if I only get a 30 year amortization).

Can someone help? Am I missing something?

**Greg** · 01-27-2011, 06:20 AM

Originally Posted by [LEFT

munmun[/LEFT];95449]While I strongly disagree with her comment about prices ever decreasing I

dont

understand the logic around why it would be a good time for me to buy now if prices might decline in the future (even if I only get a 30 year amortization).

Can someone help? Am I missing something?

Get out your history books and you will see that real estate prices never go up forever and always fall at some point. After they fall the prices do come back so there is a net gain over a long period of time but prices will always go up and down and up and down.

From talking to other agents in Canada it sounds like you are in the same situation we were in before the US real estate bubble burst. If your bubble bursts then prices will come down.

the best time to buy a house is when you are ready to own one regardless of what is happening around you. if you don't understand this then maybe you are one of those who were cut out to be renters. Owning is not for everybody.

**Jonathan Radford** · 01-31-2011, 06:22 AM

There are two parts to this equation: the mortgage, and the actual home value. Buyers need attractive mortgage rates, but sellers are only concerned with the selling price of a property, since the mortgage that the buyer receives will not affect the amount that they receive on the sale. Therefore, these agents are suggesting that it is a good time to buy before mortgage rates go up. However, if the pending change to the rule is expected to negatively effect property prices, then it would be a good time to sell as well, since the property is expected to lose value in the near future.