If it's a Buyer's Market, Why am I so Stressed?

Blame it on the fact that you like to read the news. Okay, that was cheeky. But the fact is, there is a lot of doom and gloom news out there right now. If you're a buyer, this should be good news, it should fill you with hope and happiness. But it doesn't. Human psychology is such that we are always happy following the investment curve rather than being first and winning at it.

Warren Buffett bought stock in companies that are now the cornerstone of American business years ago. Today, we feel pretty safe buying stock in those same companies. Chances are though that they will not grow and give as huge a return today as they would have had you bought them back then when they were small.

We all love to quote that we should be scared when others are greedy, and greedy when others are scared. Yet very few of us actually do so.

But you are not the only ones to blame. And while reading the doom and gloom news can be unnerving, there are some real changes occurring that might also add to the stress levels of buying a home. And most of these are on the mortgage front. For one thing, 100% financing, which used to be very easy to get, is now undergoing major changes every day. If your credit isn't good, lenders are employing stricter measures if they decide to finance a purchase at all.

Cash always has been king, but lately it's become more common. 20 - 25% down with a great credit score makes you the ideal borrower, but everyone involved is more inclined to double and triple check everything on the documents before they are released to title to sign and this can cause last-minute headaches. Appraisals are stricter (although most homes have no problems appraising if they're priced well) and some lenders require more than the usual three comps.

Being able to document your income counts quite a bit too. In fact, the mortgage broker I work closely with recently mentioned that he has not seen guidelines change at this fast a pace for the last 20 years.

But the fact remains that this is the best buyer's market we have seen in years - barring certain areas like East Sacramento. Some areas are recovering, but prices are stabilizing very slowly. I guess if you're getting the excellent purchase price, a few hiccups are inevitable.

I bet you won't mind five - seven years down the road that the docs took a week longer to sign than you previously thought!