When driving home from yoga a few nights ago, I caught an evening run of "The Diane Rehm Show" on NPR. The focus fell on the residential mortgages, foreclosures and lending. One caller asked about whether now is a good time for first-time buyers to jump into the waters of home ownership, as he'd been living in an apartment and had saved enough money over the last few years to make a down payment. Would prices get lower, he wondered? Could he even get a loan?

These are good questions, not only for this economic climate – but for any economic climate. Regardless of the market conditions, it seems to me that there are certain tried-and-true rules that apply to folks with deep pockets as well as those with shallow ones. The most important of those rules are doing the research (vs. flying by the seat of your home-seeking pants) and honestly assessing your budget (vs. letting your dream house such your bank account dry).

So, research and assessment. This means considering the style of home you want to have, potential locations and checking out the neighborhood (crime, occupancy rates, home prices from block to block, nearby amenities, parks, etc.). There's also determining what of those wants you can afford, analyzing your budget, researching and pricing the costs of must-do repairs and optional remodeling efforts, factoring in taxes and homeowner's association dues, setting aside money for home emergencies while leaving some cash for other lifestyle expenses.

The biggest deal of all is sorting out what you want and what you can pay for in good times (with a steady job and perhaps a rent-paying roommate) and other times (when you're working fewer hours, without a job or on your own). Don't be blinded by what seems like the best deal in the moment; instead, worry about making a smart deal – because that's the best deal for you in the long-run.

I cannot help but think how different things would be today if people had done their research and assessed their budgets several years ago… If they had, I suspect they would have given those lending-happy banks and mortgage outfits a decisively curt "no thanks."

 

A Guide for 2009

http://nymag.com/guides/opportunists/56294/

 

Is the fixer-upper worth the discount?

http://www.voiceofsandiego.org/articles/2009/04/30/survival/280baronfour042909.txt

 

How much more will homes fall?

http://www.voiceofsandiego.org/articles/2009/04/30/survival/281baronthree042909.txt

 

Online database for homes in major metros

 http://www.redfin.com/home