Taking The Plunge


So, you spend months and months looking, trying to find just the right house. During that time you see, maybe, 50 or 60 homes and you fine tune your requirements down to a fine point. You figure you’re compromising on many things but the market seems to be warming up to a very great degree and that gives you some motivation. After rejecting house after house…you see a place that actually has possibilities! You can live in this place! What do you do now? Quite often, in my experience, you find enough fault with the place that you talk yourself out of it!

“Well, I’m just not sure about that location”. “It may be too far from work”. “Can I really afford that?” What I usually see happen is the buyer exhausts themselves with all this and eventually succumbs to the process…and they take the plunge. The plunge can also be a process of it’s own. It’s common again in this market for multiple offers to be the rule and once that common denominator has been established the buyer has to decide how aggressive they will be in writing an offer. At first the offer tends to be kind of conservative. It may not go over asking, or it may not have the most favorable terms for the seller. If the buyer misses the mark on the offer, they tend to get a little more aggressive the next time out…and again the next time, and the next time…etc. The point is that there are mutiple opportunities to plunge along the way to ratifying.

There is one group, however, that has a very high propensity to never take the plunge. It’s the entry level buyer who has in his or her mind what they want and finds that dream at odds with the reality of home buying on the Peninsula. Here’s some unfortunate truth, if your qualified to $550,000 the chances of you being able to buy a minimum 3 bedroom, 2 bath single family home in Foster City, Belmont, San Carlos are very, very slim. You can do it in San Mateo…but you’re going to be on the east side of 101. If you want a single family house and your qualified for $375,000 you need to consider Daly City, San Bruno or Redwood City…and you better be ready for iffy neighborhoods and fixer uppers.

Here’s the thing, there’s always options. If you can’t find a house you like, buy a condo or townhouse. Why? Because buying is always better than renting. Take the plunge on something because it doesn’t make sense to keep providing for the landlord’s retirement instead of your own.


  1. Kirill Stoimeonov says:

    “Because buying is always better than renting.” – I am not sure that we live on the same planet. We are still trying to recover from the biggest real estate bubble in history. How about all those people that are trying to sell their homes, which they bought in the crazy days of 2005-2006 market – good luck convincing them that buying is better than renting. This kind of attitude is what creates bubbles and the huge real estate sales machine that is trying to shove properties down people’s throats no matter if they can afford it or not without any sense of really.

  2. Jim Minkey says:

    Why did I know this post would stir it up? “Buying is always better than renting” You can etch that in stone Kirill. There’s an enormous difference between intelligently investing in real estate and what happened in the last few years…especially around here. In many areas the market is virtually back to 2006 levels right now and 100k overbids are occuring. We’re not talking about Antioch, Daly City…or Detroit, we’re talking about Foster City and the Mid Peninsula. By the way, I’m in no way advocating buying more than you can afford but it always comes down to this: provide for yourself and your family’s future or provide for your landlords future. Owning real estate in this area has never been a losing proposition as long as you can weather storms like the one we just went through.

  3. “Owning real estate in this area has never been a losing proposition as long as you can weather storms like the one we just went through.”
    Owning stocks with the similar conditions gives you way better result with less risk.
    I would agree that buying is always better then renting in case you don’t care how much do you pay for this. If we are talking about the Mid Peninsula it usually twice chipper to rent then to buy a similar property.

  4. Jim,

    Flying Mist wide-waters are now selling and listing for below their zillow estimates. Clearly the price decline is going full-steam ahead even in recent months?

  5. Jim Minkey says:

    Good knowledge about Flying Mist Liko…and by the way, welcome back! That Flying Mist closing surprised me too. It wasn’t, however, listed below the Zillow estimate. For what it’s worth, I’ve got a listing closing Friday whereby the sellers are actually making money from when they bought in 2004…at the peak. Also, and for what it’s worth…Zillow??? Like that’s an accurate representation of market value?

  6. I do agree that buying is better than renting. That is the planet of responsible people, and please, there are a lot of us. There are people who are just meant to be tenants and there are people who are responsible enough to be homeowners. And there is absolutely nothing wrong with that. The real estate bubble where not entirely the fault of the “real estate” industry. Its also the people “thought” they can afford it and in reality they can not. Simply put, one can not spend $2 if they only have $1 in their pocket. One reason that makes owning much better than renting, tax! Mortgage interest is the only one big thing we can use as tax deductible and for me, with all these taxes we pay, to be a homeowner is always a good thing!

  7. “One reason that makes owning much better than renting, tax!”
    There is a nasty thing called AMT. If you are buying 1M house you must have a quite decent income, and in this case you should hit AMT limits.

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