I have been actively involved in Shasta and Tehama county real estate for almost 10 years. I have been on both ends of good and bad markets and good and bad deals. My experience leads me to several conclusions. I will only bore you with one right now.

Now is the time to buy and here are a few reasons why:

Interest rates are still at near historic lows. If you look at overall lending trends, the benefits are solidly with the buyer. I can personally remember having an 18% real estate loan. Compare that to the 6-7% loans that are now available and the savings are huge.

Inventories are large. This means more homes on the market and as a buyer you will have a lot of choices. Take your time and do your research. Good deals are available but GREAT deals can be found.

TAX BENEFITS. In my opinion, this is the single largest benefit to owning a home. As a buyer, it is imperative that you separate yourself from the "equity game". Odds are that you will not realize the 30-40% equity boom that many of your neighbors have appreciated in recent years. We must think back to the reason people bought homes prior to the boom. The interest you pay on your primary resident home loan is 100% deductible.

Why throw the money at a landlord when you can own a home and reap the tax benefit. Everyone needs a place to live and this will show you that owning can be as cheap or cheaper than renting.

Here is an example. Let's say you have a combined or single income level of $30,000 per year. Let us assume that you pay 30% income tax. This tax is taken directly out of your paycheck. At the end of the year you have paid $9,000 in income taxes or 30% of $30,000. You file your taxes and it turns out you really only should have been paying 27%. The Federal government owes you the difference between 27% of $30,000 or $8,100 and the $9,000 you already paid. You get $900 back in the form of a tax refund.

Now let's look at the benefit of substituting a mortgage in place of rent. Let's say you buy a property for $150,000 and your payments are $750 per month. Of this $750 the interest on your loan is $700 per month and $50 goes toward reducing the principal on your home loan. All of this is tax deductible. At the end of the year you have paid $8,400 in interest on your primary residence home loan. Your rent would have been about the same so you have paid no more than you would by renting.

Back to our example. You have paid $9000 in taxes (30% of $30,000). Now comes the fun part. You get to deduct the $8400 you paid in interest on your home from your $30,000 salary. Your adjusted income $21,600 but you have already paid taxes on $30,000. Your tax rate should have been 27%. So now you get to take 27% of $21,600 which equals $5,832. This is what you should have paid, but you paid $9,000. Your refund is $3,168 instead of $900. You make an additional $2,268 just by owning a home that costs you no more than renting.

If you divide your extra income by 12 months you are making an extra $189 per month. Add this directly to your mortgage payment and you monthly payment is reduced from $750 to $750-$189 which equals $562 per month. Let us not forget that you have also paid down your home loan by $50 per week so at the end of the year you owe $600 less on your home loan which is like forced savings.

The bottom line is that owning a home saves you money if you make good decisions.

I will leave you with one piece of advice. If you see a good deal and you are seriously considering buying a home, do not hesitate to make an offer with contingencies. You do not have to have all of the legwork done prior to an offer. Make the offer and that way you won't lose the red-hot deal. Then use the inspection period in your contract to finish your legwork (pest inspections, home inspections, etc.). If you find something you don't like, you have the inspection period and the contingencies you have negotiated to fall back on. At this point you can either renegotiate based on what you found or you can walk away from the deal based on the contingencies. If the deal is as good as it looks, you are first in line and already under contract.

In order to be successful in buying and selling real estate you must have a good agent that you trust so choose wisely.

If you have a real estate agent and these options have not been explained, then you should be asking lots of questions. If you are thinking of entering into a real estate transaction, then the relationship you build with your agent is very important.

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