Buyer's Section
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For home buyers, buying a home will probably rank as one of the biggest personal investments one can make. Being organized and in control will contribute significantly to getting the best home deal possible with the least amount of stress. It’s important to anticipate the steps required to successfully achieve your housing goal and to build a plan of action that gets you there.
Before you can build a plan of action, take the time to lay the groundwork for your decision making process.
First, ask yourself how much you can afford to pay for a home. If you’re not sure on the price range, find a lender and get pre-approved. Pre-approval will let you know how much you can afford, allowing you to look for homes in your price range. Getting pre-approved also helps you to alleviate some of the anxieties that come with home buying. You know exactly what you qualify for and at what rate, you know how large your monthly mortgage payments will be, and you know how much you will have for a down payment. Once you are pre-approved, you avoid the frustration of finding homes that you think are perfect, but are not in your price range.
convenience for all family members
proximity to work, school
crime rate of neighborhood
local transportation
types of homes in neighborhoods, for example, condos, townhomes, co-ops, newly constructed homes etc.
There are also some sellers that you should avoid. Not every seller is as genuinely motivated as they make themselves to be. Some possible hints:
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Finding the Right Seller
The best seller is one who is highly motivated. A highly motivated seller is more likely to sell at a price that is less than his or her house is actually worth. And it matters that you find out why. Learning the reason why can help you get the price you want and help the seller get what they want: a timely sale.
When given the opportunity to meet with sellers, ask them why they are selling. The reason could be anything, such as a job change to a new location or financial problems. If you can solve their problem, whether it is cash related or time-related, do so. For example, if the sellers are highly motivated because they need to move quickly, give them a fast sale – and a lower price. If you can make an offer, even a low one, that gives them cash in a short time, they are more likely to accept.
There are also some sellers that you should avoid. Not every seller is as genuinely motivated as they make themselves to be. Some possible hints:
they stall on having the home appraised or inspected
they are unable to clear up liens against their property
they do not own 100% of their property
they push back the move-out date
they do not have a replacement property or back up plan
etc.
There are also some sellers that you should avoid. Not every seller is as genuinely motivated as they make themselves to be. Some possible hints:
THE FED’S BALANCING ACT
THE FED’S BALANCING ACT: HOUSING SLOWDOWN, INFLATION FEARS, AND RIPPLE EFFECTS IN REAL ESTATE
INTRODUCTION: WHY THIS MATTERS
The housing market is once again at the center of the economic conversation. According to Reuters (Aug 20, 2025) and The Wall Street Journal, the Federal Reserve is walking a tightrope between lowering interest rates to help housing or holding them steady to avoid fueling inflation.
This is not an abstract debate. Already this week, ripple effects have shaken major players tied to housing:
Home Depot reported sales down 4% as homeowners cut back on renovations.
James Hardie Industries saw its stock plunge nearly 30%—its sharpest decline in 50 years—after warning that demand for repairs and new construction in North America is weakening.
So what does this mean for the housing market—and for everyday buyers, sellers, and investors?
THE FED’S ROLE IN HOUSING
The Federal Reserve sets short-term interest rates, which directly influence mortgage rates. When the Fed raises rates, borrowing becomes more expensive. When it cuts rates, borrowing becomes cheaper.
Lower rates = cheaper mortgages, more buyers entering the market, more refinancing, and often more activity in homebuilding.
Higher rates = more expensive mortgages, fewer buyers, slower sales, and builders pulling back.
But the Fed’s job isn’t just about housing—it’s about balancing the entire U.S. economy. And right now, that means juggling two competing forces:
Housing slowdown. Builder confidence has fallen, permits are down, and affordability remains at crisis levels.
AI boom. Investment dollars are flooding into artificial intelligence and tech, creating fears that if rates fall too quickly, the economy could overheat.
This balancing act is what’s keeping rates stuck in the “mid-sixes,” frustrating buyers, sellers, and builders alike.
RIPPLE EFFECT #1: HOME DEPOT
On August 19, 2025, Home Depot announced its summer sales were down 4%. That’s a big deal because Home Depot isn’t just a hardware store—it’s a window into the renovation economy.
When homeowners feel confident, they remodel kitchens, redo bathrooms, add decks, and invest in upgrades. When they’re worried—or when mortgage rates are eating up their budgets—they hold back.
That slowdown shows up in Home Depot’s numbers, and it’s a direct reflection of today’s affordability crisis.
RIPPLE EFFECT #2: JAMES HARDIE INDUSTRIES
Just one day later, Yahoo Finance reported (Aug 20, 2025) that James Hardie Industries—the world’s largest producer of fiber cement siding and a major supplier of building materials—warned about weakening U.S. demand for both repairs and new construction.
The result? Its stock crashed nearly 30%, the sharpest decline since 1973.
This is a red flag because James Hardie supplies builders across North America. When a company like this says demand is slipping, it means builders are either delaying projects or scaling back expectations.
HOW THESE STORIES CONNECT
These two stories—Home Depot’s sales dip and James Hardie’s stock plunge—aren’t random. They’re part of the same chain reaction:
High mortgage rates → buyers hesitate → sellers hold back → builders slow down.
Slower building and fewer renovations → less demand at Home Depot and Lowe’s → weaker orders for James Hardie and other suppliers.
Investor reaction → stocks drop → confidence in housing weakens further.
And looming over all of this is the Fed’s decision. Cut rates, and housing could see relief—but inflation may reignite. Hold rates steady, and housing pain deepens.
WHAT THIS MEANS FOR BUYERS
If you’re a buyer, today’s housing market feels stuck. Rates are still in the mid-sixes, and prices remain high. You might be asking: Is it better to wait, or jump in now?
Here’s what matters:
Inventory is slowly rising, but not enough to tip the market fully into a buyer’s favor.
Builders are offering the highest incentives in five years, including rate buydowns, upgraded features, and even price cuts.
If rates drop, competition could surge. Waiting might mean you face more bidding wars later.
WHAT THIS MEANS FOR SELLERS
For sellers, the challenge is standing out in a cautious market. Buyers want move-in ready homes because they can’t afford big renovations on top of high mortgage payments.
That means:
Homes that are upgraded and priced right still sell quickly.
Homes needing work may linger, or sell only with concessions.
Even “perfect” homes sometimes require seller incentives to move.
WHAT THIS MEANS FOR INVESTORS
For investors, the signals are mixed. On one hand, retail and supplier stocks tied to housing (like Home Depot and James Hardie) are feeling the pain. On the other, demand for rental housing remains strong, and markets outside high-cost cities are still seeing activity.
Investors should watch the Fed closely: a shift in rates could create new opportunities—but also new risks if inflation surges again.
LOCAL ANGLE: LOS ANGELES & BURBANK
Here in the Los Angeles area, the ripple effects are visible:
New apartment buildings are popping up, but rents are still sky-high, leaving affordability unresolved.
Many sellers are hesitant to list, worried they won’t get their price.
Buyers are frustrated—either priced out or facing homes that need upgrades they can’t afford.
The Fed’s decisions in the coming months will directly impact whether L.A. stays frozen—or starts moving again.
CONCLUSION: THE BIG QUESTION
The Fed is at a crossroads. Lower rates could spark housing activity but risk reigniting inflation. Higher rates keep inflation in check but deepen the housing slowdown.
Meanwhile, the ripple effects are undeniable: from Home Depot to James Hardie, to local builders and everyday homeowners.
So what do you think?
👉 Should the Fed cut rates to give housing a boost?
👉 Or keep rates high to protect the broader economy?
Referenced Articles & Sources
Fed’s Dilemma: Housing vs AI
Source: Reuters
Headline: "Fed’s dilemma between AI and housing"
Summary: The Fed is torn between supporting the cooling housing market and not overheating the economy amid surging AI investment.
Home Depot Sales Slow
Source: Reuters
Headline: Home Depot sales down 4% (as part of housing slowdown coverage)
Summary: Indicates weakening homeowner renovation activity.
Yahoo Finance+11Barron's+11Axios+11 (same broad report)
James Hardie Stock Plunges
Source: Yahoo Finance
Headline: "James Hardie shares sink 30%"
Summary: A major building materials company sees its stock fall sharply amid weakening US housing demand.
Housing Starts in July
Source: Reuters
Headline: "U.S. housing starts tick higher in July, led by apartment construction"
Summary: Indicates multifamily construction is up, but overall permits are down.
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Getting a Legitimate Lender and Getting Pre-Approved
It used to be that buyers could go house shopping and when they have found their dream home, then they go to get pre-approved. However, in today’s market, that has proven to be one of the least effective methods of landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based on general questions about your income, debt, assets, and credit history, lenders can estimate how much mortgage you qualify for. However, being pre-qualified and pre-approved are different things. Pre-approval means that you have applied for a mortgage; you have filled out the mortgage application, received your credit report, and verified your employment, assets, etc. When you are pre-approved, you know exactly what the maximum loan amount will be.
A pre-qualified letter is not verified and in essence, does not count for much if you are competing with other buyers who are pre-approved. When you are pre-approved, you and the seller know exactly how much house you can afford. It gives you credibility as an interested buyer and lets the seller know immediately that you will qualify for a loan to buy their property.
In addition to being pre-approved, it’s important to be pre-approved with a legitimate lender. Legitimate lenders include banks, mortgage bankers, credit unions, savings and loan associations, mortgage brokers, and online lenders.
Some lenders to avoid: those who lose a form or misplace a file, those who gather information from you in an unorganized manner, those who are not informed about interest rates, points or costs, and those who cannot provide you with the right information.
Hot, Normal, and Cold Markets
Hot Market
This is an extremely competitive market and is advantageous to the seller. Sometimes, homes will sell as soon as they are listed or even before homes are listed. Typically, during a hot market, multiple offers will be made on each home and more often than not, homes will sell for more than the asking price. It is even more crucial to be prepared and to be ready as a buyer when the market is hot. It can be easy to get caught up in the bid for a home, but if you are prepared (preapproved, solid in price range, realistic about your needs), it is easier to remain focused on your housing needs and price range.
Normal Market
In a normal market, there is a fairly large number of homes available and an average number of buyers. This market does not necessarily favor the buyer or the seller. A seller may not have as many offers on their home, but he or she may not be desperate to sell either. Again, it is the buyer’s responsibility to be prepared. During a normal market, the chances to negotiate are higher than in a hot market. As a buyer, you can expect to make offers at lower than the asking price and negotiate a price at least somewhat less than what the sellers are asking.
Cold Market
In a cold market, houses may be listed for more than a year and the prices of houses listed may drop considerably. This market is advantageous to the buyer. As a buyer, you have the
Importance of Inspection
As a buyer, you are entitled to know exactly what you are getting. Don’t take anything for granted, not even what you see or what the seller or listing broker tells you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one.
An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and get both an oral and written opinion as to its condition.
Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). Not only should you never skip an inspection, but also you should be present with the inspector during the inspection. This gives you a chance to ask questions about the property and get answers that are not biased. In addition, the oral comments are typically more revealing and detailed than what you will find on the written report. Once the inspection is complete, review the inspection report carefully.
time to make an offer that works in your best interest. It is not uncommon to low-ball and to find that sellers are accommodating to meet your needs. Keep in mind that even though this market is a great time for buyers, you do not want to lose your dream home by being unrealistic. Your goal is to get your dream home at the best possible price.
Importance of Inspection
As a buyer, you are entitled to know exactly what you are getting. Don’t take anything for granted, not even what you see or what the seller or listing broker tells you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one.
An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting both an oral and written opinion as to its condition.
Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). Not only should you never skip an inspection, but also you should be present with the inspector during the inspection. This gives you a chance to ask questions about the property and get answers that are not biased. In addition, the oral comments are typically more revealing and detailed than what you will find on the written report. Once the inspection is complete, review the inspection report carefully.
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Use a Buyer’s Broker
It’s important that you choose an experienced broker who is there for you. Your broker should be actively finding you potential homes, keeping you informed of the entire process, negotiating furiously on your behalf, and answering all of your questions with competence and speed.
First, find a broker who represents you and not the seller. This is beneficial during the negotiation process. If you are working with a buyer’s broker, he or she is required not to tell the seller of your top choice. In addition, he or she is also focused on getting you the lowest asking price.
Also, when you use a buyer’s broker, you will see more properties. Not only are they plugged into their Multiple Listing Service, but they are also actively finding homes that are listed as FSBO, or homes that sellers are thinking about listing.
Why You Should Not Make Any Major Credit Purchases
Don’t go on a spending spree using credit if you are thinking about buying a home, or in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.
Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility. For example, a car payment of $300/month could mean that you qualify for $30,000 less in a mortgage.
Even if you have accumulated enough savings, you should consider not making any large purchases until after closing. The last thing you want is to know that you could have purchased a new home had you curbed the urge to spend.
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