First-Time Homeowners — is the Timing Right?

I seldom deal in leases — but if clients of mine have a home to lease, I am happy to help.

Consequently, I have two homes on the market for lease and am getting a sense of the rental market. It's competitive, more so than you might imagine.

In one case, a large 4 bedroom, 2 bath home with 3,200 square feet in Danville (Shadow Creek) is offered for $3,700 a month. It's hard to show, since the current tenants have not yet moved out, and it doesn't show well, since they are trying to move out — yet I have three applications in hand and more calls with each passing hour.

The other lease is a 2 bedroom, 2 bath condo that just sold for $175,000 in Walnut Creek (Pleasant Hill border) and is offered for rent for $1,500. Again, I have multiple applications for the owner to consider — and if they were open to pets, I would have dozens.

In both cases, I get so many calls asking if the owner will consider "a cute small dog," or a "mature, sleepy, well behaved dog," or "a declawed cat." I feel sorry for the pet owners and their pets — the process is so hard for them. I can't imagine living without my dogs, but some of these people have told me "the dog can stay with a relative." I can appreciate what a hard choice that must be.

With the rental market in mind, I understood the logic behind clients of mine that are moving here from Hawaii and have bought a house sight-unseen (pictured). They are a sweet couple: she is a nurse, he is with the Coast Guard. They have been renting in Hawaii and are excited to be buying their first home. They qualify for a VA loan, which is a pretty amazing package: 100 percent financing up to $1 million. They did the math and decided their monthly payments would be less than rent — so why not?

That inspired my theme for yesterday's , where I selected homes that might inspire renters to give their notice. In fact, a couple of the marketing remarks for the homes I selected said things like "you don't have a reason to rent any more!" All of my examples were $300,00 or less. Here's an idea of what that purchase price equates to on a monthly basis for fixed 30 year loans:

- $250,000 purchase price, FHA loan (3.5% down = $8,750), total payment is about $1,800

- $250,000 purchase price, conventional loan (20% down = $50,000), total payment is about $1,330

- $300,000 purchase price, FHA loan (3.5% down = $10,500), total payment is about $2,150

- $300,000 purchase price, conventional loan (20% down = $60,000), total payment is about $1,600

In each case, the total payment includes principle, interest, insurance, taxes, and PMI if applicable. HOA dues, if the property has them, would be additional. Consider also, that if the property is a condo, it may not be approved for an FHA loan.

My clients are particularly lucky to have the VA loan option, since 100 percent financing is pretty special. I am looking forward to their arrival in less than two weeks, and hope they like the house in person as much as they expect to. They are very excited, and look forward to expanding their family to include a dog — something they have been unable to do in their current rental.