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Now is a good time to buy

(ran HL, HS, HC editions)

Question: I've been waiting to buy a home until mortgage interest rates dropped and, as I write, they seem to have declined considerably. When do you think interest rates will hit their bottom? I'm still kicking myself for missing the last interest rate decline over a year ago. _ Phyllis D.

Answer: If you find someone who knows for sure when mortgage interest rates will hit bottom and then start going up, please let us all know. I want to meet that person. As you probably know, most economists are usually wrong in predicting rates, so I don't place much faith in their forecasts.

Today is definitely a great time to buy a home. There is an ample supply of homes for sale in most communities. Prices have not yet escalated, but if mortgage interest rates stay low, increased buyer demand may drive home prices up.

My advice is to buy a home when you find one you like and can afford. Even if you don't hit the absolute bottom of the interest rate cycle, you will be getting a very attractive interest rate today.

Listen to attorney

Question: My home has been listed for sale several months. We finally received an offer but it's about 10 percent below the asking price, which several realty agents agree is right about market value. However, what worries me and my attorney is that the offer is contingent upon the buyer obtaining a new mortgage.

The clause says: "Buyer to pay at least 10 percent cash down payment and obtain a mortgage for the balance of the purchase price on the best terms available at the time of closing settlement." My attorney says this indefinite clause makes the entire contract vague and illusory.

He suggests a counteroffer at a higher sales price and a rewording of the mortgage contingency clause to make it more specific. What do you advise I do? _ Harry A.

Answer: Listen to your smart attorney. I agree fully with him. That indefinite mortgage contingency clause makes the contract unenforceable if a specific performance lawsuit should become necessary.

I realize you don't want to lose this buyer, but I doubt you would have an enforceable contract if you accepted the original offer. Because the offered purchase price is apparently too low for you to accept, since your counteroffer rejects the original offer the counteroffer should also include a more specific mortgage clause.

Robert J. Bruss is a nationally syndicated columnist on real estate. Write to him in care of the Tribune Media Syndicate, c/o the Times, 64 E Concord St., Orlando, FL 32801.

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