Consumer Thoughts on Home Buying
Some of life’s questions are impossible to answer: When is the right time to get married? To become a parent? To change careers? To buy a house?
Buying a house, though scary, doesn’t have to be one of those challenging life questions. Basically, the right time is now. And now. Annnnnnnnd…now.
I know what you’re thinking…
But it’s a seller’s market!
A seller’s market doesn’t mean it’s not a good time to buy. If next year is another seller’s market, you risk your dream house pricing even higher the following year and the year after that. The house you want might also come with a higher interest rate the next year, too.
The key is to buy comfortably. Buying comfortably means you might not get your dream home the first time you dip your toe in the housing pool, but the appreciation you build in that first house will help you build the equity you need for your next house.
I’m still not sure.
Okay, let’s talk this through. Yes, you could wait five years to buy a house that checks all the boxes on your wishlist, wait for a buyer’s market, wait until the interest rate is just right, and wait, and wait. In the meantime, you’ve lost out on the 10% yearly appreciation of the average home. You’ve also continued to send rent money out the door with no tax benefit and no equity toward your next home, so extra money you put in your account is still nowhere close to the five years of equity you could have in a home.
I get it, but I really do need (a three-car garage) or (a pool) or (a fireplace).
While there are probably a lot of buyers who would love a three-car garage or a pool or a fireplace, it’s time to get realistic about what you need instead of what you want. Be cautious of the “HGTV Effect” and impacts of social media. When I bought my first home, I thought I needed an attached garage, but we traded the attached garage for a fenced yard for the dog, and it was the right choice for my family and our Labrador Retriever. In our next home, I was able to get my attached garage and a fenced yard. We had built up enough equity in our first home to make the mortgage on the second house comfortable, which made both me and the dog happy.
You’re right. I’m ready to get into the market.
Good for you! We’re here to help. A good way to start is to have a clear idea of what a comfortable first home and first mortgage means for you. You can do this by setting a maximum purchase price, in case you’re competing against other buyers for a house. Also, be sure you’re clear on what you have to have (a dishwasher) as opposed to what would be nice to have (a jacuzzi tub). The more realistic you are, the more options you will have when you start your search.
Lastly, and most importantly, be open to the advice of your real estate agent. Experienced agents have been through the ups and downs of home shopping with lots of clients, and their job is to help you make the decision that’s right for you.