All the confusing information about the economy and housing market has left potential home buyers scratching their heads and wondering, if this is the best of times or the worst of times to buy a home? Recent news reports have shown charts that demonstrate how renting may be significantly less expensive than buying. Others may point to the dangers of further declines in home prices. What’s a buyer to do?
The answer, may seem complicated as a whole, but is actually quite simple for the individual. If you find the home you need at a attractive price that you can afford, buy if you need to buy. What does that mean? It means that those considering the purchase of a new home must make the decision on whether or not buying is a prudent choice for them; and that’s pretty easy to determine. The following questions will help to guide you in the right direction:
● Do you really need to purchase? Is it possible that renting would be a better choice because of job instability or the prospect that you’ll need to move within a short time? Look at the rentals available and compare the costs of renting to that of owning. With apartment vacancies the highest in decades, and with a large number of rental homes in great locations, renting can be a great option for some; and rents are currently extremely attractive.
● Is your employment secure/income stable? Unless you’re relatively certain of your employment prospects in the foreseeable future, buying a home can be a risky endeavor. With downsizing, layoffs, business closures, and a weak economy, many potential buyers have elected to remain out of the market until the recovery begins in earnest.
● Are you reasonably certain you won’t need more space or that you won’t relocate within the next 3 – 5 years? If you anticipate an increase in the size of your family or if there are other reasons you might need to upgrade to a larger home in the near future, you should purchase for that likelihood. If your financial situation doesn’t allow for the larger purchase, postponing may be the better choice.
● Are your finances in order? Do you have a good credit rating (Click HERE for the real sources of FREE credit reports)? Do you have a regular savings program? Lenders will love you if you do, and the savings may help you to qualify for a better rate. And you may need some of those savings for the down payment or other expenses associated with loan closing and moving.
● Can you afford the home you want? Don’t get caught in the trap of straining your budget. Buy what you can comfortably afford (Click HERE for an easy calculation to help you determine how much you should allocate to a home purchase).
● Are you familiar with the local housing market? It’s imperative that you become familiar with the area in which you plan to live. Look at homes on the market; get an understanding of pricing and value; and evaluate drive times to work, schools, and shopping. You should also research the statistics of neighborhoods in which you’re interested (For links to helpful websites, click HERE).
There are some great bargains available for those who would like to purchase a home, but sorting through the maze of inventory and negotiating the best deal requires the help of a professional. I’d recommend recruiting an experienced real estate agent to guide you in your search. They’re familiar with the market, with pricing, with short sales and foreclosures; and can help you avoid making a costly mistake.
Finally, if you have determined that buying is your best choice, the government wants to help you make that purchase with a tax credit that can be as much as $8,000 for qualified buyers (Click HERE for more information).
For more great home buying or selling tips, visit: The Housing Guru
Gosh, it just depends on an individual's needs, and capabilities! Thank you for the post!
Todd & Devona - And that's why they need the advice of a professional Realtor!
John: What you're advocating is common sense ... and we sure could use a heaping dose of that in the present housing market. Simply -- thanks. This is an easy to follow, easy to understand guide for first-time home buyers (or any buyers). Simple. Straightforward. Honest. Informative. Hopefully many read it and follow your advice.
Gene
Gene - Yes, it is simple advice, but critical to making the right decision. Thanks!
John
Great information We should pass all this along to our clients
Joe - Thanks. Glad to share.
John,
Many real estate markets are stabilizing, including ours here in Vegas. So, on that front it might be a good idea to purchase. However, the economy remains skittish and the job market weak, so that may cause many to hesitate, and for a good reason.
John, If people can buy and think long term, now is the time to buy; that's where the sales ability comes into play.
Esko - It's a great time for "some" to purchase, but not necessarily all.
Terry - That's why I keep "harping" on the need to seek the guidance of a professional.
Morning John, Excellent dose of common sense thinking. I guess the question about having a stable job would be the ringer for most buyers !
I agree with your post. People have a strong tendency to over-think themselves into inaction. You're right- if you need to buy a house, buy a house!
great article with alot of great points! hope you have a wonderful weekend!
Bill - And in this market, who knows for certain whether or not their job is stable?
David - Yes, the answer is pretty simple.
In the long run it is best time to buy.
www.atlantamyhome.com
Melissa - Thanks for stopping by!
Just a thought, if the interest rate goes up 1%, you have 10% less buying power. 2 % = 20% less buying power.
This is what Realtors do - guide the client toward what is best for them by pointing out the pros and cons of both choices. Nice article.
Don - There are many considerations in buying; that's why the guidance of a professional is imperative.
Allen - Thanks for your comments.
Every market is different. The lower cost rural markets offer tremendous land, farms, home, business options. It's not hard to see this is the best of times to buy...low rates, great selection, more faith in real estate unlike stock values falling off the earth. I have found our investors do not like stocks anymore..they do not trust the head honchos CEO that are taken with hand cuffs and leg irons in to court, paraded in front of a sea of cameras, microphones. We produced a little, simple video on who we are, why it is a good time to buy. Every broker in the land should.
ME REALTOR Andrew Mooers 207.532.6573
Andrew - It's because of the wide variations in market conditions around the country that buyers need a good Realtor to help them sort through the confusion. It's always a great time for some to buy; and I'm sure your clients appreciate your knowledgeable assistance in helping them make the most prudent decision.
John,
Great Post. Thanks for breaking it down, because a little common sense can go along way to making a good decision.
Thanks for sharing,
Matt Naumann
Matt - Common sense helps us in all our endeavors.
Hi, John. It's really uncharted territory these days, with all the tried-and-true guidelines gone. It really is on a case-by-case basis now, with no "good answer."
Everyone's situation is different so you just have to marshal the facts and make a decision. I like your forward-thinking approach because what might be right today might not be right five years from now.
Leslie - Yes, what is a bargain to one, may not be a prudent choice for another.
Just stopped by to invite you to the ActiveRain Super Bowl Party. Stop by if you get a chance. Geaux Saints!
John, It's the best of time for those who want to and can. But then again, I'd say that any old day.