Four reasons why buying a home might not be the best decision.
Being in the real estate industry, I help people buy and sell houses. However, sometimes I come across people who are looking to buy a home, and after some consideration, we conclude that buying a home just isn’t the right choice for them at that time. Today I’ll share four reasons why you might want to wait to buy a home:
1. Speculation. Some people believe that prices will continue to rise, so by buying now, they’ll be able to sell the home in a few years to make a profit. Many thought the same thing during the last economic downturn, only to watch prices fall apart. That prohibited them from selling the home for profit. If you’re not looking to live in the home unless it can turn you a profit in this market, you probably shouldn’t buy. Speculation can be dangerous.
2. Financial stretch. When you undergo the buying process, your loan officer will tell you that you’re either approved for a loan or not, so it’s best to start there. If you are approved, you’ll also need to think about future expenditures, such as repairs. You don’t want to wind up in a position where you’ve drained your finances to buy a home and can’t afford anything else—that’s called being ‘house poor,’ and it’s not a good situation.
To help you figure out if you’re capable of taking on the expense of being a homeowner, start by setting aside the amount you’d be paying for a mortgage every month in a separate bank account. Then you can assess whether or not you’d feel comfortable making the purchase, and you’ll have a nice little nest egg for when it comes time to buy. If you don’t think you can save that amount each month, then it might not be the time for you to buy.
3. Employment. If you’re not confident in your employment, purchasing a home might not be the best idea. Stable employment is key to securing a loan, after all, and you don’t want your home to become a financial burden for you. You should also hold off on buying if you don’t even plan to stay in the area long- term.
4. You’re unhappy with the market. Right now, there is very little inventory available on the market, so don’t force a purchase just for the sake of buying a home. Don’t buy something you’re not happy with; homeownership is a huge commitment. Granted, you do need to alter your expectations given the market conditions, but you shouldn’t hate the home you buy. It might be a better idea to rent until a home becomes available that you like.
If you’d like to discuss your unique situation to determine whether or not buying a home is the right decision for you, don’t hesitate to reach out to me. I’d love to help you.