I am sure that if you have thought about buying a home and asked real estate agents, co-workers, friends and family the question if now is the time to buy, you have heard this response,
"there will never be a better time to buy".
This may or may not be true. In greater Phoenix, Scottsdale, Fountain Hills, Peoria and many other of the surrounding cities of Phoenix, home prices are down more than 20%. In some place more than 30%.
Real Estate Buyers are asking themselves if now is the time to buy. No one has a crystal ball or clear picture of the future. However, one answer to the question of whether or not now is the time to buy a home is "it depends"!
I am not skirting the question. In fact, "it depends" is the only certain answer. What may make sense for you friends, may not be the right reasons for you and your family to buy a home.
In theory, every time there is a buyer , there is a seller. Thus, 2 people simultaneously having the exact opposite outlook. The reason is not opposite long-term outlook on Real Estate; but simply, different wants, needs, desires and financial conditions at that point in time.
Bottom line; each person's individual situation situation is unique.
Ask yourself these 5 questions, ...
so you can decide if now is "Not" the right time to buy real estate.
- Will you be in your current job for at least 3-5 years? - If there is any chance of relocation or job change in the near future, I would not recommend you buy with this potential financial instability.
- Do you see any major family changes, children, divorce or separation in the foreseeable future? children are a large expense and selling a home through a divorce or separation is not an ideal scenario for best results.
- Will a new mortgage test your financial limits? - there is no reason to work so hard to barely pay a mortgage on a home you cannot enjoy.
- Do you have at least 6 months of emergency savings in case of unforeseen financial hardships? Make sure that you have savings should an unforeseen event cause short-term problems in paying your mortgage. Losing your home can be emotionally and financially devastating to families.
- Do you have 10% (20% is better) down payment? - If you cannot get a fixed mortgage payment at a favorable rate, it is likely that you cannot quite be certain enough you will be able to afford your home for more than 3 -5 years.
There are other consideration and questions to ask if you should buy a home. However, it is an important decision. Be prudent and consult with many real estate experts who truly understand your personal and financial snapshot.'
If you are not 100% sure, it probably means you should wait; Remember, there is no last opportunity to buy.
For a list of more important questions you may want to ask prior to buying a home, please contact me directly 480.221.8080
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Copyright © James Wexler, *5 Reasons - Not to Buy a home! *
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale Real Estate needs
james - great headline. You got my attention.
Havent heard many realtors say , at least out loud, that you should not buy a home.
However, this is a very well done article. It says you should consider buying a home now, IF, and only IF, you can answer yes to these 5 important questions!
Barbara - thanks.
you have to write such a headline to get a word in edgewise with all these great active rain bloggers. some getting 100 comments per post. Amazing. anyway, ... I digress....
Just want to tell everyone it is a truly great time to buy. But, not necessarily for everyone!!
James= really good post. And may I put my 2 cents in and say that if you posted to more groups you might be getting more repsonse to your posts. Smaller groups are where I have made some good friends and gotten some great information. There are hundreds. I'm sure you will find some that you will love.
- Addicted to Active Rain
- Agent Mom
- AR Comedy Club
- Christianity and Real Estate
- Club Chaos
- Diary of a Realtor
- Funniest Real Estate Stories
- Georgia Real Estate
- Independent Brokers
- It's Raining DOGS! Dog Lovers Group
- 'JACKED!!!!!
- "Jason Crouch" In Post Titles
- LATE NIGHT - EARLY MORNING AT ACTIVE RAIN
- Listings By Address
- Open House Stories
- PROPERTY LISTINGS ONLY-ACTIVE RAIN
- Real Estate Professionals for John McCain
- REO
- Running a Brokerage
- The Lounge at Active Rain
- Things to Do/Places to Visit
- Vacation and Second homes
- Walking By Faith In The Rain!
- "Whacked"!!!
This is a list of my groups. Check out some of them and see what great stuff you might find.
My wise old grandmother taught me #4 when I was 10 years old. I can count on both hands the number of other people who have recommended having such a savings account.
Perhaps if we could get our governments, corporations, banks, etc., to open a savings account and keep a six-month reserve.... Hmmmmmmmmmmmm.
Tammy - thanks for the 2 cents. Though, this advice is worth a whole lot more. I really didnt understand the value of the groups. I will check out those you recommend and will join today and start posting. Thanks for passing on you knowledge
Russell - what an interesting concept.
The goverment , or large financial institutions investing, saving, borrowing money in the exact same manner individuals are expected to and taught how.
James ,
interesting idea. Why not to buy a house ??? -really good question as it seemed that home buying was right for virtually everyone (with a pulse) and social security # farom 2002-2005.
Home ownerhsip is a big decision and probably a great thing for most people if they have those 5 questtion answered. However, there are those who are defintely not in a position to buy and should stay away.
Jason - I have a stock broker at Morgan Stanley. (with not much money left unfortunately).
I called him recently about investing since the market was down. He asked me some questions about riske tolerance, tiime frames, savings, etc... believe it or not, he told me Not to invest.
I have rarely heard of a realtor (including myself) telling someone they should not buy a home!
james , these are all important questions to ask and good reasons to not buy.
I would have to say, as a mortgage professional, that if you cannot get a fixed rate mortgage then you should , in most cases, not buy.
There are too many factors like economy, job employment , kids, health, etc... that can be unexpected and change your cost of living.
A fixed-rate mortgage is a cost of living fixed in time. Will never adjust up. It is something you can count on versus the unexpected things life has to offer.
James - great post about not buying a home. Our job as professionals is to educate our buyers and look out for their best interest.
Sharon - thanks for the comment.
If real estate agents and mortgage professional who get paid as much , if not more, than doctors and lawyers, etc... and want the same respect as those industries, we need to give the same cold hard facts and honest advice.
We may not make a commission today, but we are building our industry and our personal reputation for tomorrow!!
I read your post from this morning and stumbled on this post. As has been said, not too many realtors tell people they shouldn't buy a house but it is refreshing to finally hear it said through this forum. Tough when it is our jobs to give advice (and hopefully good advice) that may keep us from closing the sale. But the problem was people not saying know - especially lenders that knew better than to qualify people for some of the mortgages that were around just two years ago.
Thanks for letting us know there is always the "NO" option and people can wait until the time is right and they are ready to buy the home they want.
Eric - thanks for taking the time to be candid about the often conflict of interest that we find ourselves.
It is our job to help people to faciliate a transaction. Not to tell them they should or should not buy.
However, there are some pointed questions we must put before buyers and borrowers now that the real estate and mortage market has changed
I am in the lead generation business. (shameless plug). I want you to know that we are producing more leads than any time in history. Poeple want to buy. However, they cannot get access credit.
I understand that was part of the problem. However, its a cathc-22. If we dont get people some credit then we cannot see any growth.
Mr. Market Solutions - no problem on the plug for your business. Hey if you offer a good product , brag about it and let the people decide.
You raise a great point about the Catch-22. We need credit (which we are giving to banks), but if it does not get to the consumers then it does no good to stimulate the economy.
However, we need to make sure that those who get credit can actually afford to repay!