Nearly 11 million of those who purchased homes in the US before the recent economic downtown when the real estate market was at its peak are still face an unenviable predicament: the pain of being “underwater” owing lenders more than their properties are worth. Between 2005 and 2008, prices of homes are estimated to have come down by over 31%.
For the majority today, buying a home is a decision made once-in-a-lifetime as the investment required is usually huge, coming with a long-term debt liability.
Make sure to carefully consider the purchase. This blog touches on key consideration before stepping into the world of homeownership!
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First: Should You Buy A House?
Whether to buy, rent or seek alternative living quarters comes down to the respective pros and cons. Wrong decisions could create problems in your monthly and trigger financial distress.
Compared to renting, buying a home no doubt comes with the distinct advantage of owning your most valuable life asset. It, however, doesn’t come alone as it entails much more responsibility than renting.
Owning a home comes with many pros and cons, but I will just mention two key ones . . .
Home ownership gives you stability as you live in a set community and neighborhood you associate as your own. It is therefore important to carefully consider the local area before proceeding with purchasing a home if stability is among your goals.
An important feature about owning a house is that in the long haul the value tends to go up. However, the housing market can be volatile over the short period, and you aren’t guaranteed of making money in the initial 5 to 10-yea. More likey, over 30 plus years, the house value substantially increase.
Yes, like most things in life there are two sides to buying a house.
One option to consider when considering buying a home is “lease options”. According to Wikipedia, “A lease option (more formally Lease With the Option to Purchase) is a type of contract used in both residential and commercial real estate. In a lease–option, a property owner and tenant agree that, at the end of a specified rental period for a given property, the renter has the option of purchasing the property.”
The advantages of a lease option is it helps start the ownership process for prospective buyers that can’t currently qualify for a mortgage, purchase price is set forth at the time of entering the lease option, it services as a trial period for the house. Disadvantages include the owner remaining in control of the property and the risk that even at the end of the lease term you won’t be in financial position to acquire the property. Get the details of how it works here. Companies like Rentown.net, Foreclosure.com, and Housinglist.com help identify these properties.
Just like you have pros being a homeowner also comes with several cons . . .
Buying a home results in several financial costs. Upfront costs can be paid out-of-pocket once you accept the purchase offer, others at closing while others are spread out. Homeownership will also entail dealing with lots of recurring costs such as loan repayments, property taxes, home insurance, utilities, maintenance, as well as special costs like moving if necessary and furnishings.
One consideration for covering costs is selling property you already own: this can ease the burden of paying for your new home. Our company, House Heroes LLC, is a home buying expert in Florida, including cities such as Boca Raton, Hialeah, and Miramar. Give us a call at (954) 676-1846 if you’re thinking about selling to go over your options.
Repairs And Maintenance
An advantage of renting your home is that you avoid on-going maintenance costs associated with home-ownership. If you are already stretching your budget to afford that dream home, odds are very high you may not be in a position of covering home annual maintenance costs and repairs.
Other Home Buying Considerations
When Is A Good Time To Buy?
Whether or not 2018 is a good year to buy a house will depends on the market you are targeting.
Where prices are currently stable but expected to increase, it makes financial sense to buy now before they begin to rise again. Even with the US Federal Reserve tweaks like experienced twice in 2017, interest rates for a mortgage on a 30-year fixed-rate will still hover around the figure of 4%. The most important thing is that you shouldn’t rush into buying like you are under pressure.
Figure Out The “Right House” For You
It is perfectly normal to be anxious when seeking to buy a home as there is a concern you could make the wrong decision. There are, however, ways of knowing if you have found the right type of house you want.
For example, within a few seconds of entering, you get a feeling of whether the place is comforting or if it makes you feel warm. Does the house seem to be speaking to you? Is it inviting you to explore further?
If you find yourself defending every flaw you come across or feel they are trivial, you might be onto something here. If the minute you walk into the houses’ master bedroom you immediately begin to envision your bed in a particular corner or setting, this is could be your house. If, for example, you find yourself already imagining your chair by the fireside or the sofa near that particular window, pay attention.
Buying is a very personal decision. Trust your intuition or the gut feeling.
Choosing The Right Neighborhood Counts
Choosing the right neighborhood is as critical as the house itself. The neighborhood needs to be affordable, convenient and safe (hopefully with low crime rates and great schools).
Go online and check the crime rate and consult with local police as they could turn out to be your best source of useful information. Walk around, talk to store owners, check the local amenities and facilities.
If you find yourself driving by the house unnecessarily, showing up whenever there is an open house, lingering too long time during the open house, you are probably already hooked by what you see in the neighborhood and ready to sign the papers.
The Question Is: To Use A Buyer Agent Or Not?
A buyer agent help locate the perfect house and in hard-nosed negotiation. However, an agent is no guarantee of saving money because in some cases, you end up paying less when you do away with the real estate agent’s fees and commissions.
However, buying a home typically requires checking and signing dozens of reports, forms, and other technical kind of documents. A real estate agent helps with such aspects as well as in drawing up agreements and carrying out inspections.
Manage Home Buying Stress
The process of buying a home can turn you into a mental wreck with stress.
With issues like rocketing prices, mortgage interest rates, and an endless list of things to take into consideration, it comes as no big surprise that buying a house is considered more stressful than divorce, bankruptcy, or even bereavement.
Often, saving for the required down payment is the single biggest hurdle faced by aspiring homeowners. Housing advisors recommend that you should set up a well-planned monthly budget that has a regular line items to make sure you can afford for the estimated down payment and monthly mortgage payments. This way, you give yourself enough time to save without having to stress at the last minute.
In Conclusion . . .
Buying a house and perhaps later coming to the realization that it might not be the best one for your needs can not only be highly stressful but comes with some serious financial implications. Because each person has their unique set of requirements, it is important that you carry out proper research.
Prevention is better than the cure. This is true when you want to buy your dream home. Be flexible in what you want without compromising the basics.
We Buy Houses
Call Us (954) 676-1846 or Fill Out This Form For Your FAIR Offer.