5 reasons you’re not ready to buy a home

Buying a home is considered to be the American dream. Buying a home however is also not for everyone as it requires careful consideration of planning, a little bit of success, and the right people working for you. Just because you can buy a home doesn’t necessarily mean that you should. Here are five reasons you’re just not ready to buy a home and that’s ok…

1. You’re too emotionally connected to the home. You have to look at real estate at least initially from a non-emotional standpoint. If you lose a few houses because you were bid out by other offers and it’s too much of an emotional rollercoaster, stop the process pull back and rethink your objective. In some markets buying a house has a process associated with it and there’s a cadence to making offers and subsequently getting into a contract. Listen to the advice of your real estate agent and lender.

2. Your expectations are incongruent with market conditions. Let’s say for example housing prices in your area are $700,000 and you have an expectation you’ll be able to buy the $700k home for $600k as your family member or your friend who is a self-proclaimed real estate expert has advised you to do such. This approach has been out of alignment with market conditions since 2008. Generally, offering within about 10% of the purchase price is considered reasonable and acceptable by most real estate professionals and most home sellers would be more willing to take your offer more seriously if it’s within 10% of the list price. Put yourself in the shoes of the seller would you be willing to accept a $100,000 loss?

3. Your expectations in terms of a mortgage payment are too close to the comfort line. Let’s say for example your target payment for a house is $4k a month. Based on the price point you and your real estate agent agreed on the payment comes out at say $4200 a month. At this point, you give up because the extra $200 a month is just beyond your comfort. This is a sign that you should not buy a house and are too close to the red zone. Pull back, pay off debt put more money down work on your income, or change loan programs. In this environment, you must have at least a $300-a-month payment threshold between what your target payment is and what you would be willing to take if it was the right house. If you don’t have a $300 monthly payment buffer you really shouldn’t be buying a home. There are too many variables. What if the property has a homeowner’s association, what if the property happens to be in a flood zone or a highly prone fire area and the insurance is more?

4. You have a glass-half-empty approach as it relates to finding a home and closing on one. Everything about the house is in working order, and you have a good interest rate and cash to close, it’s still not enough for you. In other words, you have an insatiable need. This is a sign you shouldn’t be buying a home right now and you should be more focused on whatever your ultimate goal is. It would be wise to share this information with your real estate agent and lender.

5. You’re unavailable because of your work schedule. Let’s face everyone has a full-time job. You’re busy with work obligations, family obligations, etc. So, where could you find time to look at houses make an offer, go into a contract, and go through the mortgage loan process right? It’s a juggling act. Make it a priority and do what you need to do to be successful. It might mean proactively taking the advice of your lender and real estate agent and surrendering to the fact that your life might be made inconvenient as it relates to buying a home. Putting this big picture you’re inconvenienced for 30-days by providing continual paperwork in the process in exchange for buying a home which could yield you and your family hundreds of thousands of dollars of home equity over time while at the same time giving you a massive tax deduction versus the alternative not wanting to be inconvenienced? If your work schedule is such that you truly are not willing or able to prioritize buying a home; then yes you should wait to buy a home when you can prioritize it in your life as the rewards for doing so will yield you significant financial success.

 

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