Working as a Real Estate Agent, I frequently see ads that say things like, YOU ARE THROWING AWAY YOUR MONEY IF YOU RENT! BUY NOW!
The majority of these ads claim that now is the time to buy (always), and that if you don’t purchase a home, you are ultimately throwing away your money and not making a financially savvy decision.
Let me go over a handful of reasons you might not want to buy a home right now.
- It’s a sellers market and you can’t get into a home that is the size, condition, or location that you want. If it is a competitive market, an agent can tell you what it takes to get into the type of home you want, where you want. Whether you are falling short on price, or having enough cash to be competitive in other terms, a trustworthy agent can give you the scoop on what to expect when competing for houses you are wanting to purchase. All of my clients make compromises somewhere, but if you can’t get something even close to what you want, maybe buying right away isn’t in your best interest.
- You are in debt already. If you have any debts that are accumulating and making you feel stressed already, maybe it is in your best interest to pay off some of those debts before you take on a substantial amount of additional debt, like taking out a home loan.
- It is something you are “supposed to do.” I tell people all of the time, what is most important is your reason for purchasing a house. Being ready is important, especially when you buy a home in a hot market. Don’t feel like you have to buy because you are a certain age, all of your friends seem to be buying, or because “it is just what people do”.
- You might have a huge life change soon. Might move in a year? Thinking of growing your family? Maybe now isn’t the best time to buy. At the very least, let your agent know about the possible transitions when you meet with them. That way you can have a plan that takes the unknown into consideration. Can you rent that house out when/if you move in a year and can’t sell? Is the house large enough to accommodate your growing family in the next couple of years? People don’t realize how much it costs to sell their home, so depending on how the market looks a year later compared to the year you bought, you could easily lose money, or barely break even, EVEN IF the market price has increased.
- You have a great rental rate, and are living below your means. If you have a great living situation and are happy living below your means, take advantage of that! Buy when you are ready, and toss away societies expectations that you should always be living large. Save what you can and get yourself in a great position to buy later, if you so choose!