5 Reasons You Shouldnt Buy A Home This Year
Yap! You read that title Right? 5 Reason’s you shouldn’t buy a Home this year!
Now, I’m sure it’s difficult to think that a real estate broker, who’s success in business is driven by the number of homes sold to deserving clients, is writing about why you shouldn’t buy a home this year. So why would I be writing this? RIGHT?
Well, over the last few months, I’ve listened to people tell me reasons why they shouldn’t buy a home this year, and some of the reason, although personal opinions, just came off as well.. Uninformed (that’s the nice word that we’ll use today) … Please note that I do respect people’s opinions, but they must be fact based, not assumptions. If not, I’m calling you out...Sorry! So, I decided it was a learning opportunity or better yet a “Teachable Moment” as the wise folks would call it! This list, although not the full list of excuses I’ve heard on why you shouldn’t buy a home, is rather…Funny!
Reason 1: Because you absolutely LOVE throwing Money away on Rent!
I get it, nothing makes you feel better than walking down to that office on the first of the month, talking to that office worker that gets on everyone’s nerves, and making a rent payment to the Property Manager, and then saying “Man, I just know that I’m never getting that back”. I get it! You just love that, Right?
Well… Honestly, I don’t get it. But if that’s your thing, then cool. While you’re at it, can you send some my way? Here’s my PayPal info (firstname.lastname@example.org Send all unwanted money here. Since you’re in the giving spirit).
I often hear people say that they can’t afford a mortgage payment. But the reality is, in most places, the amount you spend on RENT is the same as, If not HIGHER than, the amount you would spend on a mortgage payment each month. On many occasions, I’ve saved my client's money by helping them buy a home. Not to mention the Tax benefits they receive as homeowners.
If you’re paying over $1,000 in rent payment every single month, seriously, we should talk! I can help you save a ton of money!
Reason 2: Because you absolutely Hate the idea of building equity in a piece of real property and ultimately increasing your net-worth.
So when I was in college, I learned this pretty cool Net Worth Calculation. Which in its simplest form is:
The value of All Assets – Value of All Liabilities = Your Net worth (i.e. your wealth).
So why does this matter? Well…Go ahead and lean in here closely. You know that Generational thing that is passed down to you from Your Granny’s Granny’s Granny; Ya know. Wealth, which according to Google University is, “an abundance of valuable possessions or money!”. Well, real estate, in its truest form, is the cornerstone of all wealth building in America! And my honest opinion, your first home should be your first real estate investment. And if purchased strategically… at the right time and price, could increase your overall Net-worth. But based on what I’m “hearing”, You’re not into that type of thing! You don’t want to ball out! Like my boys Warren and Bill! (yea Those are the homies) …May be a bit of a stretch, but since you’re not into that type of thing anyway, it’s all good!
Owning real estate is only one of the many ways to increase your net-worth, but it is, in my opinion, one of the easiest ways to do so. With a large number of options for many people, this should be on your radar, like yesterday! Think about it some.
Reason 3: Because you’re so in love with the fact that your roommate continues to leave the dirty dishes in the sink all night, allowing for those outside critters (that we all LOVE so dearly) to intrude on your personal space!
So apparently, the roommate from HELL is your best friend! And you’re cool with the fact that they love a dirty kitchen/restroom/living room/HOUSE!! So much so, that you just want to be BFF roommates forever. And I understand Loyalty and you’re a loyal Person. So having that as a reason, is quite “understandable”. Sure you may save a little money by having a roommate split the rent but here’s an alternative, if you’re into having roommates.
Buy the house… Lease the rooms. This way You can still bring your BFF roommate with you. And even have a little rental income while you’re at it. But if you’re not into increasing your monthly passive income, that’s all good!
In all seriousness, though, if having a roommate is your key to happiness, buy a house and rent the rooms. That’s always an option!
Reason 4: Because You LOVE the idea of paying a MUCH higher price for a home next year (or the year after), So you’re ok with waiting.
I’ve had some close friends that have mentioned to me that home prices are far too high today! And my response to them is, “what do you think prices will look like next year? They’ll be MUCH HIGHER”. And sometimes the rebuttal is, I think I’ll wait and see.
I don’t have a crystal ball, but based on the things happening in the D/FW area, I’m speculating that home prices will continue to rise for the next 3-5 years. But If you LOVE the idea of paying a much higher price for a home next year, then I get that you want to wait.
Medium Home Prices in the past year (DFW area) have increased 25% percent, and will continue to do so. Now, more than ever, is the best time to buy. Simply because buyers will pay more next year. Keep that in mind as you're considering if you want to jump into the market.
Reason 5: Because you read on the internet of things that you need an 800+++ credit score to purchase a home, and you don’t have that yet.
Ooooh, Google University! It’s such a great tool. It’s the answer for All Things, On All Topics, for All People! It gives you the complete and exact answer you look for, with one click of a bottom…SEARCH! Which reminds me of a time that I Asked Google about some chest pains I was having. I clicked search, and lo and behold, the problem was right there. According to Google… I was about to die...Tomorrow! So I get that you love referring to the Internet of Things because it’s ALWAYS RIGHT!!
And from a similar online search tool, you found out that you needed an 800+++ Credit Score to qualify for a home loan anyway. So that’s what’s really holding you back, right?
Welp! I’m here to bring you good news! The internet LIED to you! YES…LIED! FLAT OUT!
The FHA Credit Score requirement is 580, although some lenders have requirements of 640. So! If you’re a part of the 82% of the Population (about 265 MILLION people) that don’t have that number, You’re in LUCK! Having a solid 600 Credit score affords you the opportunity to get a home loan from a reputable lender. And if you have that score (or relatively close to that number), and you’re still renting, we need to have a conversation! Don’t believe everything you read online, because more often than not, it’s only partially true.
So what now??
All in all, If any of these reasons stick out to you, we should have a conversation. Stop by my site at www.scottie-smith.com and drop me a quick chat message! I’m here to help you work through some of these reasons and ultimately help you become a homeowner.
I’m a firm believer that everyone should own real estate because It’s a great feeling to own where you live! And I believe all the readers of this article can, and should, own a home! So What now....
Here's a great place to start your search! Check out this Very Affordable New Home Being Built, the Solar Bungalows Project. Click the photo for more information
Happy House Hunting!
Author: Scottie Smith II
August 23rd 2016
About Scottie: "My goal is simple...To help People. My commitment to help is fueled by my passion to make a differe...