So you’re ready to dive head first into the housing market by purchasing your own home. I believe that is a smart move right now, as the prices of homes are finally coming back down to a reasonable level. However, before you hire that real estate agent to find you the perfect house, and before you enlist the aid of a real estate appraiser to research the fair market value in the area you are looking to buy in, and even before you go in search of a reputable mortgage lender who will help you finance your purchase, you should take a few things into consideration.
While it’s true that owning your own piece of real estate means you will no longer have to hand over your monthly rent check to the guy living in the apartment for free next to you, and that you can remodel the inside and redo the outside anyway you see fit-within reason of course, owning your own home comes with a lot of responsibility and it is still a bit of a risk. Once your real estate agent has taken their cut of your closing costs, along with the mortgage lender, and once you have paid the real estate appraiser who gave you a thoroughly researched report about the value of that home, you are left to handle the rest alone.
But, I’m not trying to talk you out of getting into the housing market, because, I believe, that inevitably you can end up making money on real estate that you own. The trick is in knowing when to buy and when to sell. Right now we are headed into a buyer’s market, which means that people buying homes are getting better deals now than they have for several years. But people trying to sell could end up taking a loss. This is very similar to how the stock market works…sell high, buy low. What you have to consider if you are thinking about buying real estate right now is that you will have to be willing to hold on to it for a while if you want to sell it for a profit.
That being said, if you simply want to move yourself and or your family into your own piece of real estate and plan on planting roots, than buying right now may be perfect for you. One word of advice though; with the housing market being in such a free fall right now, you would be doing yourself, and your pocketbook, a huge favor by enlisting the help of some real estate professionals who can do a lot of the research for you. As I said, a real estate appraiser helps ensure you are paying the fair market value for the neighborhoods you are looking at, and a real estate agent can save you a lot of time and hassle by scoping out the best deals in the areas you are interested in living in.
Now, if all that sounds good to you, you are on to the next step. You must consider whether it will cost you more to own than rent. Here’s a good rule of thumb I read in an article at money.cnn.com, “if you pay 35 percent less in rent than you would for owning – including the monthly mortgage, property taxes, and any homeowner’s fees – then it’s smarter to continue renting.” So if after reading this post you still want to head out into the wild blue yonder of the housing market, find yourself a good real estate agent, real estate appraiser and mortgage lender, and buy yourself that house you’ve always dreamed of; or at least the one you can afford before you get the one you’ve always dreamed of.