Time to Buy?

 

It’s time to buy?

Wait a minute – isn’t that what everyone was saying in 2003, 2005, 2012 and so on? Actually, isn’t that what we’re supposed to be telling our buyers all the time?

After all, that’s how Realtors® make a living. If you ask a real estate agent, it’s always the right time to buy.
But what’s the point here?

 

Many of us believe that saying now is the right time to buy is something to avoid. In fact, if you hear an agent or a company using this as a slogan, ask them if they have ever suggested not buying. What were these agents telling buyers in 2005? What’s different today?

I have learned that the time to buy is different for everyone. You should never invest in real estate because you’re afraid you might miss out. Your real estate purchase should be a long-term goal, unless you are prepared to deal with the fallout if the market bottoms out again. One example would be an investor or builder who’s comfortable building spec homes one at a time because this approach fits his comfort level. He has been doing this a long time and he knows he can sell at cost or rent the home out if things go south. His life does not change if the property does not sell. He remains comfortable no matter what happens.

I always suggest falling in love with the deal not the property. Follow these tips:

• Take your time.
• Don’t ever let an agent make you feel like you are being pushed into a purchase.
• Get a second opinion from a friend who has done well in real estate, or from an appraiser.
• Develop a long-term relationship with your agent (this relationship can be as important as the one you have with your doctor or lawyer).
• Know that the time to buy is when you’re ready, not when you read it in an ad or on the front of a real estate office.

With all that said, how do you know when it’s the right time for you to buy?

How to Know if You’re Ready to Buy a Home

Before you decide that it’s time for you to buy a home, ask yourself:

• Are my finances ready?
• Can I really afford the payments?
• How will I handle issues that pop up, including routine maintenance?

Are My Finances Ready to Buy a Home?

Buying a house isn’t just about making your mortgage payments on time, every time – it’s about saving up the money for a down payment, having enough money to pay for closing costs, being financially prepared to pay for taxes, homeowners insurance and HOA dues, and keeping a fund ready for maintenance and emergency repairs.

When it comes to the down payment, you don’t need 20 percent of a home’s purchase price. There are some loan programs that allow you to borrow with as little as 3.5 percent down, provided your credit is up to par, and even those that allow you to put nothing down (like VA loans). That doesn’t mean you should buy with a low down payment, though – the less money you put down now, the higher your monthly mortgage payments will be.

You also need to have money for:

• Closing costs, which are typically between 2 and 5 percent of the home’s sales price
• Taxes, which may be held in escrow and payable with your monthly mortgage payments
• Homeowners insurance, which can also be held in escrow and payable with your monthly mortgage payments
• HOA dues, if you’re moving into a 30A community that requires HOA membership
• Maintenance and emergency repairs, which can be surprise costs (experts suggest that you save up 6 months of living expenses as an emergency fund)

Aside from saving money, you have to make sure your credit score is high enough to get the most favorable rates and terms from lenders. Even a few points can mean thousands of dollars over time.

Can I Really Afford the Payments?

How much house can you afford? Lenders look at your debt-to-income ratio to determine how much you can borrow to buy a home, but reasonably, what fits within your household budget? If you’re having a tough time making ends meet as a renter, and your projected mortgage payment will be about the same as what you’re paying in rent now, you’re going to have a tough time owning a home, too. In fact, it might be a little harder because as a homeowner, you’re responsible for all maintenance and repairs – and you still have to worry about property taxes, insurance and HOA dues.

How Will I Handle Issues Like Maintenance and Repairs?

You don’t have to be particularly handy to take care of maintenance around the house – but if you’re not, you need to be prepared to hire someone who is. Even if you do fix things yourself, remember that new appliances and materials can get expensive quickly.

Is it Time for You to Buy a Home on 30A?

It doesn’t matter what season it is – if you’re financially, emotionally and psychologically prepared to buy a home, it’s the right time for you.

When you’re ready to explore your options, call us at 850-213-3048 or get in touch with us online. We can help you find your dream home along 30A.