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Reasons to Wait on Buying Your First Home

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Real EstateIf you’ve been thinking about buying a home, you’ve probably heard or read, in about a million difference places, that now is a fantastic time to buy a home. Interest rates are absurdly low, with 30-year fixed mortgages well under 4%, inventory is high, and it’s a great time to be a buyer. I don’t, and I don’t think anyone can, dispute any of that. It really is a fantastic time to buy a home, whether it’s your first, second, or fifth house; but before you pull the trigger, I have a few words of advice from a homeowners (we bought seven years ago) for those of you who are looking at buying your first home.

Moving Again Will Be Hard

When we moved into our current home, a 2400 square foot townhouse split across three floors, we were both moving from apartments with far less space. I didn’t have any furniture outside of a bed, a desk, and maybe a bookcase. Moving was a pain but it wasn’t terribly difficult because I didn’t have much stuff.

Seven years later, living in more space, we have a lot more stuff. We have 2400 square feet filled with stuff and when it comes time to move, it’ll be a pain to move it all. We have a couple desks, a couple beds, half a dozen bookcases, two couches, … the list goes on. That doesn’t even count all the stuff in the bookcases, drawers, and cabinets. When you buy your home, you’ll fill it. So before you buy that first home, be sure it’s a place you’ll be living in for a while.

You Lose Flexibility

In addition to just the accumulation of stuff, it’ll be hard to move once you buy because you’ll have to sell, or rent, your home. Selling a home is a time consuming process regardless of the market. You need to prepare your home to be sold, you need to get an agent (or not), put it on the market, negotiate with buyers, prepare the documents, and then sell it. It’s not an easy proposition. It’s not like selling a few shares of stock, it’s kind of a pain. And that’s if you find a buyer immediately!

When you rent, you don’t build equity but you retain mobility. That’s value to that. You can move to go to a different job more easily and go after opportunity without worrying about what you’ll do with the biggest asset you have. You may not build equity but there are other things you can build.

You Don’t Know What You Like

Owning a home is a lot of work and chances are you don’t have a good idea of what you like about a house, unless you have rented a home before. In fact, before you buy a house, I recommend that you spend at least a year renting a house. It’ll give you a better idea of what to expect, without all the hard work. If the water heater breaks, call the landlord and have him fix it!

Just living in a home as an adult (as opposed to when you were a kid) gives you perspective. It helps you understand what might be involved in owning a home and what aspects of the home you’ll truly appreciate. When we bought our home, we liked the idea of the fireplace but it wasn’t something on our list of “must haves.” After using it a few times over our first winter, we now know that we really like a fire place.

Another feature of our home that we didn’t realize we’d like as much was proximity to the local library and the numerous paths near our home. We can go on walks in the woods pretty quickly and easily throughout our neighborhood. We have a lake nearby that is just a mile or so away. We knew we’d like that but we didn’t know how much we’d like it until we lived here.

Don’t Rush Into Anything

Finally, I’m always wary whenever experts all start saying the same thing – now is the best time to buy a home. It might be the best time from a larger economic perspective, and it’s certainly better for realtors :), but it may not be the right time for you. You don’t want to be stretching your budget to buy your house, certainly not now when homes are plentiful and terms are great. It’s not like the rates will skyrocket to 8% in a week. Heck, they won’t skyrocket to 4% in a week. 🙂

So, if you’re itching to buy your first time, consider these reasons to slow down.

(Photo: chrisgriffith)

{ 8 comments, please add your thoughts now! }

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8 Responses to “Reasons to Wait on Buying Your First Home”

  1. There is another reason: the time may not be right. The economy moves in cycles, and house prices, too. The time when we can best afford a house is when times are good: stable job, probably a recent raise or two and terrific financing offers from multiple banks. Good time to buy, right?

    Wrong. Because those are usually the times when house prices are at or near their peak. Much better to keep saving for a better down payment and then, when prices come down (as they always do) go shopping.

    Currently, they say 25% of all home mortgages are under water. That came from bad timing.

    So timing could be a great reason to wait before buying a home…

  2. I think your rationale applies to just about any, especially large, purchase, yes? Just because something is bargain-priced doesn’t mean buying is a good fit for you!

  3. NateUVM says:

    I think, in general, “timing” is just about the worst reason to buy a house. At least one to use as a primary residence, anyway.

    It should be your own personal situation and what you want in life that dictates when and how you decide to purchase a house. Certainly macro-economic factors are going to play a role, but they shouldn’t outweigh what is going on in your life.

  4. The loss of flexibility can be huge for younger people. If you plan on moving up in your company and it normally involves transfers the moving process will get very complicated by adding a house sale or rental into the mix. My dad did this once while in the Navy and we stayed behind 6 months to sell the house.

  5. Jim M says:

    Keep in mind that owning a home is often the best investment anyone will make. Even for those who have seen their houses lose value in the recent downturn, their house, asssuming they stick with the program, will likely prove to be a good investment.

    We need to live somewhere. Paying rent does not build equity.

    As long as you are likely to remain in your home for at least 5 years and can financially swing it, Owning a home is likely a very good deal.

  6. David says:

    There is a formula for buying a house. The formula is profits divided by house price. Profit is the money you get from yourself and roommates every year.

  7. Bob says:

    The hardest thing about moving is thinking about it and all that leads up to it. Once the process of packing things up into the moving truck starts it aint that bad. If anything it’s exciting to figure out where in the new place you want to put your stuff!!

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