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Reasons to Wait on Buying Your First Home
Posted By Jim On 08/13/2012 @ 7:30 am In The Home | 8 Comments
If 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.
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.
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.
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.
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 )
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