At this point, who isn't telling you to buy a home, people are
saying, rates are low, the housing market's hot, and you got to buy now
before somebody beats you out by.
Let's actually talk about why you shouldn't buy a home.
Here's six reasons that we're going to talk about on why it might not be
good for you to buy a home right now, specifically, depending on your unique
situation, just because you see people on Instagram and Facebook and I get
it, other people doing things that you're like, man, I really want that.
I wish I could do that too, but things aren't working out for me for some reason.
And that's perfectly okay to take a step back, to take a pause.
You know what home, buying's not right for me right now, but I know that if I
wait in the future, I'm going to have much better benefit, by understanding what I
need to work on internally and possibly waiting out the market a little bit.
So here's six reasons why buying a home right now might not make sense.
So number one, you don't know why you're buying.
I see this happen so, so much where, what ends up happening is
there's so much urgency happening in the real estate world.
And we assume that urgency means it's something that's
important and necessary for us.
I'll give you a good example.
There's a lot of times where I talk with buyers and asked, like,
how did you find this house?
How do you know what brought you into wanting to buy a home.
And I hear a story like this often where they say we were looking, we weren't
sure if we were going to buy a house.
So we ended up talking with a realtor and the realtor said, Hey, there's no
harm in going and looking at some houses.
We can go see what you like.
So they go, they see this house and they find out, actually
we really like this home.
And then the realtor says there's five other offers on here.
So if you do like it, if you do want to move forward, we need to put in
an offer sometime tonight, because that's when they're looking at offers.
And so they say we might as well put in an offer and see what happens.
And then all of a sudden they're under contract for a home.
So they went from we're not really sure.
We're just looking right now to now we're under contract.
Okay.
And they didn't know why they're buying in the first place.
And this is where a lot of buyers are more starts to kick in and
where we start to get really unsure about the decisions that we had,
because we weren't sure why we were.
In the first place and other people's urgency, the realtors urgency, the urgency
to put in an offer the urgency in the market because there's so many other
buyers created this false idea that we have to buy a home because those people
very well could have said, you know what?
We think we want to buy a home, but this is too quick for us.
We were not really sure why we want to buy right now.
We haven't solidified that idea.
And so it wouldn't be smart for us to move forward.
Okay.
So what we really need to do is understand why we purchasing in the first place.
For some people we didn't move out of necessity.
The home that we're in, isn't working for some reason, maybe the condition is poor.
Maybe it's too small for our family.
Maybe we need to relocate because of a job.
There's something happening that we need to move.
And then for a lot of other people, Moving is more of a want it's something
that I want to do moving forward.
Maybe it's something that is going to become a need within
a period of a year or two.
But for right now it's more of a.
So we need to actually identify where are we moving in the first place?
Are we looking to change our payment?
If we are moving, how much money are we willing to spend?
What are our non-negotiables, what do we need this home to look like for us
to be able to make a decision on it?
Are we willing to spend more money on a home that's going to fit our needs?
And if so, how much and what are those needs?
Actually look like
What I would recommend is actually take out a piece of paper or take
out a note on your phone, sit down with your family and start to say,
why are we moving in the first place?
Writing that down?
Sounds so simple and pointless that you'll probably not do it in a probably
breeze past it, but having that resolute idea that we can go back to when w
when we're in that spot of, Hey, we need to put an offer right now because
there's five other offers or whatever.
If we can look back to see why are we buying?
We can reframe our decision on, do I actually need that?
Is this urgency that's being presented to me, something that
I need to take ownership of.
And for the most people it's not right.
Your urgency is only going to be dependent on why you need
to move in the first place.
So if I want to move, just because it's something that I want to do,
then I shouldn't feel this urgent need because there's going to be
something else that's going to come up.
Number two would be don't buy.
If you don't have savings.
So home-buying includes lots of expenses.
And unfortunately, a lot of marketing material has been oriented around.
You can buy a home with no money at all right.
There's videos on this channel about buying a home with 0% down, knowing
they're still talking about all the extra costs that are involved with that.
I don't try to misrepresent.
The costs of owning a home in there, but just keep in mind that, realtor's goals
are to, they make money by selling houses lenders make money by selling loans.
And so their job is going to be to find how to get you into a home, to get
you a loan, to be able to sell them.
To you, you're the only one who can control your money and looks out the
best for your own financial situation.
So if you don't have savings, if you're already tight on cash,
buying a home probably is not a good decision for you because if you have
money problems, now, they are not going to get fixed by owning a home.
I promise you.
Okay.
It was like when I was in college, I saw people in relationships and this
exists outside of college too, but it's more concentrated in college.
That's all people in relationships that were not good and not healthy.
And the assumption was if we get married, then everything's going to be better.
And it doesn't work out that way.
You get married and realize, oh, we still have the same crummy
relationship to begin with.
Now we just have a legal contract involved in our crummy relationships.
So that work needed to be done before the marriage happened.
Same thing with our finances that work needs to be done before we
move into these bigger financial decisions moving forward. Also if we aren't
comfortable with all of the expenses.
So sometimes it's, this can scare away people from home ownership and rightly if
you're taking a look at all the expenses involved in buying home and owning a
home and keeping it, and you're saying, that's not for me, then buying a home
isn't for you or, and that's perfectly okay to come to that realization.
This is just too much money for us right now.
So not only do we have to keep in mind our down payment often,
what happens is people stop right here
They just say, yeah, I need to have 3% saved up or 5%.
And then that's it.
They forget the fact that there's also closing costs, right
Sometimes we can get these financed by the seller or some other means, but a lot
of times we're going to be paying money out of pocket for those closing costs.
Also other one-time costs, is it going to cost money for us to move?
Even if we're moving everything on our own, we're still going to have costs
associated with moving all of our stuff.
Whether that just be general travel expenses, depending on how far
we're moving to just rental for.
These are these other one-time costs that we have.
When we get into the home, we most likely want to replace locks.
That's going to be another cost.
Do we need to do painting or general fixing up and things like that.
Also, we're going to have maintenance costs on home, right?
When you rent a, if the AC breaks down, we can call it the landlord
and hopefully they come and fix it sometimes, maybe slower than other.
But we have to actually, if we need to replace something, that's $5,000, we're
the ones who have to pay that money.
Otherwise it doesn't get fixed.
And then also what are our monthly costs?
So too often we rely on these costs that we see as estimates on
something like Zillow or realtor.com, all these home purchase websites.
And we see a number up there and we don't actually know what they're doing.
To factor into those monthly things.
And we just assume, oh, it's just going to be $1,200 a month.
But they were using maybe a 30 year loan with 20% down and super high
credit scores and things like that.
When in reality, we go to qualify and it's actually closer
to maybe 1500 a month for us.
Okay.
So we also have to consider the fact that there are taxes and there's
homeowners, insurance, and taxes, guess what they increase most of the time.
So we have to factor in those as well.
Not only that.
We have to factor in our utility costs.
Is this an older home?
Is it going to cost more for us and utilities?
Is there a general maintenance costs we're going to have monthly for this home?
The answer is most likely.
Yes.
Is there homeowner association fees?
There's all these extra things that can add up.
And if we don't look at the full scope.
That's when we end up making bad decisions.
And the goal here is not to get overwhelmed with
everything that's going on.
The goal really is we want to get a full picture so we can make
a better choice moving forward.
Once we get all the information, we can then start to say, you know what?
Renting in the short-term for us is cheaper.
While we work on all of this other stuff.
Okay.
If you're not comfortable with the market now is not a good time
to buy, we're seeing so much low inventory, meaning there's not a
lot of homes available for sale to compare to how many buyers that are.
So this is making a really difficult market for people where you're putting
in offers on multiple homes and possibly getting beat out by other buyers.
And so if you're not comfortable with this market, it feels
uncertain, especially with COVID.
If you're experiencing a decrease in income or a loss in employment, because
of COVID different things like that.
If you're not comfortable with the volatility that's happening, don't
buy, we don't have to spend extra energy and mental and emotional
power thinking and trying to justify.
We can just simply say, I'm not buying because of X.
And then we set up a game plan so we can get on the other side
of that a little bit better.
Maybe we're not buying because we don't have the savings is
going to cost too much money.
So then we set up a game plan for creating that savings so we can buy
within the next two to three years or whatever that looks like in your timeline.
But if you're not comfortable with market, don't move on.
It. That's perfectly fine.
Another one is if you're going to live in the home for less than.
Two years.
Okay.
We have to keep in mind when by home there's costs
associated with upfront, right?
Closing costs and moving costs and things like that.
Then there's also costs to sell.
Most of the time we're paying for a realtor's commission.
We might be paying transfer taxes, we're paying maybe some
additional fees to a title company.
So if we buy and sell within a period of two years, odds are,
we're probably going to lose some money.
Okay. Now it's not the end of the world.
Buying a home.
Doesn't always have to be, how do we squeeze the most money
out of every decision possible.
It's okay to buy something and not turn a profit on it.
I buy lots of plants.
They make me zero money at all, but I still spend money on them.
Not everything is about how do we extract the most money from things,
especially if it's something that's going to bring us joy and enjoyment.
If we're saying, we know that we're going to be moving within the
next two, maybe three years, then renting might be a better option.
That way we don't have to take on those upfront costs when
we buy and the costs to sell.
And then number six is if you have a lot of debt or worse, a debt and spending
problem, If you have a lot of debt.
And mainly what I'm talking about here is high interest debt.
So things like credit cards or maybe installment loans that have really
high interest payments on them.
We want to get these taken care of before we buy a home, because those
are the things that we're just going to suck the life out of us financially.
And they're going to drain us of money actually on, on paper, right?
Because of how high those interest rates are.
So instead of taking money and spending it on a whole.
It'd be better for us to take that money and spend it to pay
down these high interest things.
Now student loans are more of a personal choice.
Maybe you have a, really a large student loans and you want to tackle those first
or at least get them down to a more reasonable level before you purchase home.
That's perfectly fine.
It's going to be more up to you and what you're comfortable with, but
if you do have a lot of debt
Buying is probably not maybe in the cards for you right now.
And even worse is if you have a debt or a spending problem, if you keep
adding on more and more debt to your life each month, then buying home
is probably not going to be good decision because now you're taking
on a huge amount of debt, right?
Maybe a hundred thousand dollars plus 200,300,000, however, big your loan sizes
on top of the other debt that you have.
And you're getting into this problem where you keep using more and more debt.
No, it's highlighting a budgeting issue that we have here.
And what we probably need to do is maybe stick where we're at, go back to the
drawing board and say, what do I need to do to work on myself and my budget and
start looking at some budgeting resources to help pay down the debt and correct
the spending problem that we might be having.
It's okay to recognize, you know what?
I have a spending problem.
I need to tackle that first, before I take on this huge, additional cost upfront
cost of buying a home, the monthly cost of buying a home, the maintenance costs
and the selling cost of buying home.
We really needed to reign that, that budgeting problem
in before we go into the home.
Because again, it's the same thing with like marriage in a bad relationship.
Us buying a home is not going to mean we'd all of a sudden
know how to use money better.
Okay.
It's only going to more money is going to highlight our money problems.
Okay.
One quick note is if you subscribe to the channel and text hashtag sub to my
number, which is 9 3 7 3 5 8 6 5 4 2.
I'll send you a link to all the freebies that I have in this channel.
So I have things like a guide on seven ways that my clients use to save money.
I have a closing cost estimator.
I have a max purchase price cost estimator in there, tons of different
things and tools that you can use there.
All right.
And then finally, keep in mind, renting is not throwing up.
Though you'll find the people who say that are generally salespeople,
they profit from you buying a house.
Those are the ones who are going to say renting is throwing money away,
putting a roof over your head is always going to have a cost to it.
Okay.
And those were doing some like crazy sort of investing stuff.
Putting a roof over your head is going to have a cost, right?
It's just the nature of being able to say, I am protected from the rain
and hail and snow and everything.
That's coming down on me and having shelter.
It's going to have a cost to it.
That's perfectly fine.
And sometimes a renting is a much better solution for you in the short
term, then purchasing might be right.
If we're talking about that two to three year timeframe, it's perfectly
okay to rent and say, here are the next steps that we need to.
To make sure that into three plus years we're ready to buy and that's going to
be a smart choice for us moving forward, instead of just the choice that other
people pushed on us, because they have their own sense of urgency and they
want to put their urgency on us so that we make a decision that benefits them.
Financially.
Okay.
So if you need to wait, it's perfectly fine.
Just be able to recognize that internalize it that way.
When somebody asks you, why aren't you buying the market's
hot home prices are going up.
Interest rates are low instead of having to go back to the drawing board
in your head and questioning yourself.
You want to be able to go back to some resolute idea that you wrote
down again on a piece of paper and a note, something like that
said I'm not buying because of X.
Here are my steps to make sure I can purchase within
the next X amount of years.
That's going to help alleviate so much stress, frustration, and friction.
When you're talking with people or you hear the news coming out saying
interest rates lowered even more, it's going to help you understand
what you're doing to move forward with the most wise decision possible.
All right.
So if you're on the spot, we're saying, you know what?
None of these apply to me.
I actually am ready to buy a home over here is a step-by-step
plan to purchase a home.
It's gonna walk you through everything from the beginning to the end.
So you can go ahead and start that home purchase.