Homeownership is not meant for everyone. Being a homeowner is expensive, time-consuming, and involves significantly more responsibilities than renting. However, even people who are wealthy, responsible, and have plenty of free time on their hands might not be ready to become homeowners; there are myriad other considerations that wise consumers must take into account before making the transition from renting to buying!
These considerations are presented below in the form of questions. If you are considering buying a home, we strongly advise that you read and answer every single one of them. Failure to ask yourself these questions now may cause your home purchase to become one giant, expensive mistake in the future!
The RealEstate.com team is invested in making the homebuying process easier for both consumers and real estate agents. This infographic was created to help consumers, but real estate agents can use it too. Feel free to forward this to potential clients who are unsure about whether or not they are ready to take the plunge into the murky pool of homeownership; this real estate infographic is a resource that can help your business!
Are You Ready to Settle Down?
Homebuyers must be ready to commit to living in the same housing unit and city for many years. If being tied down sounds unappealing to you, renting is probably your best option.
How Likely Are You to Stay With Your Job?
Job security is essentially a necessity when it comes to homeownership. Mortgage payments are often considerably more expensive than rent, not to mention the fact that the obligations associated with home loans have a longer time frame than apartment leases.
It is inadvisable to buy a home if you match any of the following descriptions:
- I dread going to work every day.
- My employer is on the brink of bankruptcy – I probably won’t be employed there much longer.
- I might lose my job because I have not been performing up to my company’s standards.
Are You Finished With Your Education?
Continuing your education is always a wise decision … unless you are a homeowner who is primarily responsible for paying off the mortgage. If this description matches you, know that going back to school may jeopardize your ability to make mortgage payments. If you see additional schooling in your feature, especially if you are unsure about where exactly that school will be, it may be best to continue renting for the time being.
Are You Capable of Being Your Own Landlord?
Repairs for renters are as easy as filling out a work order and submitting it to their landlords. Maintaining a home, on the other hand, is far more difficult as it requires homeowners to be their own landlord and ultimately be responsible for performing – and paying for – all repairs.
Not every person is capable of making this transition. Take a single pass through any given housing development and you will see evidence of homeowners who, for whatever reason, are incapable of adequately maintaining their homes, yards, and landscaping.
How Much Money Have You Saved?
Savings are important for potential homeowners in two ways.
First, a high volume of savings is necessary to make the 20 percent minimum down payment that many mortgage lenders require.
Second, having a healthy bank balance after your down payment has been made is recommended. This provides financial security in case your income suddenly drops or expenses increase.
How Strong Is the Local Real Estate Market?
In the wake of the 2008 U.S. housing market collapse, many Americans found the value of their recently-purchased homes fall dramatically. In the space of a couple years, homes that sold for $450,000 would be lucky to receive half that amount if they were put on the market again.
Regardless of how financially secure and ready to settle down you are, it is important to get an assessment of the strength of your local real estate market. If it is likely – or even remotely possible – that the market might take a nosedive in the years following your home purchase, consider renting just a little bit longer.