Most young people who move out on their own start out by renting, either an apartment or a rental house or condo. And the first time you go out on your own, it is pretty exciting to finally have a place of your own. But after a while, you may come to a point where you are tired of renting. Maybe it’s the fact that you cannot customize your living space, or the rent just went up. Maybe you have unpleasant neighbors or your landlord is not responsive to your complaints. Maybe you just don’t like the impermanence of it, or you feel cramped.
Maybe it’s time to consider buying a home.
At the Legacy Group, we certainly encourage homeownership, not just because we sell homes, but because it is often a sound financial and practical move for you and for your family. It is also an important part of grounding your life, helping you to take a greater interest in the overall well-being of your community. Homeownership can also provide you with an important creative outlet; it can be very satisfying to transform a home so that it is a reflection of your own tastes and priorities.
But before jumping into homeownership, let’s consider whether it is the right thing for you.
Some Questions to Ponder
Whether to rent or buy is a very personal decision, but there are some practical things to think about that can help you determine which is a better option for you,
- Are you planning to live in the area for a while? If you plan to stay in the community – that is, you like the city and state that you live in, and your career is fairly stable in the area – then buying makes sense. But if you are the sort of person who has “itchy feet” or you’re not quite sure you want to make the area your permanent home, renting may make more sense.
- Have you saved up enough funds for a down-payment? There’s no point in considering whether or not to rent or buy if you’re not working towards putting yourself in the financial position of being able to afford a house. Do you have a steady income? Do you have a respectable credit score? Do you have low debt? Buying a house is a significant financial commitment, and you should only consider making that move if you are financially fit.
- Along those lines: do you have job security, so that you can keep making house payments? The question is not just your present job, but whether you have the skills and training to earn a living sufficient to support home ownership, and enough savings put away to maintain payments in the event you are temporarily out of work.
- How is the housing market in your area? There are arguments for buying in all sorts of markets. If it is a down market and you plan on staying in the area, you might have a great opportunity to get into a nice house at a reasonable price. If it is an up market, buying may still be a good option, because your house may appreciate in value very quickly. But determine whether you can truly get the house you want at a price you can afford.
- How much is your rent really taking from you? If you are a young single professional with a good income, unless you are self-disciplined and saving up, your nice rental may be swallowing a lot of cash every month. If your rent is high, ask yourself how investing that cash into a home could benefit you financially.
- What are current mortgage interest rates, and how are they moving? Historically, mortgage interest rates have averaged about 5.5%. That is about where they are now, up from around 2.5% just a few years ago. But thankfully, in many markets, including the areas around Spokane, Washington and Coeur d’Alene, Idaho, housing prices are rising at about 20%. That means buying a home would build your equity stake rather quickly. If purchasing a home builds your wealth, it is a good move.
- Are you ready for the responsibilities of home ownership? When you own your own home, there’s no calling a landlord if the water heater goes out, or the shrubs need to be trimmed. If you aren’t the type of person willing to put some effort into maintaining your home, then renting is a better option. There are options to lighten the responsibilities of home ownership, though. You could invest in a robust home warranty program, or buy a condo or other property in which you bear only some of these responsibilities. Either way, know that home ownership means that you will cover the expenses of repairs and upgrades. This is not necessarily a bad thing: it means you get to decide what color to paint the bedroom and can choose the type of cooktop you want. It’s all yours!
When You Are Ready To Buy, Choose the Right Agent
If you do decide to buy, don’t just surf on the internet looking for properties. In hot housing markets, by the time you find a house you like and contact an agent to represent you, the house will probably be gone. Getting the right real estate agent on board should be one of your first steps.
Real estate agents help you in so many ways. They can work with you to put financing in place so that you know what amount you have to work with, so that when you find what you like, you can make an offer quickly. Agents know the neighborhoods well, and can give you insights that you won’t otherwise by privy to. They have their fingers on the pulse of the market, and can tell you what the outlook is on finding the house you want. Agents often know when something is going to go on the market before it reaches the MLS listings online, giving you an edge over other home-shoppers.
Agents will help you make the right offer – if you need to move higher, for example, or whether you might be able to get a home at a lower price. They will screen out those properties that are not suitable for you so you can save time, and get you in to see homes in person rather than looking at photos online.
When you are ready to start looking for a home in the Spokane, northern Idaho, or western Montana areas, contact one of the professionals at the Legacy Real Estate Group. We’ll make your first-time home-buying dream a reality.