Home > Home Buying > The Cost to Waiting - Should You Buy NOW?

Charles Dailey said there is a cost in waiting in his post, The Cost of Waiting for First Time Home Buyers last week. The government held an awesome buying environment for home buyers through their First Time Home Buyer Tax Credit and later went on to extend the Tax Credit to repeat buyers. The interest rates are in its historical lows for a very long time now and it is predicted that the mortgage interests may not stay as low as it is today.

Lots of bank-owned inventories to select from. Regular sellers are realizing that if that's what they want to do too, they had to price it aggressively.

It's a picture perfect environment for those who are in the buying market. But the bigger question is, Should You?

Just because the market conditions point to a great environment, it doesnt necessarily mean you should.

What I'm saying (in a down, dirty and nasty way) is that Home Ownership comes with Responsibilities. It does not mean if your rent payment equals your mortgage payment - that it is a no-brainer decision to purchase.

There are some groups of people who should NOT take advantage of this buying environment if:

(1) You don't pay rent on time

Have you made late payments on your rent? It is an early indication that you need to look deeper into your finances as to why exactly you do not make rent payments on time.

(2) You do not have a budget

So many times, people live without a budget. The money comes in and the money comes out, nothing really retains in it. Someone who intends to buy a house must have a budget to see if "life" can happen within the budget. I'm constantly appalled to know most homeowners don't have a budget so they cant live on a budget.

(3) Rent Payment Not Equal Mortgage Payment

Just because the mortgage is how much you pay in rent, doesn't mean you are ready for homeownership. It is almost certain that there is a cost to homeownership. When things break down around the house (and it will), you have to fix it. There is no property manager to call and no landlord to foot the bill. You pay for things around the house. Expect about 33% more in expenditure when you own your home. Hence, rent is not equal mortgage.

(4) You constantly relocate

If you are not located permanently in a place, and your history has shown that you tend to move every 2 - 4 years, you should not consider buying. The largest group of people I could think of would be the Military. Often times, military families buy a house at every place they are stationed. Before you know it, they have 3 to 4 rental homes. Now, they say that the economy is not good, it's not easy to sell so they rent it out. Unless your family makes ALOT of income to support ALL these rental homes without counting on the rents from tenant, you probably should not be putting your family's financial health at risk.

(5) Your job does not look promising

You know whether your industry is stable or not and you ought to have somewhat of a good picture if your company is financially stable. Will you lose your job soon? Will you have to move to a new place for new employment? Just because you will still have to live somewhere after you get laid off, doesn't necessarily mean it's okay to buy. Uncertainty wears people out very quickly.

Renting temporarily is NOT a sin. At different stages in life, renting makes sense to many people and sometimes, may be the best decision for them. Renting should not be the way of life for long-term, but it is a very viable choice for many.

Simply because Obama said there is a tax credit carrot dangling in front of our eyes, or the interests are in its historical lows, there are lots of foreclosure properties out there, it is still better to evaluate it based on your OWN comfort level. Homeownership brings emotional, financial and spiritual equations that mathematical and financial numbers can make sense.

So, yes, there is a Cost to Waiting and the cost is good.

PS: I am a real estate agent and I don't make money when others rent. I put food on the table when my clients purchase a home. But I would never feel it's right to jeopardize someone else's livelihood in order to protect mine. I say these to my clients during my initial buyer consultation/ assessment. Then, I know I have done my best to provide them all that I know.

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