Buying V. Renting: What is Better for You?

Home ownership is the American Dream, right? Owning a place to call home, being able to paint the walls purple if you like, that’s what everyone wants. Isn’t it? The reality is there are pros and cons for buying a house. Understanding them can help you make the best decision for your goals.

Pros for Buying

This might seem obvious, but there are 3 main reasons to buy a home.

1. Financial Advantages – A home is an asset which should appreciate over time, providing wealth building opportunities.

2. Pride of Ownership - As a home owner, you control the environment in which you live. If you want those purple walls or granite countertop….you can do it.

3. Roots - Regardless of whether you have children, there is a natural desire to be part of a community: to have a local coffee shop, dry cleaners, bar.

Cons for Buying

As with all things, there are considerations which mean this isn’t the right time to buy a home.

1. Increased Monthly Costs – In some instances your monthly mortgage will be larger than comparable rent. Most of our local markets have comparable rent v. mortgage prices as rentals have increased significantly as inventory is low.

2. Freedom - A renter can move from one city or state to another very easily which allows you to move when you need/want to.

3. Upkeep - You are responsible for the repairs and upkeep of the property. Unexpected problems can become quite expensive if you are unprepared.

There are some wonderful reasons to buy a home; before you decide that it’s time to buy, give some thought to your lifestyle and goals, if they are in line with the advantages of home ownership, then time to go house hunting!

Let’s talk and decide if now is the time to buy. I also help clients who are not quite ready to find a suitable rental.

How to Get Over Losing Out On Your Dream Home

“I’m so sorry, they went with another offer.” It’s a shocking thing to hear; you’ve already moved into that dream home in your mind. It’s common to start second guessing yourself, even condemning yourself for not offering more money or better terms, but the truth is sometimes it just doesn’t work out. The next step is to figure out how to move on.

• Go Ahead and Mourn – It’s perfectly reasonable to mourn the loss of the “perfect” home.

• Take a Break – This might not be as easy as it sounds if you need to move, but even a short weekend off to regroup and refresh will allow you to continue the search.

• Understand What Went Wrong – It may be that you did nothing wrong and the seller got an all-cash offer 20% over asking, but it’s still a good idea to talk with your agent about your offer, make sure you truly offered a fair price with reasonable terms and if not, make adjustments next time.

• List What You Liked About the Home – Make a list of the features you liked about the home – open floor plan, big yard, expansive view, etc. This will allow you to watch for these features as you continue the search.

Losing out on your dream home is sad, but it doesn’t mean you won’t find another home you love just as much. Take some time to think through the experience and keep going – there are so many homes to choose from, you’ll find another home to love.

Did You Remember to Budget for Closing Costs?

Buying a home is one of the largest financial transactions most people make in a lifetime. In addition to saving for the down payment, there are many other costs associated with buying a home; home inspections, appraisals and escrow fees are considered closing costs and are out of pocket costs to both buyers and seller. If you are financing the home, then there are additional lender fees to consider as well.

The Basics of Closing Costs

Closing costs are typically out of pocket costs associated with buying, or selling, a home. Some loan programs will allow you to “finance” most of these costs by adding the cost to the loan balance, but it’s important to remember that the home must still appraise for the additional value and not all programs allow you to do this. It’s better to plan for the extra cost which can range from 3-7% of the home’s purchase price.

Typical Closing Costs

Prior to making an offer, I provide my clients with an estimate of costs. The full list of closing costs involved in your specific transaction while be outlined on a disclosure from your lender. This will be provided once you are under contract. It will disclose costs associated with concluding the transaction. You can expect to see items related to loan fees and costs, appraisal, title insurance and transfer fees, processing and recording fees, hazard insurance and property tax costs among many others.

If you are considering a home purchase, it’s time to speak with a local lender to get a full understanding of the costs associated with buying a home. In this way, you can ensure you have saved what you need to close on your dream home.