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The truth out there is that there are many more who has not much savings to speak off, should they be purchasing?

 In the past, my answer would be a strong NO. Today, my answer would be a MAYBE. Why?

While serving as this realtor, I have many chances to become my client's trusted advisor in one of their biggest purchases ever. I do not take this task lightly and I am very careful in the houses I show them. We normally set up an initial consultation to evaluate their needs.

I serve a large pool of clients with different financial backgrounds. For those who cannot put down payments, I do evaluate their situations and where I am needed (when they ask for advice), I share with them my best home advice - where your home should be a blessing - not something you work hard to make payments for.

Thus, I advocate putting as much down as possible and if there are consumer debts, pay them off first. I truly believe in this philosophy because I feel that this is when you can make your home a blessing to you and your family.

However, I do have a small change of heart about totally paying off ALL the consumer debts. The truth is that people spend and people buy. Be it a jet-ski, vacation, or simply crap, people spend money. So, if they thought that renting is simply an act of throwing money away, then I would say that making that house payment in lieu of having any extra to spend on would be a good idea.
(Note: I still want to advocate that I think this is not the best idea in the world but I cannot or should not judge what people should do with their money.)

What do you think?

 
This post has been included in Texas Real Estate News Collin County, TX Real Estate News Frisco, TX Real Estate News
Post is included in group: 1st Time Buyers
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3 Comments on Home Purchase As A Forced Savings

JAN
09
2008
Localism Sponsor
Absolutely, correct.  I believe the present the soft market presently an opportunity for buyers.  All real estate is cyclical and over the years my clients have made their homes a retirement fund many times over.
4:56pm • #1

This is an excellent example of the paradoxes we face every day in this business.  If we had a crystal ball and could look into the future, it would be very easy to advise people on what to do.  There are some cases where it makes sense for somebody to purchase a home with zero down, and other cases where it doesn't.  All we can do is advise our clients to the best of our ability so that they can make educated decisions about what is in their own best interest.

5:29pm • #2
JAN
10
2008
178,223 Points 5 Featured Posts Outside Blog
Loreena, I agree that the home should be a blessing. It is a shame that in the consumer driven age we live in right now people just want to spend and spend and spend some more. Sometimes people do not realize the value of homeownership, fiscal responsibility, and stewardship.
8:58am • #3

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Loreena Yeo, Realtor®| Frisco TX Community Ambassador (214)783-2210

Frisco, TX

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