How Do We Determine If We Have a Motivated Client?

As real estate agents we are expected to help our clients make informed decisions.  When the emotion charged print media headlines and sound bits cheer the declining housing market, critical thinking is often obscured if not completely ignored.  Deciding when to buy a new home is as difficult as deciding when to sell. Here are some telltale signs that it's time (or not time) to buy a new home that we can use to guide our clients to the best decision for them.  And, the answers to these questions will help us better determine whether we have a motivated client or customer.

Signs that it's time to buy now:

1. Your present housing situation is unsuitable- your household has outgrown your home, you want better schools for your children or your job location has changed.
2. You intend to own your next home for at least five year - the longer you own your home, the more likely you will realize a reasonable profit when it's time for you to sell.
3. You can comfortably afford the mortgage payment - personal affordability is a must.
4. You found the right home in the best location for you at this time in your life – the home meets your short-term and long-term needs.
5. Values in the neighborhood you're interested in are relatively stable.  Look at the fundamentals:  How have values fared in the past? How many homes are in foreclosure? How much new construction is taking place? Is the inventory growing? How has this neighborhood performed against the area averages?

Signs that it's NOT time to buy:

1. Your job is in jeopardy or your financial position is volatile - wait until the situation becomes clear.
2. You plan to own your next home for less than five years- the market may not have enough time to appreciate before it's time for you to sell.
3. You have poor credit and little down payment - wait until your financial situation improves.
4. You have owned your current home for less than 2 years – there has been very little equity appreciation in the last couple of years. If you can, wait until the market improves.
5. You own a home in a neighborhood where prices are falling significantly or foreclosures are rampant – you will likely see a greater profit it you wait until the panic stops.

Always remember, a home purchase decision is more about your personal circumstance, than the market. Make sure it's the right time for YOU.