Are You Ready to Buy A Home?

By
Real Estate Agent with Keller Williams Realty Diamond Partners Inc
Are You Ready to Buy A Home?

The question may sound simple but the answer is far from simple and the answer may be the most important consideration you will make.

If you simply assume that every prospective buyer is ready to buy a home because they say they are, you run the risk of seeing some of your buyers lose their home to foreclosure.

If you are a prospective home buyer, you should take this question very seriously and make sure you are moving forward with your eyes open and your rational thinking in full gear.

Home ownership can be the pinnacle of stability and self-reliance but the thrill of home ownership can become the agony of foreclosure if the decision is made lightly or ill-advisedly. Personal circumstances can change quickly due to loss of job, medical bills, divorce or other unplanned or unanticipated circumstances.

Anyone considering the purchase of a home, especially first-time buyers, should consider at least the following four dimensions of readiness.

Personal Readiness: The decision to buy a home involves a consideration of the difference between living in an apartment or condo is from living in a single family residence in a subdivision. Are ready to spend weekends or evenings on maintenance or mowing the lawn? Are you settled enough in your job or career that you are not going to be tempted to make spur of the moment decisions to move to another city or state?

Life Style Readiness:Home ownership involves a lot more personal responsibility than apartment living. It may be that your life style has already changed and no longer fits apartment living. That's a positive reason for considering home ownership. If you are single living alone it may not be a problem to be gone from your apartment for a week or two at a time. Very little can go wrong while you are away. However if you are single living alone in a single family residence and you are gone for a week or two at a time you have to think about security, lawn maintenance, etc. The point is that you should consider whether your preferred life style is more suited to renting or buying and factor that into your decision.

Emotional Readiness: Buying a home ranks up there with marriage, the birth of a child, loss of job, and divorce as one of the most stressful experiences anyone will face. Some people handle stress better than others but when it comes to high stress situations, even individuals who normally take change in stride may find it difficult to stay on an even keel. We know that the more change we are facing at any given time, the greater the level of stress we feel. If there are a number of significant changes going on in your life, you might consider working through the other stressors before you take on the search for a home.

Financial Readiness:It happens several times a week. A prospective buyer will call to ask about a home they have seen on the Internet or one they have driven by. I am happy to answer their question about price, number of bedrooms, etc. but I always pose a question of my own. How much can you afford to spend on a house? Are you pre-qualified by a lender? Nine times out of ten they are not prepared to answer either question. Too often they have no money saved for a down payment and have no idea how much the monthly mortgage payment will be for a house in the price range they are considering.

It's really not rocket science to figure out if a buyer is ready financially to buy a home. How much money do you have for a down payment and closing costs? Whatever that number is, divide it by 0.20 and use the answer as the upper limit for the selling price of homes to consider. But don't stop there. The follow-up question is equally critical. How much are you spending each month at present for housing costs including rent, utilities and insurance? Is it ever difficult to come up with the rent on time? If your rent went up by $100 or $200 a month would that be a problem for you? What you are looking for is how much you can spend each month based on your current income for a mortgage payment, taxes, insurance and utilities. Now you will be able to back into an answer to the question, What price home can I afford?

As your Buyer's Agent I will insist that you answer these questions honestly. Don't try to con yourself or pretend that somehow you can pay significantly more for monthly payments plus utilities than you are spending now. You are the one who will pay the price if you take on more house than you can pay for. Don't do it.

John E Cleek, Ph.D., REALTORĀ®

GRI, e-PRO, ABR, SFR, CSP
Crown Realty of Kansas

The Real Estate Professional
Education and Marketing Consultant
Workshops, Seminars, In-House Training
Author of the comprehensive new consumer guide to home buying
Seven Steps to Home Ownership

www.home-buying-made-easy.com

Comments (2)

Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Great points for the home buyer to consider I like the last point make sure you are ready for the additional payments if you decide to take them on. Thanks for sharing.

Apr 27, 2010 06:33 AM
Teral McDowell
Referral Patners LLC - Murphy, TX

All very good points to ponder when considering to buy a new home, John.

Apr 27, 2010 06:33 AM