A Daily Non-fat Soy Latte vs Your Own Home...what's to think about?

Real Estate Broker/Owner with Vintage Homes Realty BK3121917

The real estate disaster has dragged on for over 4 years.  We all know that.  What surprises me though is how little some in the buying public have learned or planned for taking advantage of the depressed prices.  I am not talking about someone who was unemployed, I am talking about folks with stable jobs making much more than I was earning 15 years ago when I bought my first home-a major fixer upper.  I regularly receive phone calls from first time buyers eager to buy because prices are so low and it is such a great time to buy.  In some areas here in Tampa it is possible to buy a house for 1990, 1995, or 2000 prices with 2010 wages.  I have seen some properties in my Seminole Heights market priced at what I could not buy a fixer upper for in 1995 and these homes are in move-in condition.

I am amazed at the callers who say they have been watching for the right time to buy and they just love the house they just saw.  I talk with them about getting pre-qualified with a lender and ask if they are looking to buy conventional or FHA.  Like most first-time buyers they ask for explanation and I explain that convention could require as much as 20% down.  They are shocked.  Then I explain FHA would require 3.5% down.  So I get asked how much do I need and I say that depends on the price of the house.  So I give example at 100k ($3500) and 150k ($5250) and I explain there are also closing costs.  That is followed by "how much are closing costs?" I then explain that to depends on the price of the house and the age of the house because of insurance costs.  So I ask how much they have saved.  Too often it is barely $2,000.  That is not enough to buy a 70k home even with closing cost assistance of 3% of the purchase price from the seller

Folks this has been going on for 4 years...if someone had just saved $10 a week they would have that set aside that much over 4 years. At $30 dollars a week one could have $6,200 in 2 years time.  How badly did these potential buyers want to get that house?  Enough to skip a dinner out once a week? Maybe enough to have bought a less expensive car?   For 70 years home values have risen pretty much with out disruption.  For a 100 years cars have depreciated in value from the moment you drove home.  Which is historically the better value?

The same folks who couldn't afford a house in 2005 because of prices still can't buy a home because they have saved next to nothing for down payment.  These are the same folks that won't maintain a home because it requires discipline to save money for when the roof needs to be replaced or the water heater gives out or the house needs to be treated for termites.

Maybe home ownership really isn't for everybody.  Maybe it is easier for them to live with those noisy upstairs neighbors.  Maybe it is easier for them to turn over their paychecks to a landlord.  Maybe it really is important to have that daily latte from a pricey coffee chain.  

But if your one of those who wants to get your first home and you are not a trust fund baby, skipping just a few items a week could have you in a home sooner than you think.

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Re-Blogged 1 time:

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  1. Catherine Ulrey 01/22/2011 04:55 PM
Florida Hillsborough County Tampa
home buying
seminole heights
seminole heights realtor
seminole heights bungalows
tampa bungalows
riverside heights tampa

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Tommy Taylor
Taylor Properties & TexasForSale.net - Kerrville, TX
CNE- Texas Hill Country Realtor

It is truly amazing that EVERYONE can't see the value of owning your own home. For most it is the biggest and best investment they can or will ever make.

Jan 22, 2011 04:19 PM #1
Stacey Smith
Keller Williams Realty - Aliso Viejo, CA
Your Orange County Beach Cities Realtor

That is a great break down of the cost. I had a starbuck addiction last year, had it every day sometimes 2 times a day, but for about a year now I have learned the joy of making my coffee at home and it really does save more money than a cup of coffee should be worth. Homebuyers should really readjust their priorities..

Jan 22, 2011 04:21 PM #2
Shirley Soforic
F. C.Tucker co. - New Palestine, IN

I totally agree.  My husband likes to go to Panera for his morning hazlenut coffe and cream cheese bagle.  He usually spends $7 per day, for those items.  A morning paper might be included, as well as a tip.  Now lets see. That is $7X6= $42 per week.  Average just 50 weeks a year.  Wow. that is $2100 per year if my math is right. We have been making coffee at home, and buying bagles by the Dozen and saving money. 

Jan 22, 2011 04:24 PM #3
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Oh, Rick, you meanie! Bringing tough love into the discussion of home ownership... :)

Jan 22, 2011 04:30 PM #4
Robert Slick
Beach and River Homes - Georgetown, SC

It's the little changes that can make a big difference. Unless the money saved goes to buy a big ticket item on a whim. Consumers need to stay in control.

Jan 22, 2011 04:32 PM #5
Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

So true, zero down days are over!

Jan 22, 2011 04:52 PM #6
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Some of the people never do the math to find out how they could save the amount needed to purchase a home.

Jan 22, 2011 05:06 PM #7
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Great post. The little things ADD up quickly!! 

Jan 24, 2011 05:54 AM #8
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Rick Fifer

Broker/Owner, Vintage Homes Realty
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