Should I rent or should I buy?

Real Estate Agent with Keller Williams Realty Bellevue

When is it actually better to rent than buy?

   I don't know that there is ever a better time to rent than buy however, your credit score, your savings and other requirements to get a mortgage loan will determine if you can buy. This time last year it didn't matter, but today it is much more difficult for those credit challenged people to get a loan. I have run into this a lot lately. If you are also asking this question I recommend contacting an LO (loan officer) you know and trust to see what you qualify for. You will most likely need to have at least 3% down and a decent credit score. If you are in need of a quality LO I have a great one. Troy Westendorf w/Liberty Financial Group. 

  What can you do if you want to buy but don't have enough for a down payment?

  • You can be gifted a down payment. You must let your lender know how much and where it came from. See Troy Westendorf or your mortgage professional for more info. Also see your CPA for tax info.
  • Rent a dirt cheap apartment, room or basement and save every last penny.
  • And for the more adventurous person, hop on the roulette table. Kidding!!!

  OK, you got your credit fixed and have enough money for a down payment. Should you buy now? I will answer that by saying this.... Buy low. Sell high. There are many advantages for buyers now.

  • Inventory is up. Why is this good for buyers? There is a great selection of properties, this gives the buyer power in negotiating for the best deal. 
  • When inventory is up prices generally go down.
  • Sellers of resale homes and new construction are giving many incentives to buy. IE: Buyer bonuses, home warranties, buying down loans for first  and second years of the loan, paying buyers closing costs etc.

   I know many people are thinking, This guy is a Realtor, of course he wants us to buy now. Yes, I would love for everybody to start buying real estate today but think about it, is it better to put money into a landlords pocket or to put that money into your own? I will rephrase that with an "IF" statement. If you were paying $1500 a month for rent for the next 5 years and you decide you want to move. How much money will you get out of that house/apartment? NOTHING, NOTTA, ZILCH!! You would have paid $90K. Even if you were to buy when home prices were at their peak, history shows on average, home values double every 10 years, so in that same 5 years, if (they were average) your homes value would have appreciated approx. 50%.

   Greg R Benson Real Estate Professional serving Bellevue, Redmond, Kirkland, Bothell and surrounding areas

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Richard Sweum
1st Security Bank - Everett, WA

It's a great time to buy!  The only thing I would advise against is having a short timeline if you are going "zero down."  A short timeline for us here in the Puget Sound, is about 2.5-3 years.  Obviously there are exceptions, but what do you think?

Mar 12, 2008 08:41 AM #1
Jeff Fullmer
FM Properties - Idaho Falls, ID
Real Estate Investor/Financier
Great points Greg. You can also add that rates are excellent right now! There are still 100% products out there so even if you don't have a down-payment then you can still qualify possibly.  
Mar 14, 2008 07:47 AM #2
Marie LaVoise, CENTURY 21 Platinum Properties
CENTURY 21 Platinum Properties - Clarksville, TN

Greg- You make some strong points. In our area the VA is still the number one mover. due to the Army Post. I dont think it is all that bad of an idea to have dome money put away and decent credit prior to purchasing a home.

Oct 23, 2008 11:30 AM #3
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Greg R. Benson

Bellevue, Kirkland, WA Real Estate
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