Years ago I had a friend that emailed me full of excitement.
"Jared! We are ready to buy a home! We're pre-approved for $400,000 and here are 5 homes we want to see please."
All 5 homes were right around that $400,000 mark.
Knowing that they had struggled to save enough for a down payment and even though he just got a promotion, I knew they were tight financially.
Not that it's my job to manage friend's finanaces, but I was concerned.
I told them to write a list of wants and needs in a home.
Once I got that list I knew the exact area where you could find homes that fit all of their wants and needs, but it was in the $300,000 range instead.
I found 3-4 homes and emailed the listings over to them.
They loved the homes I sent, and ended up buying a home for around $315,000.
They also thanked me numerous times for calming them down and helping them save a TON of money.
Ultimately it's our client's decision on what they want to buy and spend, but we try to relay the message that if buying a home for X amount is going to put you in a financial bind, really think about it from all angles.
Some ways to avoid becoming "house poor" are to save more money for a bigger down payment or be patient and pay off debt. And of course, don't stretch yourself so thin on a mortgage payment that you can't afford to to anything once you move in.
We've shown several $500,000 + homes that barely had anything furniture in them because the home owners were tapped out after the purchase.
Be smart and realistic when purchasing a home.
My two cents on a Thursday morning...