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First Time Home Buyer: Why should I buy over rent?

Real Estate Agent with Weichert Realtors

by Kevin Monahan

Why should I buy over rent?

Well, I’m glad you asked… And the answer is pretty simple, Buying a home is the biggest and best investment of your life. There are some things you need to watch out for but don’t worry I’ll cover them all.

Simply the money you invest in a home has the best guaranteed return. If you reference the graph you will notice

no matter when you bought in the last hundred or so years your property value always rose. You can choose to invest in the stock market, currency, or anything that you are interested in. But real estate has been proven over the long term to be one of the most stable environments to invest.

[caption id="attachment_11" align="aligncenter" width="300" caption="Markets Across The USA"]Markets Across The USA[/caption]

Now it’s not all perfect in the Real Estate world, there are plenty of mistakes you can make. One thing that most people do is over invest themselves, because of inflated mortgage pre-approvals. I recently had a buyer who was pre-approved for three hundred thousand in a CHFA mortgage. He had been renting for months and knew he could afford a max of fourteen hundred per month, which put him in the two hundred thousand price range. He could have over invested himself spent two thousand a month on a three hundred thousand dollar house and been foreclosed on a year later. This would have ruined his credit and really killed any chance he had for buying a home in the future. He needed to be careful not to over invest himself even in a down market like we have today, and how he has a beautiful home he can afford

The second problem is sitting on a home that you need to sell just to wait for a better market. The main problem I have with people who don’t want to sell in the down market, is housing prices are down! This means even though you are selling low, you are buying low as well. Your investment isn’t being killed because you bought in 2005 for fifty thousand more than you can sell now, simply because you’re going to buy for fifty thousand less on the home you’re buying. If you’re waiting for the market to turn around you could under improve, over improve, or even lose your house because you’re spending too much.

Be careful out there in the First Time Home Buyer market. If your going to buy use a specialist, not every Real Estate Agent knows what your going through as a First Time Home Buyer. Find someone who understands CHFA, HUD and all aspects of the transaction. Now go buy your first home, will ya!

Sue Brimmer
Weicher Realtors Suburban Properties - Salem, CT



You are right on target with homes being an excellent investment.  Opportunity is knocking on home buyers door.  I hope they answer it.


Sue Brimmer

Oct 18, 2008 03:31 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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