Home Buyers Paralysis

Posted by Steph Kaye on Tuesday, April 1st, 2014 at 1:51pm.

Do I or Don't I?

 

 

You’ve checked out dozens of homes. Your Real Estate Agent is at the point of of total frustration. You are paralyzed, letting one great home after another get away. Why can't you make a decision? Buying a home can be an overwhelming process. There are so many decisions to make making the wrong one could lead you to serious financial consequences. According to Wall Street definitions a  home, is  not a liquid asset or a growth investment. It's your biggest financial debt... as it appreciates, it also needs repairs and maintenance. That is a lot of responsibility to think about and take on.

But, of course you really want to buy a home.  There are plenty of advantages, as well - tax breaks, rising real estate values, a stable environment for the family, to name only a few. So you put aside your worries and keep looking for homes. You just can't find the one that's just right for you.

What is it that is causing the conflict between wanting to buy and being unable to make a decision. The cause may be money.  But what part of the money is stopping you from moving forward? Fear of spending too much?  Fear of Lenders will loan you cash at the highest of your ability to borrow?  Realtors will tell you  that you just are happier in a very “bigger, better” home now, not needing to then have to "trade up and go through the whole process again in a few years.
 
If you've been pre-qualified, you are already looking at bigger, better, more beautiful homes at the top of your range. But something isn't quite right. Even though you may feel that your income is stable, you may be feeling that if you buy in this range, you won't have enough savings for emergencies. Take a step back and make sure your decision makes you feel comfortable financially and personally. Talk to your Realtor and ask her to show you less expensive homes. You can't go wrong buying slightly under your price range. In fact, many financial advisors tell their clients to budget about 25% of their income for housing in order to position them to build saving for investments, home improvements, emergencies and dozens of other reasons. That's almost 6% less than lenders will allow you to borrow.  You'll still have your house, you'll just have more to do other things with.

Many couples purchase homes with the idea that they will have a child, looking for extra space makes sense. But if you are trying to accomplish two big financial goals at the same time - buying a home and adding to your family, then you need to come up with a realistic plan. You need  to prioritize your goals. In what order of importance do you want things to happen? What is most important to you? Starting a family, buying a car, saving for vacation, you have  realize that your mortgage is the largest, and the larger it is the the less money you will have for other events.

Because it is not a liquid asset, real estate is not as volatile as you think. It goes down slowly and rises comparatively slowly. And even when home sales are down, they will come back up again.  No one can predict the future. The only thing you can do is prepare yourself to handle what may happen.
So the concern about money is what fuels indecision - at least when you are paralyzed about buying a home. Thinking through the money issues can help you get moving one direction or the other. It is far better for you to work through a few obstacles than to jump into the largest investment of your life without confidence. If you can work through your fears, get your finances in tip top shape and proceed, you'll find buying a home doesn't have to be a paralyzing decision. In fact, it can be one of the best things you may do in your life.
 
If you are worried about money, then making really large house payments will take the joy out of home ownership, unless you don't mind being house poor. Work to improve your cash flow. Pay your credit cards down and don't incur new debt. Rebudget your expenses and eliminate unnecessary purchases. Don't be influenced by others to live beyond your means. Set your sights on an affordable home, and you may find your dream home.
 

If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you. 

Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Max Broock in Birmingham, Michigan. See what past clients have to say about Stephanie Lang.  Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.

1 Response to "Home Buyers Paralysis"

How to Find the Best Mortgage Rates wrote: [...]Links

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