The best time to buy a home, finally debunked!

The best time to buy is the day you wake up and decide you no longer want to pay rent to finance someone else’s lifestyle. That being said, I know many have closely held opinions about the market that influence their decision to buy. My top three favorite are below:

The Downing Creek neighborhood in Chapel Hill, NC by Kharmika Alston @livelovedurham

Objection 1: “I need to save up for my down payment.”

Before you decide that you must save up enough money to make a large down payment on your house, I challenge you to ask yourself why. There are a lot of great benefits to putting down a large payment on your purchase, but the benefits don’t apply to everyone.

For example, if you’re a first time home buyer or someone who has not sold a home within the last three years, and aspire to buy a $250,000 house, it might take you awhile to save that desired 20% down payment ($50,000). Before you decide that 100%, 97%, or 95% financing on your home is too little, speak with a mortgage lender about the benefits and drawbacks of a low vs. high down payment and your personal financial goals.

For example, the time you spend saving money may mean you miss out on the historically low interest rates we are experiencing. The interest rate plays a huge role in determining your monthly mortgage payment. A $250,000 monthly mortgage at 4.6% interest vs. 5.6% are vastly different—and yet that is only a 1% difference in the interest rate.

Meanwhile, housing prices will continue to increase as they have done for the last few years. Why not get a piece of the steady appreciation and buy with a low interest rate?!

Objection 2: “Homes currently on the market are overpriced.”

How do you know? Are you a professional appraiser? And if so, have you appraised every home in your desired market? I’m being somewhat facetious because it is true, some parts of the Greater Triangle area in North Carolina are experiencing unprecedented rates of growth and expansion. We’re indeed in year ten of what typically is a five to seven year cycle. Reasonable folks could conclude that eventually this growth is going to come to a halt and then perhaps even reverse itself and prices will go “back to what they’re supposed to be.”

Unfortunately, one person’s opinion of what “prices are supposed to be” does not make the market. The demand for homes and their available supply is the market. While you’re thinking of every reason not to invest, others are moving into the area, finding great deals, negotiating with buyers and sellers, and beginning their wealth-building journey in real time.

A great deal exists in every market. It may take longer, it might be harder to find, but if you are serious, flexible, and diligent, you will find it. A great real estate agent will help you!

Objection 3: “I’m waiting for the next economic downturn.”

Your favorite economist and pundit can provide hot takes on the market every day, but unless they’re a fortune teller, they cannot predict the future, especially not down to the specific market or mini market where you live. Use the information you have now to make good decisions in the near future.

In this moment, things are ever changing.  New companies are coming to the area and established ones are expanding. There are new infrastructure and commercial projects that could completely transform the visibility of the cities we live in. In this moment, mortgage rates are historically low and mortgage lenders are creating flexible financing packages that also include renovating your ideal home or building it.

Get started with a trustworthy team!

Surround yourself with a team of professionals that will provide helpful and timely advice. Real estate agents and loan officers who authentically desire to educate the public are a great start.  A strong real estate agent will assess your motivation to buy, weigh it against your wants and needs for a home, and connect you with a loan officer who can assess your personal financial readiness. If you aren’t ready in this very moment, the loan officer can get you started on a credit building path that can transform your creditworthiness in three to six months.  When you reach the necessary financial goal, the real estate market will be here waiting and ready!