Tuesday, January 24, 2012 / by Nathan Clark
Should I buy a house?
Maybe the expectation is a one-size-fits-all answer of “Yes,” and I suppose I could point out that with affordable prices and low interest rates, now is a great time for anybody to buy.
But the truth is, there is no one-size-fits-all answer.
Whether it’s a first-time homebuyer, a “move-up” buyer, an investor or a second-home buyer, everybody’s situation truly is different. In many cases, yes, it’s a great move to make, but there are so many factors that make each person’s situation unique, and that’s the case more so today than ever, probably.
What’s dangerous is to assume the opposite – that it’s either a great time to buy for everybody, or that it’s not a good idea for anybody to buy. I think that with all the attention on the housing industry, however, the tendency for people is to make general assumptions.
People hear that it’s become tougher to qualify for financing and assume they can’t. People hear that it takes a larger down payment these days and assume they don’t have it. They assume they can’t sell their current house for the price they want, assume that buying a foreclosure or a short sale is a pain in the you-know-what, or assume that they’re going to have a problem with a home inspection or appraisal.
But people’s incomes and credit scores are different. Their job security is different. Markets are different, and even neighborhoods within the same market are different.
I know a couple who had their home on the market not long ago and panicked when a similar house down the street sold for 20 percent less than what they were asking for theirs. They assumed their house was over-priced. The other home was a foreclosure, though, and theirs wasn’t. They ended up getting close to what they were asking. In this case, two situations on the same street were different.
That’s the landscape of real estate markets these days.
Do deals fall through because there are problems with appraisals or with financing? Yes, but maybe not as often as you think. Is buying a distressed property – a short sale or a bank-owned home, for example – sometimes a long, nerve-wracking process? Sometimes, but there are pretty smooth sales, too. Is it a pain to be landlord once you decide to buy an investment property to increase your income? It certainly doesn’t have to be.
It’s cliché, and obvious, to say “every situation is different,” and it perhaps should go without saying. But the reality is that people are making assumptions, deciding this or that without so much as talking to a professional who knows the market.
You parents, your neighbor, your co-workers – unless they are in the real estate business and around it every day – are not the people to go to for advice, as well-meaning as they may be. The news reports and economic forecasters are not the people to listen to when analyzing YOUR situation. They paint the picture with a broad brush, and markets are now as narrow as they’ve ever been.
It’s possible, of course, for anybody to make predictions. Some are saying home prices will rise this year (an opinion I share), but they are talking about nationwide median prices. In some areas, prices are already on the rise. There are some who predict that interest rates on home loans won’t rise this year, and that’s causing people to wait and see what happens.
Don’t assume the people you are talking to know what’s going to happen. Don’t play the wait-and-see game based on information you’ve heard from people outside the game. Nobody can predict with perfect accuracy what’s going to happen, but there are people in the business, in your area, who do know what’s happening now.
The point is, don’t make assumptions. Your situation truly is different than other people’s. If you have questions about your individual case, a particular home or area you’re looking at – whether it’s buying or selling – don’t hesitate to contact a real estate professional you trust.
A reputable professional will know that every situation is different.