Don’t Try to Time the Market
When is the Right Time to Buy?
“Don’t Try to Time the Market,” is one of the oldest phrases in investment, and it also applies to the most common investment most will face at some point in their life or repeatedly: real estate.
Most often, when potential homeowners are asking the standard “when to buy” questions, they’re thinking in larger and far more unpredictable financial terms like the fear of continuous Federal Reserve rate hikes, rising inflation affecting cost of living, or credit APR adjustments. These things have patterns and predictions, but in the end, they’re only projections or guesses. By definition, they’re “unknows.”
The questions you should be asking in your decision-making process are far more personal and predictable, and they provide a firm foundation on which to stand to pull the trigger on buying a house or property.
1. Personal debt: student loans, credit cards, existing payments on cars or other purchase loans, where you are on a scale of buried in debt versus debt-free. This will affect your approval when weighing your income to debt ratio and the amount of a down payment you’re able to save and invest.
2. Down Payment Planning: If you’re thinking your “when” is determined by not being able to save 10-20% of the price of the home, you’ll want to research your current down payment options. Don’t let misconceptions about payment deter you either – you may be able to go as low as 3% down or take advantage of special qualifying loans like VA loan (Veterans Affairs), FHA (Federal Housing Administration), or even zero-down loans like USDA (United Stated Department of Agriculture).
3. Dependable Income: This may sound obvious but a question this easy to address can also boost your confidence in your readiness and in the home buying process. Do you have a dependable income? We all know the future isn’t written in stone, but sensibly, are you gainfully employed and not facing any immediate known risks to your employment? Consider this an easy box ticked and feel how this moves you forward in your journey. Moving on.
4. Reason for Buying: Chances are, if you’re doing your research, then you’re not the kind of buyer who’s making an irresponsibly motivated move for extravagance. But it’s good to check the life transition and progression that got you here. Are you upgrading square footage for family size or making this move as a means of financial investment and equity-building? Seeking a degree of acreage or land acquisition? Are you relocating or looking to change school districts or establish roots in a specific area of town or community? Or in the other direction do you have too much house and you’re looking to downsize and simplify? Whatever your personal or investment-based goal, you want to confirm your decision is a logistic and intentional rather than frivolous or emotional move.
5. You’ve counted the cost: Talk to an expert realtor to learn and evaluate all the related costs that will be included in the homebuying process – property taxes, fees, insurance, inspections, down payment. Not only is this an important part of the basic part of preparation and calculation, but going through this step with a professional will eliminate an entire area of concern and hesitation as you can come out of the conversation confident and informed, knowing you’re well positioned for moving forward.
In any of these steps, when you know what you’re getting into and that you’re able to navigate this journey capably. Your debt is under control, you have a grasp on down payment and are maintaining steady employment, you’ve checked your rational reasons and you’ve counted the cost. If you’ve marked these 5 boxes, odds are you’re ready. Bartlett Real Estate can help you check your math and give you the peace of mind you deserve on your journey home.