Many people come to me and say, “This market is crazy!
Should I be thinking about buying a home?” The answer is yes, you should always
be thinking about buying a home, but the real question is ‘Are you ready?’ The
sad fact of the matter is many people jumped into the market when they weren’t ready
back in the mid-2000’s and unfortunately lost their house because of that. Here’s
a few ways to tell if you are ready to live the American Dream.
Can you afford it?
That seems like an obvious question but the answer is not as
obvious. Buying a house is not just about having that down payment ready. There
are other various costs, such as inspections, closing costs, money for repairs
after purchase, etc. You are fooling yourself if you think you can find a house
with absolutely no repairs needed. Every house needs a little TLC and you have
to be sure you can afford it. I take the Dave Ramsey approach and recommend
having at least 6 months worth of living expenses above and beyond what you
will need for down payment. Also a mortgage really ought to be the only debt on
your plate outside of student loans and maybe an affordable car payment. Being
conservative about your finances can keep you out of trouble. There are quite a
few low down payment loan programs made to benefit home buyers in Denver, Aurora,
among other places, but you still have to make sure you can take on the
Can you handle the responsibility?
Houses are a lot of work! Yard maintenance, plumbing,
electrical, etc. If it wasn’t, Home
Depot would probably be out of business. As a responsible home owner, you have
to be ready to keep up with the necessary maintenance. You are your own
landlord. If the furnace goes out, nobody is going to take care of that for
free. I often recommend first time home buyers consider purchasing a condo or
townhouse first to make sure they can handle it.
How long do you want to stay?
I know a few people who are nomads. They like moving every
couple years and get bored where they are living. These people are probably not
ready to buy a home. Of course, if the plan is to rent out the current home and
then buy something else, that’s a different story. If somebody wants to sell
their home a year after buying it, they may not make money that way. There are
a number of costs associated with selling a home and if the equity/mortgage
principal reduction does not offset those costs, you will have to bring a check
to the closing table. The general rule tends to be 3-5 years before you get to
the breakeven point. Of course, it’s all case by case.
Is EVERYBODY Ready?
Some people can get so caught up in the excitement and
frenzy of purchasing a home that they don’t REALLY know if their significant
other is on the same page as they are. I see it all too often where one person
in a relationship is ready and the other isn’t. What’s said is when
communication breaks down and it doesn’t become clear until they are under
contract or even after they buy the home. Its best to sit down with your significant
other and talk about the pros and cons of buying a home. Otherwise, it could
seriously jeopardize the relationship.
Being a Realtor, I believe in Home Ownership. I see the joy
in people’s faces as the sign the last document and it hits them that they own
a home! On the flip side, I meet with people sometimes who just simply aren’t
ready. I will be the first to tell them. My conscious won’t let me hold it in.
If you think you might be ready but you need someone to discuss all these
factors with, call me today!
Curious what your home is worth? Use
our FREE online valuation tool Click Here! Matthew Koller is part of the Carr Peck &
Associates at Keller Williams. Carr Peck & Associates have been recognized
locally and nationally as experts in real estate. Locally, they are Realtor
Roundtable Recipients with Denver Metro Association of Realtors. Nationally,
they have been recognized by the Wall Street Journal and Real Trends as one of
the top selling agents in America.
Recognized as a top selling team in Denver Metro area. Nationally recognized for homes sold by the Wall Street Journal, Real Trends and Top 5 agent by RIS Media. Our goal is simple and that is to exceed our client's expectations by providing professional service, expert advice and exceptional results.
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"We worked with the team of Jason Peck, Matthew Koller and associates in the sale of our home in Denver and the purchase of the new property in Thornton. Their advise to us on improvements and presentation aided us in an increased value of our home making it possible to purchase a much better home than we expected. The entire team are professional and easy to work with, understanding our needs for the best possible results. We were fortunate to find the best Realtors and we recommend them to anyone selling or buying a home."