Packing up and moving out of our New Jersey home in 2016
During a season when life feels unpredictable, managing a move can bring more questions than ever. When navigating life’s transitions, a big question many people wrestle with is whether it makes more sense to rent or to buy their next house.
Are you ready for more space?! When navigating life’s transitions, a big question many people wrestle with is whether it makes more sense to rent or to buy their next house.
As realtors, we love helping people find the perfect home. There are few moments better than watching someone’s excitement as they sign their name and receive their keys in anticipation of the next big step in their life. It is our honor to support people along their journey to find the right home for their goals, whether it is a small fixer-upper to help them build equity, a large family home to grow into, or a low maintenance house so that they can focus on their passions outside of the home. There’s a right fit for each person, and we love helping people discover that.
One lesson we have learned throughout the years is that it is that the “right house” isn’t only about the house itself. It’s also about the timing. Our current market strongly favors sellers, and it is particularly challenging and emotionally exhausting to lose repeated bidding wars because your wishlist is bigger than your budget. Sometimes the best advice we can give aspiring homeowners is to wait a year or two before taking the leap into homeownership.
Why You May Want to Wait to Buy Your Home
Here are a few reasons we sometimes recommend waiting to buy:
1. Your costs are predictable when you rent. When you rent, you don’t have to worry about the financial costs of a flooded basement, a worn roof, or installing a new heating system. Although you’ll likely be responsible for most of your utilities, your rent is your biggest monthly expense, designed to cover any future costs of your home.
With renting, you don’t need to set aside any sort of cash for a sudden home emergency. If a tree falls through the roof, you don’t need to worry about dealing with the insurance company or a construction crew.
Instead of setting aside money for unexpected repairs, you can predictably set aside money towards the down payment and closing costs on your future home.
2. You aren’t ready for a long-term commitment. There’s no doubt that moving is challenging and stressful whether you’re renting or buying, but it is particularly expensive to move when you have to sell and buy a new home. You’ll face around 5% closing costs as a buyer and close to 10% closing costs as a seller. This means that in order to buy and sell a different $200,000 home, you’d lose a total of $30,000! That’s not a small price to pay to move a couple of miles.
This is why we believe it’s so important to understand your goals and take your time when you’re buying. Selling your house because your lifestyle has changed is one thing, but selling it because the house wasn’t the right fit to begin with is another. If you are going through a major lifestyle change or anticipate change coming soon, it may be best to wait for some dust to settle and rent until you have a clear vision of your long term goals.
3. The market conditions aren’t in your favor. Here is an all too common story we see right now: You’ve done your diligence. You have a great, stable job, and you have been saving for years to buy your first home. You have researched which neighborhoods you like, and you know how much house you can afford. But every time you put an offer in, you’re outbid by other buyers who are taking on unreasonable risks or paying unreasonable amounts of money for the house you want.
While many people, ourselves included, thought the pandemic may lead to a more favorable market for buyers, in the short term what we’re seeing is that current homeowners who were toying with the idea of selling are often staying put. This means inventory is lower than ever, leaving buyers fighting with each other for almost every house that comes on the market. On the flip side, this has been a great time for certain sellers.
4. You’re not sure about your job security. In early 2020, businesses in many industries were enjoying rapid growth. But when the nation-wide quarantine hit in mid-March, folks huddled indoors and businesses slowed down. Some companies have since closed, and others have furloughed or laid-off employees.
If you’re not confident in your job security and income, buying a home could be a risky play. Losing your job while managing a mortgage could push you into foreclosure, allowing the bank to seize your home and sell it to someone else.
Deciding On the Right Option for You and Your Family
We keep a lot of tools in our back pocket to help buyers navigate the challenges of our current market. However, if you have the flexibility, the best option in some cases is to wait. Buying a home is a major financial decision. Taking a little more time means you can weigh all of your options and land at a decision that works for you.
If you need help weighing your options, contact us at theblocks@blocksintheburgh.com or 412.926.7976. We’ll help you gain the perspective necessary to see if buying a home is right for you!
Cheers,
Julie & Ted