Buying your first home is exciting, but an article in Realtor.com has pointed out that first-time buyers really need to ask themselves a few questions before committing to this major purchase.
The first question posed by the article is quite an interesting one as it asks first-time buyers if they have recently experienced any kind of loss such as a job loss, a breakup or any kind of negative event. After such an event people often feel the need to start afresh and while this can be a healthy attitude, buying a home may not be the new start needed. The article points out that buying property can be stressful and challenging and that it is often better to wait until things settle down.
Another important question is whether there’s a new job on the horizon and if it will still be in the same area. These days the jobs market is much more fluid and people no longer settle in the same job for life. It’s fine to buy a property where there are lots of employment opportunities but if the choice is somewhat limited then it might be necessary to move to change jobs. When buying a home, first-time buyers need to plan on staying there for at least five years as otherwise, you could end up out of pocket.
Then there are the unexpected costs of buying a home as for example a home inspection will cost several hundred dollars and closing costs could add up to as much as 7% of the total cost of the home. Once the home is yours, there’s the cost of its upkeep and often things can and do go wrong quite soon after moving in. The article suggests having a separate emergency account to cover these kinds of expenses and that if it isn’t possible, it may be better to wait until you have an emergency fund set up.
Finally, it’s important to work out if it’s truly cheaper to buy in the longer term. People who live in an area where rents are rapidly rising are likely to benefit, but this might not be the case in a more stable rental market.