When you see “for sale” signs pop up in your neighbourhood and then see them change to “SOLD” shortly afterward. It’s easy to feel like you’re missing out. But, is buying a home right now a mistake? Do you feel the need to be buying a home? Are you asking yourself all the right questions?
You run the numbers and spend nights scrolling through realtor.ca listings. Then you start to imagine your new life in your dream home. There’s just one thing: you may not be ready to buy a home right now.
While most real estate agents might point to the reason to buy in this hot market. Is this a good reason to start making offers? There are more factors that go into this big life decision. Automatically if an agent assumes it is the right time to buy a home, without knowing your situation, avoid them! They need to know the specifics of your situation before recommending a purchase.
So before going down a long and stressful journey, you will want to go through some scenarios.
You need to get very creative to afford a down payment?
Let’s face it: Saving enough for a 20% down payment on a home can be a daunting challenge. While many financing options allow for lower down payments, these also often come with heavy costs. These costs get added to your mortgage. Also, many times the interest rates are higher. What if the interest rates increase? While you can take a longer-term mortgage! Remember every mortgage borrower will need to qualify for several basis points higher. Which is commonly referred to as the Stress Test. While every homeowner-to-be anticipates making sacrifices to afford their home, you don’t want to be house poor.
In addition, your monthly mortgage payment isn’t the only line item cost in your budget. You will need to be able to afford property taxes, utilities, insurance, internet, water, and maintenance. Remember, there is always a surprise bill or repair you did not budget for!
Your friends are all buying homes and you feel left out.
This is a big one. When everyone else is buying places, it’s easy to judge yourself because you’re not doing the same. However, the grass may seem greener on the other side of that “sold” sign. Your friends may be showing off but not telling you how they’ve cut out vacations for a decade. Or, they may be able to afford it, but they’re not the ones who will be paying your mortgage. Don’t fall for peer pressure if your current place fits your needs right now.
Everyone keeps telling you you’re “throwing money away” on rent.
It’s true that you do build equity after you buy a home. But, it can take years before you see an effect on your net worth. If you need to move, for whatever reason, look at all the costs of trading homes. If you value flexibility more at this stage in your life, then renting might make more sense. There are many ways to build your net worth. Like contributing to a savings account, an RRSP, or other investments.
You have no idea what your current home is worth.
Sometimes the situation is just not in your favor right now. Therefore, consider little changes you can make that can increase the value of the home. Obtain a free and accurate home value report.
You’re focused on the style of the home rather than the lifestyle and the costs of homeownership.
You find yourself looking through the listing photos more often than you look at photos of your family and friends. You’ve mentally re-decorated and decided exactly where you’ll put your sofa. Fun, right? Now imagine waking up at 7 AM on a Saturday to mow the lawn. Then fix the toilet in the master bathroom and find out what’s making that creaking noise in the attic. Or, having to cancel your weekend get-together with friends. Why because your water heater decided to stop working. The repair person can’t get there until later in the week. Not as fun. Home maintenance is an ongoing project filled with unglamorous tasks that you may not be ready for just yet.
Your dream home will significantly add to your commute.
While that extra hour on the road each way may seem worth it to have a garage. It’s likely you’ll feel differently after the novelty of the new home wears off. Though there are always trade-offs with homeownership, one involving location requires a huge life change. Don’t take it lightly or rush into buying. This is also true when it comes to moving to a drastically different kind of area. BTW, you might have to consider a change of school systems.
The very idea of moving makes you panic.
Even if you can afford the down payment, have leftover money for emergencies, are okay with the lifestyle change. You still may not be emotionally ready to buy a new home in a different area. Something to consider: if you’re feeling anxious or overwhelmed or it’s causing conflict with your significant other. Take a timeout. Pick a date in the future to revisit the idea of buying a home, then see how you feel. If your gut says you’re ready, always use the service of a professional agent representative. A good agent will assist you in removing stress by providing you choices and helping you in the decision-making process. ]
While we tried to point out every scenario we could think of…
Your situation may not have been mentioned.
We know everyone has different concerns and personal circumstances.
If you’re unsure if you’re ready to buy or just have questions about what the process will look like for you, we’re ready to walk you through every process whenever the time is right for you!