“I want to buy a house, but I’m scared. What should I do?” – Susan, Delaware
First, Susan we have to identify what has you scared. There are a lot of options out there for you to “fear” right now.
It could be any collection of …
- you’re a first-time home buyer and the process is new,
- you have been watching the news and have heard how horrible things are,
- one of friends, family, or friends-of-friends has lost their home to foreclosure.
First, let’s get rid of one word in your question – “scared”. I hate that word.
On a recent episode of SportsCenter, author Stephen King said “Fear is the enemy of execution.”
People don’t like to be afraid and will do irrational things when faced with fear. Of course, just saying that isn’t going to alleviate your concerns but I’m hoping that we will now be able to have a good conversation about real estate and the current market.
Okay, Toby so I’m “concerned” about buying a house, What Should I do?
That’s better. I can handle “concerns” that’s what I’m here for.
What does the concern come from? It can’t be from finding a house as most markets are experiencing a near record numbers of homes for sale, and unless you are looking for a $100,000 house in Tartan Fields, you should be able to find a home.
I’m going to assume that you are being relatively reasonable in your home search. That leaves only a handful of reasons to be concerned:
- I’m Going to Be Foreclosed Upon Listening to the media, you’d think that every single home owner in the nation was losing their home. It isn’t true. And while, one family losing their home is one too many it is nature of the industry. There have been hundreds (if not thousands) of news reports and blog posts on the proper way to get a mortgage. Yet, there will still be defaults on home loans that have been made this year.
- REALTORS® & Mortgage Brokers Are Scamming Me Are there bad real estate agents and mortgage professionals? Yes. Of course, but there are also bad doctors, bad nurses, bad lawyers, and bad presidents. You need to do your homework, and learn about the agent you are working with. Trust your gut, if something doesn’t sound right, and you’re being pressed … walk. However, on the other side of the coin, there are real estate and mortgage professionals that are worth their weight in gold. A good one will more than earn their commission and fees in the transaction.
- I Can Buy It Cheaper, Next Year I recently had a client make an offer about 12 percent below list price and said “I can buy it now, or I can buy it in six months at auction.” We negotiated for a week and the deal fell through because the seller received a nearly full-price offer on the house. Pay attention to the buyers that have reduced their prices and look at how they fit into the market area. It might not be a “steal” but it may not be “overvalued” anymore. There are still deals to be had in this market, but you need to be ready to strike and not try to get too much.
Are any of these a reason to not buy a house today? No.
“Fear is the enemy of execution.” Stephen King
They are an excuse for your fear, or your paralysis, and it needs to be conquered. That doesn’t mean you need to buy a house today, but rather that you must look at what is keeping you from buying a house in this market.
There are a couple of acceptable reasons for not buying a house in this market:
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And there are are those that “enjoy” renting — which would mean you need to buy a condo (but that’s another post) — and its benefits, however for the most part it has become the American Dream to own your own piece of the nation’s land.
Am I advocating that everyone run out and buy a house? No. I’m advocating that if you are sitting on the fence about buying a house, this is a great time to start looking. In the Midwest the weather is turning and those that have sat on the market all summer are motivated to move. It’s a buyer’s market and if you wait too long, you could miss the chance.
I recently read an article on the website of the business school at Penn. Univ. where they feel the greatest cause to the current housing slowdown has more to do with consumer confident than it does with a credit crunch or any other media driven factors.
The overwhelming amount of media information has put potential home buyers, who have the acceptable income and credit to own a home, in a state of paralysis. If an individual is in a good financial position to buy a home, then that is the best time to buy. If the home prices at that time happen to be at a low point, and the inventory of homes are high, it’s a wonderful bonus for potential buyers.
Stacey,
I think you’ve hit it on the head. People are “scared” to buy — and we can blame it on the media and how they are scaring everyone but I’ve recently had another conversation with a buyer’s mother (and good personal friend) and she brought up an interesting point.
“Rates are great and the inventory has wonderful homes. But how can you buy when you don’t know if you’ll have a job in six months?”
I wonder if consumer confidence isn’t quite as high as people think. I still think the media is very responsible for the slow-down with so much negative publicity. However, I think there is a confidence issue right now with buyers.
Toby
Yes, I agree. And, I wish I could edit my comments on blogs.
My comment should have reaffirmed your post, consumer confidence IS a great cause to the housing slowdown. This was the point of the article from the Univ. of Penn. site. One of the top real estate investors in the Chicago area felt that greatest factor of the increasing housing inventory has more to do with fear than with any other media hyped circumstances.
I agree with you, I’m sure! Should this possibly be available that will get yuor web blog translated into German? English is my own second language.