- Will I live there in 3 years?
- What’s My Real Budget?
- Will I use more than the internet to shop
- More Money Question
Renting has one advantage over buying – mobility. Otherwise you should be buying in most markets, but can you ask yourself if you’d want to be there 2 or 3 years from now. In some real estate markets the average person moves so often they think they may not want to be there. Still even with (Arizona’s) unique growth and sprawl, the rent rates make it an almost given that you should be buying. 3 years is the number that basically helps a home buyer break even with appreciation helping cover the initial costs.
If you’ve been renting it makes sense to buy, but a lot of buyers just see what they can get vs what they can afford. It’s very common to see first time home buyers end up “house poor” where they can’t afford to furnish the home. While quite possibly the worst way to buy all other items, using a monthly budget is ideal for real estate. It’s good to work on this monthly budget before talking to a loan officer for a pre-approval.
Not shopping / interviewing is a (HUGE!!!) mistake that most buyers make (in fact, it is for most. According to an NAR Study, 85% of home buyers and sellers pick the very first agent they talk to). In addition, they often choose the first vendor they interact with, whether that’s a real estate agent, attorney, inspector, the list goes on. It’s so worth it to get good people. The same goes for picking a home.
In addition, many home buyers use sites like Zillow that have one goal. Traffic. They convert this traffic into advertising dollars for real estate agents. It doesn’t matter whether a home sold or that their Zestimate of is off by 20% or even if they are misrepresenting a listing. It’s worth it to use an agent here.
As in “do I have enough money to pay for the cost of purchasing (closing costs, appraisals, inspections)… and do I have enough to actually furnish the home?” Going back to the house poor questions, but basically there is a cost to owning a home and there’s a cost to decorating it. If you’re thinking of buying a home you should consider these costs. That isn’t to scare you but rather prepare you.
If you can answer these questions confidently, then the only other question is where do you want to buy?