Buy Now Or Wait? - How to Time A Home Purchase The Right Way

Certified Mortgage Advisor
NMLS 1701021
April 13, 2021

Nobody wants to overspend for a home

Now, I'm not going to tell you how to time a home purchase by giving a bunch of data and numbers and headlines, and what's happening politically. Because a lot of times this external noise really complicates things a little bit too much, and I think it creates the wrong type of conversation.

When we get confused in buying

Because buying a home or should I say buying a house actually comes down to, is it going to be a home or is it going to be an investment? And so we have this fear of overspending, especially when a market's really hot like this, we see values continuing to increase. And our first thought is I don't want to buy it at the height of the market.

Then everything falls apart. Then I lose all of this value in my home, and I don't want to overspend. And the same time it feels like everything's flying by because I need a home. I want a home, but the ones that I look at keep going pending. Quickly like within hours or I put in an offer and it's getting 10, 20, 30, 40 other offers in they're all over list price. And they have these con contingency waivers and all these things. And so things are flying by I'm afraid of overspending and it just feels like chaos.

Deciding becomes difficult

How in the world am I going to make the right decision? Especially when I feel like I've seen all these headlines and everything going on. So I want to help clarify this timing decision for you outside of just seeing all these headlines and data in numbers.

Why do we spend our money?

So if we jump back a little bit to how we spend money in other areas of our life, if we first look at when we invest, we always have a "why?".  And even if you're not like this big investor that's fine. Even if you talk about your 401k or your IRA, if you're putting money away for retirement and you ask yourself, "why am I doing this?", I'm putting it away because I want it to be an investment for my future. I want to make money on that. So that in the future I have the extra money. Or if you put money into Bitcoin or stocks or you put it into a business, why did you put that money?

Your house is not just an investment

For some reason, when we talk about houses, we've been told that a house has to be an investment. So, often we start viewing the place that we live as this place that we're supposed to be thriving in. We're supposed to have joy and fulfillment in life. We start viewing it as a vehicle only for investing, and we forget that a house has thousands of purposes other than just making money.

As a home vs. as an investment

And so house purchase, when we're looking at a house, it really can serve two primary purposes, either one as a home or as an investment. As a home, it's a place where we sleep at night, where we want to have safety, where we raise our kids, where we have a yard for our dog to be in our, no yard to ever take care of.

If we look at it as an investment, then we have to remove those comforts, that home. So we really need to be careful in how we're classifying. What is this house going to be for us? Is it going to be a home or is it going to be an investment?

Jesse Mecham from YNAB

Jesse Mecham from YNAB has a fantastic video on this, which I drew a lot of inspiration from. So he sums this up perfectly. According to him, "when you're buying a home where you want your kids to live and you want them to go to school nearby and you want to get to know the neighbors, and you want a nice place to lay your head at night and you want maybe a little bit of yard, or maybe you're done taking care of you or you want no yard, or maybe you want room for chickens, or maybe you wanted to get away from your neighbors' rooster. All those things are wise. And we have to be really careful that we know why we're doing something. And if you're purchasing a home, because you felt like it's time to move, which is exactly what happened to us back several years ago, we didn't have financial reasons to move in, to be frank. We didn't even know why we were moving. Now, years later, we can look back and of course, the tea leaves are crystal clear and you're like, oh yeah, that's why. And it had nothing to do with making money or timing anything. It's a home, not an investment unless you are crystal clear that it is an investment and not your home. Just make sure you know the difference between the two and then be at peace, Sarah and many other people that are like, oh man, I hope I didn't over. You did what you felt was right, and you weren't making a money move. You were making him move for the other 999,000 reasons that we might realize that something is legitimately a good and well-thought, well-founded solid idea."

Know why we need to buy a house

So for most people, a house is a home, not an investment, unless you're crystal clear that it's an investment and not a home. So if that's the case, that's perfectly fine. Life isn't about trying to squeeze every single dollar out of every single thing that we do that creates just a miserable life. And of course, we don't wanna overpay. Of course, we want to save the most amount of money possible, but also, we can value our joy and our comfort in life as well. And if a home is serving that purpose for you, if it's in a great neighborhood, a great location for your kids to go to school, if it's close to the work that you enjoy, if it's a place that helps you thrive as yourself and with your family, then that's a perfect reason to move.

Decisions should be based on what will make you at peace and happy

Be at peace about why you're moving into a new house. Everything does not have to be about squeezing every single dollar, every single analytical and data-driven decision and everything that we do at that point, we start to lose what it means to be human, what it means to enjoy our life. Be crystal clear about your why and have peace when looking at buying a house.

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