This Is Why You SHOULDN'T Buy A Home (6 Reasons)

Certified Mortgage Advisor
NMLS 1701021
Published 
February 3, 2021

Why not buy a home right now

At this point, who isn't telling you to buy a home, people are saying, rates are low, the housing market's hot, and you got to buy now before somebody beats you out. But let's actually talk about why you shouldn't buy a home. Here are six reasons that we're going to talk about on why it might not be good for you to buy a home right now, specifically, depending on your unique situation, just because you see people on Instagram and Facebook and I get it, other people doing things that you're like, man, I really want that. I wish I could do that too, but things aren't working out for me for some reason. And that's perfectly okay to take a step back, to take a pause. You know what home, buying's not right for me right now, but I know that if I wait in the future, I'm going to have much better benefit, by understanding what I need to work on internally and possibly waiting out the market a little bit.

The six reasons

So here are six reasons why buying a home right now might not make sense.

One: You don't know why you are buying

I see this happen so, so much where, what ends up happening is there's so much urgency happening in the real estate world. And we assume that urgency means it's something that's important and necessary for us.

Don't get in the trap

I'll give you a good example. There's a lot of times where I talk with buyers and asked, like, how did you find this house? How do you know what brought you into wanting to buy a home? And I hear a story like this often where they say we were looking, we weren't sure if we were going to buy a house.

So we ended up talking with a realtor and the realtor said, Hey, there's no harm in going and looking at some houses. We can go see what you like. So they go, they see this house and they find out, actually we really like this home. And then the realtor says there are five other offers on here. So if you do like it, if you do want to move forward, we need to put in an offer sometime tonight, because that's when they're looking at offers.

And so they say we might as well put in an offer and see what happens. And then all of a sudden they're under contract for a home. So they went from "we're not really sure, we're just looking right now" to "now we're under contract". And they didn't know why they're buying in the first place.

And this is where a lot of buyers are more starts to kick in and where we start to get really unsure about the decisions that we had because we weren't sure why we were buying in the first place.

Your own pace and not other peoples urgency

Other people's urgency, the realtors urgency, the urgency to put in an offer the urgency in the market because there's so many other buyers created this false idea that we have to buy a home because those people very well could have said, you know what? We think we want to buy a home, but this is too quick for us. We were not really sure why we want to buy right now. We haven't solidified that idea. And so it wouldn't be smart for us to move forward.

So what we really need to do is understand why we purchasing in the first place. For some people we didn't move out of necessity. The home that we're in, isn't working for some reason, maybe the condition is poor. Maybe it's too small for our family. Maybe we need to relocate because of a job. There's something happening that we need to move. And then for a lot of other people, moving is more of a want it's something that I want to do moving forward.

Maybe it's something that is going to become a need within a period of a year or two. But for right now it's more of a. So we need to actually identify where are we moving in the first place? Are we looking to change our payment? If we are moving, how much money are we willing to spend? What are our non-negotiables, what do we need this home to look like for us to be able to make a decision on it?

Are we willing to spend more money on a home that's going to fit our needs? And if so, how much and what are those needs? Actually, look. What I would recommend is actually take out a piece of paper or take out a note on your phone, sit down with your family and start to say, why are we moving in the first place?

Writing that down? Sounds so simple and pointless that you'll probably not do it in a probable breeze past it, but having that resolute idea that we can go back to when w when we're in that spot of, Hey, we need to put an offer right now because there's five other offers or whatever. If we can look back to see why are we buying?

We can reframe our decision on, do I actually need that? Is this urgency that's being presented to me, something that I need to take ownership of. And for most people, it's not right. Your urgency is only going to be dependent on why you need to move in the first place. So if I want to move, just because it's something that I want to do, then I shouldn't feel this urgent need because there's going to be something else that's going to come up.

Two: Don't buy if you don't have savings

Other people's urgency, the realtor's urgency, the urgency to put in an offer the urgency in the market because there's so many other buyers created this false idea that we have to buy a home because those people very well could have said, you know what? We think we want to buy a home, but this is too quick for us. We were not really sure why we want to buy right now. We haven't solidified that idea. And so it wouldn't be smart for us to move forward.

So what we really need to do is understand why we purchasing in the first place. For some people we didn't move out of necessity. The home that we're in, isn't working for some reason, maybe the condition is poor. Maybe it's too small for our family. Maybe we need to relocate because of a job. There's something happening that we need to move. And then for a lot of other people, moving is more of a want it's something that I want to do moving forward.

Maybe it's something that is going to become a need within a period of a year or two. But for right now it's more of a. So we need to actually identify where are we moving in the first place? Are we looking to change our payment? If we are moving, how much money are we willing to spend? What are our non-negotiables, what do we need this home to look like for us to be able to make a decision on it?

Are we willing to spend more money on a home that's going to fit our needs? And if so, how much and what are those needs? Actually, look. What I would recommend is actually take out a piece of paper or take out a note on your phone, sit down with your family and start to say, why are we moving in the first place?

Writing that down? Sounds so simple and pointless that you'll probably not do it in a probable breeze past it, but having that resolute idea that we can go back to when w when we're in that spot of, Hey, we need to put an offer right now because there's five other offers or whatever. If we can look back to see why are we buying?

We can reframe our decision on, do I actually need that? Is this urgency that's being presented to me, something that I need to take ownership of. And for most people, it's not right. Your urgency is only going to be dependent on why you need to move in the first place. So if I want to move, just because it's something that I want to do, then I shouldn't feel this urgent need because there's going to be something else that's going to come up.

Three: Not comfortable of all the expenses

So sometimes it's, this can scare away people from homeownership and rightly if you're taking a look at all the expenses involved in buying home and owning a home and keeping it, and you're saying, that's not for me, then buying a home isn't for you or, and that's perfectly okay to come to that realization. This is just too much money for us right now.

Down payment

So not only do we have to keep in mind our down payment often, what happens is people stop right? They just say, yeah, I need to have 3% saved up or 5%. And then that's it.

Closing Cost

They forget the fact that there are also closing costs, right? Sometimes we can get these financed by the seller or some other means, but a lot of times we're going to be paying money out of pocket for those closing costs.

Other one-time costs

Is it going to cost money for us to move? Even if we're moving everything on our own, we're still going to have costs associated with moving all of our stuff. Whether that just be general travel expenses, depending on how far we're moving to just rental for.

These are these other one-time costs that we have. When we get into the home, we most likely want to replace locks. That's going to be another cost. Do we need to do painting or general fixing up and things like that.

Maintenance cost

Also, we're going to have maintenance costs on the home, right? When you rent, if the AC breaks down, we can call it the landlord and hopefully they come and fix it sometimes, maybe slower than others.

But we have to actually if we need to replace something, that's $5,000, we're the ones who have to pay that money. Otherwise, it doesn't get fixed.

Monthly cost

So too often we rely on these costs that we see as estimates on something like Zillow or realtor.com, all these home purchase websites.

And we see a number up there and we don't actually know what they're doing. To factor into those monthly things. And we just assume, oh, it's just going to be $1,200 a month. But they were using maybe a 30-year loan with 20% down and super high credit scores and things like that. When in reality, we go to qualify and it's actually closer to maybe 1500 a month for us.

So we also have to consider the fact that there are taxes and there are homeowners, insurance, and taxes, guess what they increase most of the time. So we have to factor in those as well. Not only that. We have to factor in our utility costs. Is this an older home? Is it going to cost more for us and utilities?

Are there general maintenance costs we're going to have monthly for this home? The answer is most likely. Yes. Are there homeowner association fees? There are all these extra things that can add up. And if we don't look at the full scope, that's when we end up making bad decisions. And the goal here is not to get overwhelmed with everything that's going on. The goal really is we want to get a full picture so we can make a better choice moving forward.

Renting is cheaper

Once we get all the information, we can then start to say, you know what? Renting in the short-term for us is cheaper. While we work on all of this other stuff.

Four: Don't buy when you feel you are uncomfortable

If you're not comfortable with the market now is not a good time to buy, we're seeing so much low inventory, meaning there's not a lot of homes available for sale to compare to how many buyers that are. So this is making a really difficult market for people where you're putting in offers on multiple homes and possibly getting beat out by other buyers.

And so if you're not comfortable with this market, it feels uncertain, especially with COVID. If you're experiencing a decrease in income or a loss in employment, because of COVID different things like that. If you're not comfortable with the volatility that's happening, don't buy, we don't have to spend extra energy, mental, and emotional power thinking and trying to justify our decisions. We can just simply say, I'm not buying because of X.

And then we set up a game plan so we can get on the other side of that a little bit better. Maybe we're not buying because we don't have the savings is going to cost too much money. So then we set up a game plan for creating that savings so we can buy within the next two to three years or whatever that looks like in your timeline.

But if you're not comfortable with the market, don't move on it. That's perfectly fine.

Five: Think of long term, not just two years

Another one is if you're going to live in the home for less than two years. We have to keep in mind when by home there are costs associated with upfront, right? Closing costs and moving costs and things like that.

Then there are also costs to sell. Most of the time we're paying for a realtor's commission. We might be paying transfer taxes, we're paying may be some additional fees to a title company. So if we buy and sell within a period of two years, odds are, we're probably going to lose some money. Now it's not the end of the world.

Buying a home doesn't always have to be, how do we squeeze the most money out of every decision possible. It's okay to buy something and not turn a profit on it. I buy lots of plants. They make me zero money at all, but I still spend money on them. Not everything is about how do we extract the most money from things, especially if it's something that's going to bring us joy and enjoyment.

If we're saying, we know that we're going to be moving within the next two, maybe three years, then renting might be a better option. That way we don't have to take on those upfront costs when we buy and the costs to sell.

Six: You have a lot of debt.. or worse!

If you have a lot of debt or worse, a debt and spending problem. If you have a lot of debt. And mainly what I'm talking about here is high interest debt. So things like credit cards or maybe installment loans that have really high interest payments on them. We want to get these taken care of before we buy a home, because those are the things that we're just going to suck the life out of us financially.

And they're going to drain us of money actually on paper, right? Because of how high those interest rates are. So instead of taking money and spending it on a whole. It'd be better for us to take that money and spend it to pay down these high interest things.

Now student loans are more of a personal choice. Maybe you have a, really a large student loans and you want to tackle those first or at least get them down to a more reasonable level before you purchase home. That's perfectly fine. It's going to be more up to you and what you're comfortable with, but if you do have. Buying is probably not maybe in the cards for you right now.

And even worse is if you have a debt or a spending problem, if you keep adding on more and more debt to your life each month, then buying home is probably not going to be good decision because now you're taking on a huge amount of debt, right? Maybe a hundred thousand dollars plus 200,000 or, 300,000, however, big your loan sizes on top of the other debt that you have.

And you're getting into this problem where you keep using more and more debt. It's highlighting a budgeting issue that we have here.

What we should do

And what we probably need to do is maybe stick where we're at, go back to the drawing board and say, what do I need to do to work on myself and my budget, and start looking at some budgeting resources to help pay down the debt and correct the spending problem that we might be having.

It's okay to recognize, you know what? I have a spending problem. I need to tackle that first before I take on this huge, additional cost upfront cost of buying a home, the monthly cost of buying a home, the maintenance costs, and the selling cost of buying a home. We really needed to reign that, that budgeting problem in before we go into the homeworld.

Buying won't fix bad relationships

Because again, it's the same thing with like marriage in a bad relationship. Us buying a home is not going to mean we'd all of a sudden know how to use the money better. It's only going to more money is going to highlight our money problems.

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You are not throwing money

Then finally, keep in mind, renting is not throwing up. Th you'll find the people who say that are generally salespeople, they profit from you buying a house. Those are the ones who are going to say renting is throwing money away, putting a roof over your head is always going to have a cost to it.

Those were doing some crazy sort of investing stuff. Putting a roof over your head is going to have a cost, right? It's just the nature of being able to say, I am protected from the rain and hail and snow and everything that's coming down on me and having shelter. It's going to have a cost to it. That's perfectly fine.

Renting is great

Sometimes renting is a much better solution for you in the short term, then purchasing might be right. If we're talking about that two to three-year timeframe, it's perfectly okay to rent and say, here are the next steps that we need to take to make sure that into three-plus years we're ready to buy and that's going to be a smart choice for us moving forward instead of just the choice that other people pushed on us because they have their own sense of urgency and they want to put their urgency on us so that we make a decision that benefits them financially.

Make a plan, don't let others do the planning for you

So if you need to wait, it's perfectly fine. Just be able to recognize that internal or internalize it that way. When somebody asks you, why aren't you buying the market's hot home prices are going up. Interest rates are low instead of having to go back to the drawing board in your head and questioning yourself.

You want to be able to go back to some resolute idea that you wrote down again on a piece of paper and a note, something like that said I'm not buying because of X. Here are my steps to make sure I can purchase within the next X amount of years. That's going to help alleviate so much stress, frustration, and friction.

When you're talking with people or you hear the news coming out saying interest rates lowered, even more, it's going to help you understand what you're doing to move forward with the wisest decision possible.

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