The decision to pursue homeownership may be based on many factors: everything from a friend’s decision to purchase a home or a family member’s advice against “throwing your money away on rent” to your bad experience with a landlord or the noisy neighbors sharing your wall. While all of those scenarios (minus peer pressure, of course) may inspire valid arguments for considering the purchase of a home, how do you determine if you’re genuinely ready to join the ranks of homeowners? After all, it’s hardly a decision to be taken lightly. If you’ve spent your life as an apartment-renter or a condo-dweller, you’ve never had a yard to maintain. Even more significant, you’ve never moved into a home without the appliances — a refrigerator, washer and dryer, and microwave, for example — you’ve taken for granted as a renter. All of those appliances represent immediate expenses you’ll face upon move-in — and that’s precisely the time when you’re already feeling financially drained.
So is there any definitive way of knowing whether or not you’re ready for homeownership? Yes, to an extent. You can ask yourself a series of questions, and based on your answers, you’ll have a fairly strong indication of whether or not you’re ready to commit to what’s sure to be one of the biggest financial commitments you’ll make in your lifetime. Ask yourself the following questions, and jot down your immediate response (don’t ponder the answer you think the model homeowner would provide). Go with your instincts.
- Why do you want to purchase a home? If it’s because your best friend just purchased a home and is constantly gushing about her new garden, extra living space and great neighbors, don’t get caught up in her excitement. Remind yourself that committing to homeownership means facing expenses you probably can’t even comprehend at the moment. It also means ongoing maintenance. The bottom line is that homeownership is an lifetime commitment that can’t be decided overnight.
- How long have you wanted to be a homeowner? Were you content being a renter until some recent event or thought triggered thoughts of homeownership?
- Do you think your quality of life will improve if you own a home? How?
- In what terms do you associate homeownership? Does it represent in your mind an important step toward “becoming settled”? Do you view homeownership — the act of putting down roots — as a necessary milestone that you must cross in order to be taken seriously? Or do you view homeownership merely as a smart investment that can pay large dividends later if and when you decide to sell? If you’re thinking of homeownership solely as a means of putting down roots, you could become so wrapped up in this emotional decision that you overlook the practical factors every prospective homeowner should consider: the quality of the surrounding neighborhood, the resale value of the other homes on the block, the quality of the local schools, and the quality of your prospective home’s construction, among other criteria. You may also fail to consider whether or not the market is favorable for buying a home right now. It may be in your best interests to wait.
- On the other hand, if the market conditions are good for considering the purchase of a home right now, are you feeling pressured to buy? Renters who live in hot real estate markets sometimes feel as if they should hurry up and buy homes before prices become too high. But if your instincts are telling you that this really isn’t the best time for you to make this commitment, it’s best to avoid jumping into homeownership at the present time. Instead, consider waiting until the market cools down slightly. Remind yourself that this isn’t the only time your local market will be hot; you’ll probably witness an upswing again in the near future. Or you may even consider another neighborhood that lies outside of the “red-hot,” high-priced region.
- Are you happy with your present job? Are you confident that you’ll remain with your current employer for a lengthy period — so confident that you’re ready to put down stakes and commit to staying in the area for several more years? If that’s the case, it may indeed be a smart investment to purchase a home located close to your place of work. And if you work long hours, the closer you move to the office, the better your quality of life. You’ll also save considerable amounts of money on gas.
- Are the local schools noted for their academic quality? Even if you don’t have children, it’s smart to consider this factor because it will affect your home’s resale value. If you do have children, how close are schools to your prospective new home? Will you save time shuttling the kids back and forth, allowing you to spend more time with them at home? If so, this is an excellent reason for considering homeownership.
- Are you ready to assume the responsibility of home maintenance, including everything from appliances to yardwork and plumbing? Remember that you’ll have to factor these inevitable expenses into your annual budget. How much you’ll need to budget will depend, of course, on the age of your home, the general condition of the home upon move-in, and most important, how attentive you are to its ongoing maintenance needs. If you turn a blind eye toward those little signs that something is wrong, and you wait until something catastrophic happens, you’ll be facing expenses far greater than you could imagine — or afford.
If, after answering these questions honestly, you’re still feeling trepidation, you should by all means listen to your instincts. Homeownership does, indeed, represent one of the most significant milestones of our lives. When you sign on the dotted line and commit to this major investment, you should feel confident in your decision and look forward to what lies ahead. Your choices have never been more numerous or more varied than they are in today’s real estate market. You have all the time in the world to make your decision, so make it slowly, deliberately and intelligently — so that when the time is right, you’ll know it.