When Should I Buy A House?
Kassy at Sparing Change asks, “When should I buy a house?”
Simple answer, “When you are ready for the responsibility.”
People can say they want a home and say the have the money. But if you’re not mentally ready to stay in a place for 5 years, or deal with the maintenance, then perhaps it’s not time for you to take your savings and put a down payment on a place. (My answer actually has nothing to do with Kassy’s question, but that’s what I first thought of in my head.)
When I first moved back from California, my parents offered to help me buy a townhouse in Baltimore. Back in the day, you could still get a place in Hampden for $80K without having to fix up absolutely everything. But I took a look around at my life and decided it wasn’t a good idea. I didn’t love Charm City enough to make it my home for the next 5 years, and I ended up leaving after about 2. I was underemployed and the lack of stable income would probably have hurt me when looking for a mortgage. I am not an easy person to live with and my roommates didn’t always get along with me. Buying a home and having some roommates wouldn’t have been a good idea.
Fast forward to 2004, when I decided to buy a house.. It’s all in there. Basically I bought a home when I was finally sick of roommates and being boxed out of the shower in the morning when I was on the early shift. Sure, I had a few panic attack moments when I realized I was signing my life away to a mortgage, but I took a look around. I knew I wasn’t ready to mow the lawn every week or deal with the roof leaking. I was a bit of a mess when the first plumbing disaster occurred during my first week of occupancy, but for the most part a condo was the right choice for me.
Also, I didn’t overbuy a home. I know someone who ate ramen noodles and had no furniture/crappy old stuff the first year he owned his house. It was a little bit of a stretch for him, but he was down with the daily sacrifices because he really wanted his castle. I’m still very proud of him for his self-discipline. He never complained because he was ready to make that sacrifice.
If you aren’t ready to give up your weekends to a house project, or can’t cope with a crisis at the house, don’t do it. It’s not really about whether or not the real estate market is falling or rising. It’s about where you are in life and whether or not homeownership fits into it. I’m still not ready for a single family house or a townhouse. I fantasize about a bigger condo and smaller HOA payment, but I’m happy with my little home as is and the low maintenance involved. It’s a responsibility I can handle and it’s not so much about the money itself or an investment. Buy a home because you want to create a home and not because now seems like a good time to get into the real estate game. In the end, that will help you make the wisest decision about having a home and it will make you happier when you know it’s the right time.
Bro wrote:
I was in a similar situation in 2002. My parents wanted me to buy something, and offered to help with the down payment. So we went to see a prebuilt town home community in Rockville. The agent (if you can call her that) said here is the house, here are some pictures, fill this out, we are going to have a drawing in 2 weeks.
I asked, you are giving a house away? She said no, we have 150+ interested clients for a 25 unit release.
Being young and didn’t know any better, I then asked: How much are these homes? She said, starting in the mid 300’s, if you want the stone face and other options, tops out in the low 400’s. I left and said to my parents, that is insane, $300k + for a town house, who would be that nuts??
Fast forward a few years, the model I saw is on Zillow.com for $730k.
I still believe it was a great decision on my part. Sure I’d have sold and made a bundle eventually, but the financial impact plus mental impact of a large mortgage payment would been greater than the monetary gains.
Posted on 30-Jan-07 at 3:16 pm | Permalink
moominoid wrote:
Yeah, I can hardly handle my rented apartment
Only one person in real life has ever suggested to me I should buy a house. The guy who hired me at my job in Australia. In retrospect it might have been a good deal but I had just arrived in the country and only recently left negative net worth and was only promised a job for 3 years. That was way too shaky for me.
Posted on 31-Jan-07 at 10:30 pm | Permalink
sfgal wrote:
That’s an interesting point of view. My aunt bought a condo in suburbia because her rent payments were equal to the condo mortgage.
I was looking at buying in the bay area and splitting the cost with my mom but I think that’s too risky. And I’m considering going for my MBA in a few years and I don’t know if my mom can handle house projects all that well.
Posted on 01-Feb-07 at 2:39 am | Permalink