Portal Forum General General Discussion Home Ownership Reply To: Home Ownership

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    Everyone has thoughts on home ownership, and many good points have been made on both sides. It is certainly an interesting topic for this forum, but I’ll bite. As a young(er) person who has bought and sold a couple times (including building on a bare lot), and dealing with real estate transactions as part of my career, my takes are as follows:

    1. Buying a home, much like buying a car, getting a dog, or having children, is a personal decision that may be right or wrong based on life circumstances and plans. There is no part of buying a home that applies universally. Every market is different, and there are always good buys and bad buys regardless of whether the market is at the top/bottom. With that said, I like buying vs. renting in most situations.

    2. Buying a home the first time can be a daunting process with many surprises (unknown costs, tax benefits, etc.). As far as expenses of buying, there are a laundry list that can come in to play, but there are also a bunch of ways to defer or re-allocate those costs. Typically, a buyer will be responsible for loan origination fees and points, title insurance (a percentage of the purchase price – call it $400 per $100,000 roughly) or attorney’s title opinion, home inspection costs, mortgage registry tax (.0023% of mortgage amount – slightly higher in some metro counties), and half of the closing agent fee and expenses and recording fees $46/document typically. A seller typically pays real estate commissions, deed prep, deed tax (.0033 of purchase price), half of closing agent fee and expenses. All told, “closing costs” will usually run 2-5% of the purchase price, but a buyer can often get many of these paid by negotiating with the seller.

    The best advice I can give you is not to worry about “mastering” the steps in the process, but rather know your wants, understand and follow your financial limits, and then focus on working with good people you trust (banks/realtors/lawyers/etc.) as the process really will take care of itself to a great extent.

    3. I believe that now is good time to buy. Interest rates are near historical lows. Housing markets seem to be buyer friendly or neutral. If you can buy today when the market is “buyer friendly” at 4% or less, your buying power is much greater than if interest rates move to historical averages (or even close to average) even though you may be in a more secure financial position in two years.

    4. If you buy a home, there are no guarantees. No guarantee you’ll love it, but you can always sell. There are no guarantees that you will make money, but unlike renting, it is also not a guarantee that you’ll never get any of your money back. In the end, the best part about owning a home, is that it is yours.

    Good luck, and have fun looking.