Can you really afford this home? Here’s a question we, as Realtors, don’t ask our clients. It comes across pushy, demeaning, snotty, and rude. It’s a fair question though isn’t it? Can you really afford this home? It’s even open ended because it’s not just addressing the monthly payment it’s addressing the cost of home ownership.
In today’s market with interest rates at an all-time low the mindset is to buy and buy now. Don’t wait for interest rates to slide a point because you may be priced out of the market. Don’t wait because the price of homes will go up. The media, agents, lenders, and vendors are all saying the same thing, buy and buy now! The problem is can todays buyers really afford to buy now?
First time home buyers today really don’t realize the amount of money that goes into home ownership. Sure you have your monthly payment and you may feel comfortable with your other bills on top of it. But what if the water heater, furnace, or AC goes out? Is there money to cover those? What if you have a home warranty, can you afford the $400 a year to keep it going? How about paying for trash or water? Sprinkler blowouts and HVAC servicing and cleaning? What if you need a new roof?
The list above is just for up keep and monthly maintenance. What happens when taxes go up? What happens if your HOA decides to up the dues to cover the cost of maintaining the grounds or building? What will happen if the market takes a plunge and the home you just bought, which sold for 20,000 dollars higher than when the sellers bought it 2 years ago, is worth less than what you paid? Can you really afford this home?
What I’ve found is home ownership is a wonderful thing and I hope that everyone can become a home owner. However being a home owner is a privilege not a right. While everyone can become a home owner not everyone should be. Before you decide to take the step and purchase a home you should really consider all the what-if’s. Life isn’t perfect and Murphy’s Law, what can happen will happen, usually will take place. If you aren’t in the position to handle the what if’s are you really sure you can afford this home?