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Reasons to Delay Buying a Home
Assuming you have the financial resources and the desire to eventually own your
own home, there are very few good reasons to put off the purchase. You can miss
out on years of appreciation if you do.
The main thing you want to avoid when buying a home is being put in a position
where you will have to sell it too soon. If you have to sell a home before it
has appreciated enough to cover the costs and commissions of selling, you could
find yourself in a financial bind. This is especially true for those who buy a
home with a down payment of ten percent or less.
Real Estate commissions traditionally run around six percent of a home’s sales
price. The seller’s closing costs generally come to about one and a half
percent. You can see how this can easily exceed the first year’s appreciation.
If you made a minimal down payment, you could actually have to come up with cash
out of pocket to sell your home.
New to the Area
A very good to reason to delay buying a home is if you have just moved to an
unfamiliar area or region of the country. It makes sense to rent for a number of
months before deciding on exactly where you want to live. Often when people buy
a home immediately they find that they might have made a better decision if they
had waited awhile.
Uncertain Job Future
You could be right out of college or expecting a promotion and a transfer. Or
your company has announced an impending "restructuring." If any of these apply,
it might be best to wait to buy a home. When you have a more accurate picture of
what your next few years will be like, that will be the time to buy.
Marital Problems
Real estate agents see a lot of life unfold before their eyes. One of the
saddest occurs when former clients divorce and are forced to sell a recently
purchased house. It happens all too often when a family in turmoil decides that
buying a new home may help resolve their problems. Perhaps it is inevitable that
such problems occur, but selling a home before it appreciates can create an
additional financial burden in an already difficult situation.
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