Chapter 1 for Buyers:
Why on earth do you want to move?
Not many sane people want to pack, relocate and uproot their current home, their nest, unless they have a good reason to! If home is where the heart is, then moving is not for the faint of heart! Trust me, I’ve moved a couple of times in my life!
Real estate is one of those life necessities. Everyone needs shelter, and even though we are a first world country with abundant resources, there are approximately 3.5 million people homeless in the US (In South Africa, my home country, 60% of the 45 million people living there are without electricity, 16 million have no access to clean water and 22 million people lack adequate sanitation). A little perspective is always refreshing! So, if you have a nice home and are happy in it, then you need to make sure there’s a good reason to move.
Of course, almost every mortgage broker and real estate broker wants to convince you to move. And who can blame them? That’s how they make their living so they can pay for their housing. There are certainly a number of compelling reasons to move. A large part this country’s notion of “The American Dream” is that everyone can own a home and Uncle Sam actually does a lot for us in that regard. Having just come out of the “era of irrational exuberance”, the fundamentals of home ownership have never been more scrutinized than they are right now.
Having sold thousands of apartments, I’ve become intimately familiar with the top ten reasons real buyers buy. They are:
1.) I’m relocating for my new job.
2.) I’m getting married.
3.) I’m getting a divorce.
4.) We’re expecting another child and five people in a studio won’t work.
5.) My children have moved out and we don’t need so much space.
6.) I’m tired of making my landlord rich, rates are low, I’ve saved for my deposit, and I want to build equity.
7.) I can’t walk up these stairs anymore after 50 years. I need an elevator and a doorman.
8.) My grandfather just passed and he left me this amazing 7 room co-op.
9.) My commute to work is killing all my time with my wife and family.
10.) I can’t afford to live here anymore.
Here are the top ten reasons NOT to buy:
1.) Look at the Jones family! (Google “keeping up with the Joneses”)
2.) The guy over at the bank said he can get us a cheap loan for a bigger house. (Reminder: That’s what got us into this mess)!
3.) We stumbled upon this open house and loved the views.
4.) My broker said we could make bank on selling our current home.
5.) I’d like to live in a building with a putting green on the roof or a triathlon training facility.
6.) There’s a great club across the street that I frequent.
7.) I could be a part time flipper and make a small fortune.
8.) The most recent “housing report” says it’s a “good time to buy”.
9.) I received an unsolicited bid on my home, so now I need to move.
10.) It would be cool to live in a (insert “starchitect’s” name here) building.
Most of this seems to be common sense, but I have found that when it comes to buying things, small or large, common sense is not always that common.