Preparing to Buy a Home
I have always loved real estate. I grew up with both my Dad and grandfather as huge influences in my life and they not only ran the hundred year old family building supply business in Detroit but were both involved in real estate development, building, and investing. So real estate and building was always in my blood and now I get to make a living deal with real estate. The incredible thing is every bit of this earth is different. As Mark Twain put it “they aren’t making it anymore”. That uniqueness is one of the main reasons I love it and one of the reasons it can be such a great investment.
I came to Moscow in 2003 and just like death and taxes a sure thing is that you need a place to live. So I rented an apartment but again, because my dad had that influence of real estate we thought about buying a house so I could manage it and rent it to my friends through college. We looked at a number of homes and I took notes but ultimately we decided they were just too expensive. Looking back at that notebook almost makes me sick. We were looking at homes that are now selling for close to $300 and I thought $140k was too much! Not only that but now, 17 yrs later a house would have been almost halfway paid off and producing great rental income. So I wish someone had pushed me more to take that risk and responsibility early on.
I do want to give an important caveat here: not everyone should buy a house instead of renting. There have been a number of times that I have talked myself out of work by telling someone it might not be the best decision for them to buy a home right now. Unless you are looking at a flipping opportunity, you should plan to own/live in the house for at least two years or it probably won’t be a great use of your time and money. Also, you want to be careful to not extend your hand farther than you can pull it back (i.e. be very cautious about debt!). Find experts you can trust (whether an agent, banker, or financial advisor) to make sure you aren’t making those mistakes.
Owning your home can give you a sense of stability, a sense of place in your community and certainly a pride of ownership with the ability to personalize and make your mark on both the land and house. So whether you just want a place to live, want to try your hand at being Chip or Joanna Gaines and flipping houses or want to start building your inventory of investment properties there are many good reasons to buy instead of renting here in Moscow. As you have probably heard the three most impotant things in real estate are location location location and Moscow is really an oustanding bet over the long haul with all the exciting things going on here and large student populations to make long term rental holds a great idea. A Warren Buffet quote I saw said “our favorite holding period is forever.”
So what steps should you take to begin the buying process? Step one: Talk to a realtor. They will have their finger on the pulse of the market and be ready to bring their experitise to every situation you might encounter as well as bringing deals that might never hit the MLS. Also as a buyer by “hiring” an agent you get all of that time and energy, expertise, experience and protection without having to pay for it in most instances. And I highly recommend having your own representation as a buyer. Step two: Talk to a lender. Your realtor should put you in touch with a good lender (which is key) to brining your deal together. Be ready to be transparent with your finances. And if you haven’t yet, build credit by using a credit card and paying it off on time. Step three: Don’t be afraid to make offers. Trust your realtor and be ready to jump, especially in a hot market.
Even if you are a few years out, the only way you will be ready is to start thinking about it and working towards it now. Again, any realtor or loan officer would love to be able to start the conversations early with people rather than playing catch up later. And just like saving for retirement now, the earlier you can get started the sooner you’ll have that first property paid off and have an asset that can give you freedom.
- MIKE CHURCH
