When Is the Right Time to Buy a Home?

Is it when interest rates are at the lowest? When there is a real estate crash? In a recession? When you are making more money? When the market is booming? 

These are questions we all have, the answer however might surprise you, as it surprised me!

Think about it. A bunch of factors need to align:

• Your Fico Scores needs to be good

• You need savings for down payment & closing costs

• You need to have a stable or increasing income

• You need to have found a property that is right for you

• And the monthly payments need to be within your budget! 

All of the above have to come together more or less at the same time.

What are the chances that all these factors would be present simultaneously?  

For most people, this only happens a few times during their lifetime! 

This is why for most people, THE BEST TIME TO BUY A HOME IS WHEN YOU ARE READY!  

It is when these factors are in alignment for you.

I wish I could take credit for this advice, but alas I am not that smart. This piece of wisdom was given to me by one of the top Los Angeles real estate agents. 

But, what happens if you are ready to buy when homes are increasing in value? Aren't you overpaying? Well, if the market is increasing, yes, you are initially overpaying but guess what, it is a matter of time before appreciation catches up with your purchase.

I will never forget many years ago, when I was starting in this business, a couple looking for a home was interviewed by the Los Angeles Times. Their conundrum was that they were ready to buy, they had found a home they liked but they were concerned the seller of the property was asking $300,000. They feared, and rightly so, they were buying at the top of the market.

Yes, they bought at the top in 2006, but that house today is worth $1,500,000!

On the flip side, what happens if you buy at the bottom? Then you were lucky to be ready when the market was at the bottom!

But, wouldn't it be better to be ready and then wait for the market to bottom?

In theory that sounds good, but in practice—like the Full Moon—these factors only align for a short period of time. If you don't seize the moment, they go away and it may take years before they align again for you.  

But if this only happens a few times in your lifetime and when it does you might decide not to buy but continue renting, why the fuss? Why not continue renting?

That brings us to the Buying versus Renting question which you can answer for yourself by reading this article: Buying Versus Renting

I know this dilemma very well because it happened to me! Back in 2009, I missed the opportunity to buy a wonderful new condo. The developer went out of business, the building was repossessed by the bank and these condos were going for $150,000 in the middle of Los Angeles. At that time, the down payment was $3,500, credit scores were minimal, payment was about $998 per month. At that time I was paying in rent $1,750. 

I thought, well.. I can wait, something better will turn up.

Then in about a week, the window of opportunity went away!  

This place today retails for a lot more!

So don't be like me! When opportunity comes knocking your way, don't delay.

If you are thinking about purchasing a property, it costs you nothing to run a scenario of how it would look for you. Feel free to self-schedule an appointment here.