“It’s deep in the race for a man to want his own roof and walls and fireplace.” This quote from the vintage film It’s A Wonderful Life is as true now as it was nearly 80 years ago, and perhaps even more with the people of the world often facing difficulties that a home of their own would help to alleviate, if only in the heart and mind. Any king or queen would want a castle from which to decide what to do with their kingdom, and to have one’s empire undisturbed by troublesome neighbors in the walls or ceiling is a prize any ruler would seek.
Ask any millennial or Gen Z though, and you’ll likely hear an observation that it “isn’t like it was for our parents; they actually could afford their homes”. This is true, though only part of the story. Our parents may have had homes, but consider what we have that they do not: Starbucks lattes, Spotify and Disney+ subscriptions, new clothes and furniture whenever we want, and DoorDash and UberEatsYourMoney for when we feel peckish (truly, why do folks spend twice what their lunch is worth just to have it delivered?). The new generations spend a considerable amount of money on things our parents never dreamed of, much less would pay for. Their Starbucks was McDonald’s, their Spotify was the radio, and their clothes and furniture were often consignment or hand-me-downs. Yes, things have gotten more expensive and the wages have not increased proportionally with cost, but in addition to matching wages we are also missing the thrifty mentality of our parents.
How then does one answer the question of acquiring the status symbol that Dave Ramsey has called “the BMW of our time”: the standalone home? Perhaps only the Philosophy majors will appreciate my answer, but here it is: “it depends”. A wide variety of factors go into telling you if you are ready to make such a move, and despite what the less-than-savory real estate agents and mortgage lenders may tell you, it may not be the best time to buy a home!
For some, it will be a great time simply out of necessity: their parents have reassigned their room’s purpose, their nosy roommate has broken the last straw, or the rent has just continued to increase past their sustainability. For these folks, rate doesn’t matter and they will buy the home that fits them even if it is tight and they will hope for a refinance in the future to let off some pressure. Others will find their current options tolerable and will want to stay put until “things calm down” code for “until rates get back into the 2s and 3s”, though some good education may realign that expectation. Still others find themselves caught in the middle of the two perspectives: a change is desired, but there are so many questions that the “analysis paralysis” sets in and they cannot move for the decisions to be made.
One of my managers once told me: “the road of life is paved with squirrels who couldn’t decide which way to go. Just move! Even if it isn’t the right way, at least you won’t get run over!” Carrion-attracting analogy aside, he has a point: to run in a circle gets you nowhere, so better to run somewhere if nothing but to learn you should run the other way. This is what a good lender or realtor does: they advise their buyers. There are plenty of salespeople out there who will gladly live in the confusion and manipulation often associated with shady business tactics, but the best (here having the meaning of “most ethical”) will behave less like a used car lot worker and more like a doctor: hearing, listening, studying their person until the solution is present, even if that isn’t what the person wants to hear at that moment.
Let’s say you wanted to climb Everest. There is an extensive list of things that have to line up perfectly for such a feat: fitness, gear, acclimation, supplies, groups, guides, and especially weather all have the potential to allow you passage to the highest point on the planet or to send you shuffling back to base camp. If everything works in your favor, you can have a selfie that is the envy of all your Instagram followers. However, if even one thing goes badly enough, you may be eating yak while looking at the peak high above, or attempting to climb out of the crevasse you missed on your pre-climb briefing. Drama notwithstanding, homebuying is kind of like that: the stars must align for a successful home purchase, and the right “sherpa” can help you, but they are not magicians.
The first thing I would say is to find a good working pair in a real estate agent and a mortgage loan originator. These two parties work closely in the process of sharing you as a customer, so you want to ensure that both have the same customer-caring mindset when it comes to you and your goals. Most real estate agents will give limited assistance in your search without financing secured, so that will be one of the first items of business. Whomever you begin with should have some good referrals for the missing party (lender to agent, or agent to lender).
The second thing is to set up an interview with both, taking time to explain your situation and answer their questions, and unless you have a seriously crazy gut feeling, take their advice. If they have come to you from a trusted source, odds are they didn’t become a referable person by accident. If they have listened to you and are worth half of what they may think, they will have an answer that has your best interest at heart, even if they have to break that heart to deliver it.
The process thereafter will look a little different for everyone, but suffice it to say: the right team will take you to the top of the mountain, and standing in your own yard will feel like the highest peak. You may be ready now, or it may take time to plan this campaign, but it can be done, and for most it should be done, maybe just not right now. Surround yourselves with advisors, Your Highness; no one will take the castle alone.
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