I believe we are one of the fastest growing real estate brokerages in the United States for one important reason: our values. Our founder, Bryan Bowles, learned those values from the example set by his grandfather, who made his living as a butcher. One thing he clearly believed is that businesses need to build trust with their customers.
Unfortunately, some real estate agents and brokerages do just the opposite and try to extract every dollar they can from a transaction. That focus on the short run is a big reason why real estate professionals are less liked than lawyers.
We aren’t going to do that at this brokerage.
At Worth Clark Realty, we focus on building a reputation of integrity and creating lasting relationships with our customers and the communities we work in. That’s why we want to send a message to buyers you won’t hear from many Realtors®:
Many of you are getting in over your head, and paying too much for your home.
The reason some buyers are breaking their budget in 2019 is different than it was a decade ago. In 2018 there were fewer homes available, which results in higher prices. However, just because buyers aren’t falling victim to bad mortgages like they were in 2007 doesn’t mean they can’t find themselves in a difficult spot down the road. Determining what you can afford is the first step towards a home purchase.
So how do you know what you can afford?
The old guideline of spending 30% of your income on housing is still a good place to start. However, in some markets 30% is unrealistic. But a guideline, a government regulation, or your lender won’t tell you what you can afford.
Ultimately, you know your budget best.
Yes, a lender will verify your income to make sure you can technically afford a home, but the lender (and your Realtor®) can’t tell if this purchase puts you close your personal financial limit.
You can avoid putting yourself close to the edge by remembering two things:
1. Don’t rush. There will eventually be a home that’s right for your budget.
There aren’t enough houses on the market right now to meet buyer demand. For many buyers, increased prices may not represent a risk. However, if the price of a home in the current market is edging past your limit, take heart:
Because of the wonders of supply and demand, there will be more houses soon.
Homeowners and home builders are seeing the increase in prices and are responding accordingly. More houses are going on the market, and builders are building again. If you don’t get the home you want today, there will be more homes for sale soon.
Eventually one of those homes will be right for you and fit comfortably within your budget.
In the meantime, remember…
2. It’s okay to keep renting.
Purchasing a home can go a long way toward building a foundation of wealth for your family. However, purchasing a home you can barely afford can lead to financial distress that may be hard to recover from.
In other words, renting until you find the right home for your budget can be frustrating, but it is ultimately an important step in building the multi-generational wealth that comes from home ownership. Based on the simple law of supply and demand there’s a good chance that renting and waiting will eventually put you in a better home—and at a lower cost—than the home you have to stretch your budget to afford in the current market.
For a Realtor®, a higher sales price means a higher commission. That’s just the way our business works.
However, as Worth Clark Realty is is building a brokerage designed to thrive in the inevitable ups and downs of the market, it’s important to us that Worth Clark Realty is straightforward with our customers.
So here it is again, as straightforward as I can be: Don’t risk your family’s long-term financial health on a home you will struggle to afford. Wait until the right home for your budget hits the market.
In the long run, you’ll be glad you did.
