Don’t you wish you had a crystal ball? That crystal ball would tell you what the weather is going to be 6 months from now when we’re planning an outside event. We would know that this “phase” our kids are in is just temporary. The sphere would help us not make relationship mistakes. It would enlighten us to a path to success and reveal our future in such a way that we wouldn’t sweat the small stuff. As a Realtor, I wish I had a crystal ball for all sorts of reasons.
In real estate you have to take risks. Unfortunately, I don’t have a crystal ball to tell you which house will appreciate the most, what the economy will do in 3 years, or what the new, hot area will be in 5 years. Yes, it can be risky, however, they need to be calculated risks. There is no reason to throw caution to the wind when you’re making what will likely be the most expensive purchase of your lifetime. Trends, predictions, and history are all things we need to look at. However, as we are currently experiencing, we can’t predict when the world will come to a crawl because of a pandemic or a national disaster. Here are some things to consider when taking the risk of becoming a homeowner.
- Job security. Don’t just look at your job as a minimum. Evaluate your industry, your career. Is your industry volatile? Who would have thought you would be an out-of-work food server? If you are in an industry that could be affected easily, consider getting a side-gig or simply save more money before you make that leap.
- Your savings account. Do you have enough savings to allow you to pay your mortgage and other monthly expenses for at least 6 months? This is a great rule of thumb. I never want to see my clients be “house poor”. You do not want to be in a position to lose your house when a little patience and frugality could make all the difference.
- Goals. If your plan is to buy a house for just a short period of time, you want to stay on the lower end of your budget and choose a type of property and area that traditionally sells very quickly. Do not buy a unique property if you have short term goals. On the other hand, you can take a bit more of a risk and get into something that may fit your specific needs a little more freely if you plan to stay in the home longer than 5 years.
Don’t worry too much about the neighbors. Within reason, don’t cross a great opportunity off your list because the neighbors look like they are filming an episode of Sanford & Son. Neighbors come and go. You may purchase next to the tidiest, most considerate people who keep their lawn looking like HGTV and they may move away in 3 months. Look at the overall area and evaluate the surrounding houses on the street.
Since none of us have that crystal ball, sometimes we make the wrong choice. Don’t beat yourself up, just evaluate the situation and consult a professional to help you minimize the damage. Stay positive because everything continues to change, the world continues to spin, and you will get another chance.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur baby, Tyler, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.