You’ve been saving, hoping, and planning for years, and now you think you’re finally ready to do it. You’re going to buy the home of your dreams. You’ve been looking online and in person; you think you’ve found a good neighborhood where you’ll want to raise your kids. And the price is right too. Until one day, it’s not.
The pandemic strikes, and all of a sudden, the economy takes a massive dive. Perhaps you or your partner lose a job, and your income just isn’t what it used to be. Maybe you’ve applied to receive unemployment benefits. Maybe you just can’t leave your current house for health and safety reasons. Regardless of what brought you to this point, you can no longer afford the home you had your eye on.
So what can you do? You’re still in the market for a new home, but since your budget has taken a major hit, what you initially thought you could afford isn’t realistic anymore. The reality of the situation dictates that buying a home must take a backseat for the time being. Or maybe, you could refocus your search to find a home that’s within your budget.
Here are a few strategies you might consider:
1. Wait and Continue Saving
Buying a home during a global health pandemic is not an ideal situation. If the housing market in the area you’re looking to buy tends to fluctuate, the pandemic may be wreaking havoc on the prices.
One option is to wait it out. If you’ve already saved a good chunk to cover your down payment, then you’re in a good position. You may want to take this time to hold onto to your accumulated finances. After all, you’ve been saving for a while to get the home you really want, so why rush into things?
Don’t let your busted budget be the dictator when choosing a new home. Buying a home is a huge decision, and you should be happy with the property you pick. Price shouldn’t be the only deciding factor. You shouldn’t have to make major compromises.
Another thing to consider is your current ability to take out a mortgage. It’s difficult at the best of times, and the pandemic isn’t making it any easier. If you can avoid borrowing right now, it might be best to do so. Refocus your efforts into staying afloat during this difficult time, and keep putting away more money. Down the road, you’ll either be able to afford the house you want in your desired neighborhood or the prices could even drop, meaning your funds will go even further.
However, for some prospective home buyers, this might not be possible. If you need to buy a house now, keep reading.
2. Adjust Your Criteria
If you’re determined to buy a home and not in a position to wait around, you might need to adjust your expectations. Keep in mind, compromise isn’t inherently bad. You will always have to compromise in some way when it comes to buying a home, unless you’re building it yourself. Trading off some of the smaller details on your wish list will help you snag the big picture; you can fill in the details later.
Maybe it means that you won’t be able to get the three-car garage that you wanted, or you could be trading a big backyard for better proximity to the high school. You might give up hardwood floors for extra square footage, or granite countertops for a third bathroom.
Remember, if you’re compromising on a design feature rather than an immutable aspect of the property, you can always upgrade it later. Just because you can’t have it now doesn’t mean you never will. Think of it as a matter of delayed gratification.
Here are some points to consider when setting your expectations:
- Instead of setting your sights on the most expensive home in a bad area, why not go for the least expensive home in a good area?
- Think about your priorities. What is it about the neighborhood appeals to you? If you’re planning to expand your family—or even if you’re not—is the community a good fit for you? What’s the school district like? What value do you place on certain aspects of homeownership? Which ones are you willing to compromise, and which are set in stone?
- Once you’ve found a home you’d considering buying, make sure you do a home inspection. While you can upgrade a home’s aesthetic features, you don’t want to be saddled with poor foundations, or a house that will need a lot of repair work right off the bat.
- Take a look at the value of the surrounding homes. Are they trending upwards or downwards? Ideally, you want to settle in a community where home values are on the rise.
3. Expand Your Horizons
If you can’t find what you’re looking for within your budget, it might be time to cast the net a little wider. If you’ve limited yourself to a very specific idea of the kind of home you want to have, exploring your options can give you a new perspective.
For example, buying a house in the city or a gentrified metropolitan area can be significantly more expensive than in a suburb or the country. Of course, the opposite could be true in certain areas, especially when you factor in the cost of transportation.
Depending on your future homeownership goals, expanding your horizons will help achieve your vision in the long run. Even if your dream home is out of reach now, that doesn’t mean it will never happen. It’s all about weighing the pros and cons and judicious prioritization of your wish list.
Even if the pandemic has shifted your short-term home buying goals, you still have lots of options. The right home for you isn’t out of reach; it’s just a matter of whether you’ll get there sooner, or later.
When you’re ready to buy a home, we’re here to help! Reach out to REX to learn more about what we can do for you.