Owning v. Renting
Our goals are simple -- to ensure that you're happy with the home you buy, that you get the best deal you can, and that owning the home helps you to accomplish your financial goals. Most people should eventually buy homes, but not everyone and not at every point in their lives. To decide whether now's the time for you to buy a house, consider the advantages of buying and whether they apply to you.
Owning should be less expensive than renting
Here's a guideline that may change the way you view your seemingly cheap monthly rent. In order for you to see how expensive a home you could afford to buy while having the same approximate monthly cost as your current rent, simply do the following calculation:
Take your monthly rent, multiply by 200 = purchase price of home
Example: $ 750 x 200 = $150,000
So, in the preceding example, if you were paying rent of $750 per month, you would pay approximately the same amount per month to own a $150,000 home (factoring in tax savings). Now your monthly rent doesn't sound quite so cheap compared to the cost of buying a home, does it?
Even more important than the cost today of buying versus renting, what about the cost in the future? As a renter, your rent is fully exposed to increases in the cost of living, also known as inflation. A reasonable expectation for annual increases in your rent is 4 percent per year
Your Agent and You
After working so hard to find a great agent, it would be a shame to inadvertently ruin the relationship. Good buyer/agent relationships are based upon pillars of mutual loyalty and trust that develop over time.
More isn't always better One common fallacy is thinking that five agents will be five times better than one agent. The more agents you work with, the better your chances of quickly finding your dream home. Things don't work that way in the real world.
- One good agent can quickly show you every home on the market that meets your price, neighborhood, size, and condition specifications. If none of the houses is what you want, good agents keep looking until the right home hits the market. They don't limit their searches to houses listed by their office. Whether you work with one agent or one hundred, you'll see the same houses.
- Agents know that they won't get paid if you don't buy. That risk comes with the job. What agents hate is losing a sale after months of hard work because they called you shortly after another agent called you about the same house. That risk is unnecessary.
- Don't be surprised, however, if good agents in the same area opt out of a horse race. Their odds of getting paid for their work increase dramatically when they spend their time on buyers who work exclusively with them. Loyalty begets loyalty.
Your agent isnot the enemy Another fallacy is viewing your agent as your adversary. Some buyers think that the less their agent knows about them, the better. Such buyers believe that, after agents know why they want to buy and how much cash they have, the agents will somehow magically manipulate them into spending more than they can afford.
- Good agents ask such questions because they need to be sure that you're financially qualified in order to avoid wasting your time and theirs by showing you property that you can't afford. If your agent knows that you're under deadline pressure to buy, she'll give your house hunt top priority.
- Good agents won't betray your trust. They know that if they take care of you, the commission takes care of itself.
- Good agents know that you have the power to impact their careers. If they please you, you'll be a source of glowing referrals for them.
For more information on Fieldstone Group or Scott Elwell, please visit their Douglas Elliman page here.
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