William's Blog...with a smile!

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What if you get sick...?

I had a young couple looking for their first home.

The bank OK'd them for a dollar amount.

So this couple was looking for a home in that price range.

 

I asked them  at that price if one of them got sick for a few days, would they still be able to afford their payment.

"It would be tight, but we could."

 

Ok , next, do you have a lawn mower?  How about Rakes, Shovels ect.

 

"No, we live in an apartment."

Ok, just because the bank says you can buy this price range, it may not be the smart thing to do.    Let's look at some options.

 

Buying at the top of the price range the lender says you  can does not mean it is the smart thing to do.  You need to look at the entire picture.  Additional costs, getting sick, getting hurt.   Increase in taxes.

Think hard before you decide to jump in at the full amount.  You don't want the house to control you.

 

Comment balloon 30 commentsWilliam Feela • July 30 2017 01:35PM

Comments

Good advice William Feela - they are lucky to have someone who looks at the bigger picture in finding their new home

Posted by Mary Douglas, REALTOR, Red Feather Lakes, Colorado (United Country Ponderosa Realty, Red Feather Lakes, Colorado) about 2 months ago

Good morning William. You are a good guy and this is on the money for sure.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 2 months ago

Hello William,  Some times we need to explain thinks to the first time home buyers that they would not know.  Good Job!

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) about 2 months ago

Good morning William Feela ,

Excellent advice. I always ask if they want to be married to a house payment? It can strangle your life still by buying at the top of what you can afford.

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) about 2 months ago

  We almost never see anyone buy what they "could" which is a very good thing !

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce - Short Sale (Keller Williams 414-525-0563) about 2 months ago

I see it often, but many do not want to listen William Feela 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) about 2 months ago

Being mortgage poor is not what I try to make my clients become William Feela 

Posted by Paul S. Henderson, CRS, REALTOR®,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) about 2 months ago

Good advice to all buyers out there. Just because you can doesn't mean you should. Have a great week William!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) about 2 months ago

William- so kind of you to point this out. I can remember our first house and spending a small fortune at Home Depot and Target for all of the items we didn't need in an apartment. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) about 2 months ago

Great advice, William Feela .  Rarely a good idea to be at the very top of your qualification. Unexpected things can happen and before you know it, you are missing payments.

Posted by Lynnea Miller, Premier Real Estate Service in Central Oregon (Bend Premier Real Estate) about 2 months ago

The smart ones listen to us, the others will struggle.

Posted by Vern Eaton, Realtor 651-674-7449 about 2 months ago

                

                     Thank you William Feela 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) about 2 months ago

Good morning William.  This is great advice and really should be discussed with all first time home buyers.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 2 months ago

Good morning William Feela ,

I stopped back this morning to tell you I'm so glad Kathy Streib featured you post in her "Ah-ha" moments for the week! More agents should be helping their first time home buyers like you do.

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) about 2 months ago

Good morning William. Once the bank grants approval, the real econimic issues must be explored! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker (Wayne M Martin) about 2 months ago

William, your buyers are lucky to work with you, as you point out those things that are not usually factored in immeadiately.

Posted by Steffy Hristova, Tempe AZ Realtor - Your Home Close to Your Work! (HomeSmart Elite Group Tempe AZ Tel: 480-966-9353) about 2 months ago

Hi William

Buyers always need to consider their personal budget, and all the costs associated with buying a home, and not just what the lender says they can borrow, especially first time buyers who might not have the broader focus they should.

Jeff

Posted by Jeff Dowler, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) about 2 months ago

I can see why Kathy chose to highlight your blog post today!  Great stuff!

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) about 2 months ago

When I bought my first place, I was very uncomfortable buying at the top of my price range.  Having that room for the unexpected in a budget is a smart move.

Posted by Chris Ann Cleland, Associate Broker, Northern VA (Long and Foster REALTORS®, Gainesville, VA) about 2 months ago

VEry wise counsel William Feela - very wise!  It's best to have that 'talk' with 1st time home buyers so they don't get in over their head.  Excellent post!

Posted by Anna Banana Kruchten,CRS,CRB,GRI, Arizona's Top Banana of Real Estate! (Phoenix Property Shoppe) about 1 month ago

As in every other situation, every decision should be thought through. Research & prepare to avoid stress. 

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) about 1 month ago

So wise - Home buyers should also consider the fact that the lender doesn't know what other things in life are important to them. Do they relish being able to attend concerts, eat at 4-star restaurants, or take a trip each year? Do they have a child who wants music or dance lessons - or to attend an expensive summer camp?

Each person or couple should examine the ways they like to spend money before buying a home at the top of what the lender says they can afford.

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) about 1 month ago

Hi William, being a numbers guy it is important to review all these aspects with buyers and in particular first time home buyes.

Posted by Gary 'Banana' Houghtaling, Phoenix Real Estate Agent (Phoenix Property Shoppe) about 1 month ago

Smart stuff, William Feela. This is a lesson so many buyers seem to miss. It seems what the lender suggests "they can afford" overshadows living in reality.

Thanks for sharing.
Bruce

 

Posted by Bruce Kunz, REALTOR®, Brick & Howell NJ Homes for Sale (C21 Solid Gold Realty, Brick, NJ, 732-920-2100) about 1 month ago

I love when buyers say, "I'm pre-approved for $xxxK, but I don't want to spend that much - I only want to buy at $xxxK." Those buyers have thought through this very issue!

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) about 1 month ago

So many expenses to consider when deciding on what price home you can afford. Great advice!

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) about 1 month ago

wise words for home buyers to think about before jumping in to home ownership. I see this so many time in my work, home owners not being able to maintain their properties to keep the value of their home at the top end of the market.

Posted by Michelle Finnamore, Preparing your property for sale (Vaughan and Toronto GTA) about 1 month ago

William Feela -  indeed we should inform the buyers of all the additional expenses, too. There is a lot to the pre-approval amount! What if one gets sick?

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) about 1 month ago

This is excellent advice. It's no fun to live house poor.

Posted by Cheryl Dukes . . . . . Intown Atlanta (Solid Source Realty, Inc.) 22 days ago

Agree.  I always tell first time buyers that they need to be sure they can cover expenses; should one of them lose a job. Shocks them into reality of being more conservative.

Posted by Sharon Altier, SFR (Lawton Realty Group, Inc.) 22 days ago

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