Should I Rent or Buy? | DFW REAL ESTATE | the Wells Team

It?s the question I get asked all the time. Everyone wants to know what they should do. Well, it?s not a simple answer. Each family has a different set of goals for their next home. I?ll do my best to tell you what the market is doing, where interest rates are and home inventory. Once that?s done, you should have the knowledge you need to make an informed decision.

Standard Disclaimer

Let me be very clear, this information will get stale like month old bread.?Its?current for April of 2012 in Collin County and beyond that, all bets are off.

Supply and Demand

Unfortunately there are many families that have lost their homes. Many of them want to stay in the same school district and really don?t want to move into an apartment. The only viable alternative is a lease home. As more people begin leasing homes, the supply is reduced. With more demand for nice homes and fewer of them available the price is going to increase. Its simple economics and what we are currently seeing.

It?s going to be continually more expensive and there will be less desirable properties available than over the last few years.

HousingWire recently quoted Paul Dales, senior economist with Capital Economics:

?As a consequence of Americans being less willing and less able to buy a home, the number of households in rented accommodation is set to rise by at least 850,000 a year over the next few years.? ?

Cheap Money

Interest rates are extremely low right now and banks are lending money. If your credit score is 640 you can usually qualify for a FHA loan if you have a clean history. You will need your 3.5% down payment and other factors apply, but it?s a heck of a time to buy a home. You need to contact a mortgage expert to find out where you stand. If you have a few problem areas, don?t lose heart. Many times they can be addressed and quickly corrected. If you don?t have a mortgage agent, give us a call and we will point you in the right direction.

Short Sales and Foreclosures

You can increase your good fortune by combining a low-interest loan with the purchase of a foreclosure or a short sale. Either one of these types of purchases will be 20% less on average below an occupied home that is not in distress. You may need to do some repairs and updating, but who is afraid of a little sweat equity. Ok, that?s not fair; as I get older I like to do less of the heavy lifting and just hire it out. You need to determine what your comfortable with. Not everyone should purchase a home that needs lots of updating or repairs. Keep in mind a distressed property that is in awesome shape is not going to go for a huge discount. Usually you will have a home that needs work, lots of it.

Overall Cost

One huge advantage to purchasing a home right now is that it just costs less in the long run. When you lease a home, your monthly payment does not build you equity. When you purchase a home your build equity in that home.

So What Should I Do?

Only you can answer that question for your family. I will try to lead you in the right direction, but?Caveat emptor.

1. If you do not have a minimum down payment of 3.5% in cash in the bank; buying is not for you.

2. If you do not have a minimum credit score of 640 buying may not be for you.

3. If you can not produce financial documentation and work history documentation; buying may not be for you.

4. If you have had a short-sale with in the last 2 years, a foreclosure within the last 7 or a bankruptcy; buying may not be for you.

5. If you are moving to a different area in the next year or two; buying might not be a good idea.

Now, if you have cleared all those items and are still with me, then it?s a great time to buy. Home prices are on the rise in many areas of Collin County. We are seeing homes sell for asking price and they are getting multiple offers, so don?t think you are going to low ball someone on a beautiful home and win. You won?t, its turning into a seller?s market, so don?t wait to long or you will lose this golden opportunity.

The good news is money is cheap, really cheap and that lets you buy more home for less. The are still tons of good deals out there, so pick up the phone and call us today and we will answer your questions and see if buying or leasing is the right option for you.

Well, I hope this helped some of you in making your decision. Owning a home is an amazing feeling, if there is anything Deb or I can do to help, just call?

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