Is this a good time to buy or should I rent for a while?

We frequently are asked if it is better to rent or to buy.

The answer to this question really depends on the individual asking the question.  We always suggest a 20-30-minute consultation either over the phone or in person or these days a Zoom Meeting (online virtual meeting). Some questions that we ask the Renter/Buyer are:

1. Have you ever been a homeowner?  If so, did you enjoy being a homeowner?
2. Have you been a tenant and if so, did you rent from an apartment complex corporation, a property management company or a private owner?  What was that experience like for you?

We learn a lot from our past experiences (or at least we should, right?) and finding out from the clients if they had a successful experience in one or both living arrangements is very helpful for this process.  For example, if they had a terrible experience as a tenant then renting may not be for them.

3. We then ask what would be an affordable monthly payment for housing.

The next discussion we have is on the current real estate market.  We like to map out in simple terms what is happening in the current market.  Inventory, Supply and Demand, Buyer or Seller Market…

Inventory-How many homes for sale but also how many available rentals

Supply and Demand if there are more buyers than there are homes to sell them; supply is low but the demand is high.  When the supply of homes is high and demand is low this means there are less buyers in the market to buy.

Buyer or Seller Market In a buyers’ market there are more homes on the market than buyers to buy them, the buyer has a greater opportunity to negotiate with the seller on price and terms but in a Seller’s market with the low supply of homes on the market and more buyers still wanting to buy, buyers end up competing with other buyers for the same home and prices are being driven upwards.  The buyers may end up paying more than what the seller was originally asking for the property.  Word of caution:  Get an appraisal!

All of that sounds really boring however, we make it very interesting by showing listings and sold properties from our local multiple listing service.  Virtual tours and all!

While we are showing all of these properties, there are a few more questions:

4. What are you looking for in a home? Bedrooms, bath, garage?
5. What amenities would you like to see in the neighborhood?

 Pets are important to us!  If renting, some pets may not be allowed on the property but if allowed there will be fees involved.  If going into homeownership, we can help you research what type and how many animals are permitted in the area or subdivision.

 What about us?

We can take a look at rentals in the area.  The listing service provides some available rentals to search virtually.  We also have a list of Property Management Companies and their websites for other rental properties.

Usually by this time the customer’s needs and wants are clear on which way they want to move (pun intended), either towards buying or renting.

If it is to purchase a home, we begin by preparing them on the home buying process.  We provide a package of materials that even includes flow charts to easily follow the process.  We use this same chart throughout the transaction so the client is always aware of what has been accomplished and what is left to do.

The next step is to find out how much home the client can comfortably afford.  The client needs to be prequalified.

  Prequalification is an initial evaluation of an applicant’s ability to qualify for a loan. Prequalification is used in the mortgage process to give lenders an idea of how much a person can borrow and what kind of loan terms they might qualify for.

 Our standard of practice is to first find out what price the buyer can afford and is willing to pay for a home before we start showing them properties.  It would be irresponsible of us to show properties to buyers that they can’t afford, this is unfair to both the buyers and the sellers!  We have found that most of our clients know what they are comfortable paying each month (see questions #3) for a home.

In our Buyers Package we have a list of excellent lenders that we have either worked with in the past or other people have highly recommended.  Sometimes we will call the lender while we are meeting with the buyers to schedule an appointment to begin the prequalification process.  Many lenders can take some basic information on the phone and an application can be completed online.  We always recommend lenders that can communicate well and that provide excellent customer service.  We require constant updates on the loan process from the loan officer to confirm everything is running smoothly and when under contract it is critical to track for risk management.

Working with the right lender is important to put the buyers in the right loan for them.  Loans should not be one size fits all!    Some buyers may be able to take advantage of special programs such as first-time homeowners may be able to obtain a loan with a very low-down payment, there are also down payment assistance programs and programs for our veterans.  If eligible, a veteran may get into a home with no down payment at all!

A good lender will also keep in touch and assist buyers who have some credit repair, or other issues that are keeping them from obtaining an acceptable loan.

If the buyer does have some issues it could be a few months or longer before qualifying for a loan, so renting is the only option.  In this case, we have several excellent property management companies that can assist them with the best services in town.

If the client’s goals are to be a homeowner then we want to keep in touch for support and encouragement.  We want all of our clients to reach their goals.  When the buyer is ready, we begin the home search.  It is so exciting when the buyers, after working so hard, get to move into their dream home!

But home ownership is not for everyone!  I remember a husband and wife that were so stressed about homeownership that they decided to sell their house and have been renting happily ever after!

    Honey, the faucet is dripping in the upstairs bath and the house needs painted!

Some of the advantages of renting instead of buying:

1. Most repairs can be taken care of by placing a call to management
2. Depending on the market and the buyer, rents might be lower than a mortgage

3  Some apartments have amenities that are included in the monthly rent.

4. The monthly rental payment fits the monthly budget
5. Credit issues can be resolved while renting.

In conclusion:

                                          Rent                                        vs.               Purchasing a Home

Going back to the beginning, the answer to the question, “Should I rent or buy” is a personal decision.  In our Free Consultations we give you enough information to make a great decision and plan for YOU!

Let us help you today!

About the author: The above Real Estate information was provided by Cynthia Yannitelli, of the Yannitelli Group at Better Homes & Gardens Real Estate, BloomTree Realty.  Cynthia has managed real estate brokerages and trained real estate agents for over 20 years and started her real estate career over 30 years ago.  The Yannitelli Group is Cynthia and her sons, Neil and Nicholas, in a family-owned real estate group enjoying what they do and working with each other.  Cynthia and the Yannitelli Group can be reached via email at yannitelligroup@gmail.com or by phone at 928-251-0025.  

Call to schedule your Free Consultation  (928)251-0025