Why Buying Less is Often More

At parties and other social events, after people exchange information about their families and where they live, the conversations typically drift toward ‘what do you do for a living?’ After I reveal that I am a realtor, I am usually asked a question which I am sure every other real estate agent gets asked in similar circumstances: What’s going to happen to real estate prices next Spring/ Fall? Will it be a good time to buy?

The truthful answer is – I don`t know. In fact most people don`t know – not economists, statisticians or real estate professionals. There are simply too many variables that affect the housing prices.  From local influences to fallout from political and economic events happening elsewhere in the world.  At best, all they can do is predict longer term trends. In all honesty I cannot tell you with any degree of certainty what`s going to happen to prices for instance in your neighbourhood in Richmond Hill at precisely the point in time when you want to sell or buy. But I do have a response which I believe is very responsible. Buy at a time that is the best time for yourself, that best fits your personal circumstances. Go ahead with the transaction if:

a)      Your personal situation is stable or at least somewhat predictable.
If you hate your boss and are thinking of changing your job would not be a good time to buy. One major change in life is probably stressful enough. As well, you want to focus on your job search. After you have established yourself at work, then by all means take the plunge.

b)      b) Your finances are in good shape.
As with most of us, one`s finances could always be better at any point in our lives but the basics should be in place:
- a predictable income with some degree of stability. 
- reduce or if possible eliminate your existing debts before you take on a mortgage.
- ability to put down a substantial deposit.
All that with the objective of making your monthly payments as small a proportion of your monthly budget as possible. The overall objective is to make yourself as `financially resistant` to what life can throw your way as possible.

You will be grateful for your financial conservatism in the future when the novelty of owning a house has long worn off and other priorities have become more important. For example, and these are all cases that I have encountered over the years: on the personal side, an unexpected medical expense, illness of an aging parent, your children`s school or after school activities expenses. On the economic side, a rise interest rates resulting in higher monthly payments, sudden increase in commuting costs – newly installed road tolls, an increase in gasoline prices due to world events, increase in cost of public transportation.

Opting for a more modest home at a lower price with a larger disposable income that will allow you to live a lifestyle of your choice, with as little financial stress as possible is my best advice on your real estate purchase.  

Peter Diamant, your Richmond Hill specialist. Outstanding service, proven results backed by dozens of referrals and years of experience in buying and selling homes and condos in Richmond Hill. In addition, I also enjoy a great deal of support from my clients at two condo complexes where I have listed and sold a lot of units:  Townsgate Condos and Primrose Condos.