IT’S A HOME, NOT A PIECE OF STOCK!

Reblogger Leslie Ebersole
Real Estate Agent with Baird&Warner Fox Valley

Every home I have bought in 25 years has been because I liked the location, I liked the property, and I liked the house -- in that order. My house is where my kids sleep at night and I retreat from the world. How do I describe this to the person who wants to know which subdivision, street or house type is the "best investment"? Maybe too much focus on the "investment value" has skewed too many people to think future value, rather than current value.

Original content by Donne Knudsen

ATTENTION FUTURE HOMEOWNERS:  If you are currently looking to purchase a primary residence to live in for awhile, please keep in mind, you're buying a home not some piece of stock for your investment portfolio. 

Stop thinking of the place where you and your family will live for many years to come and where you will be making memories that will last a lifetime as some piece of stock that is to be traded on the market for maximum return on the dollar. 

Don't get me wrong, I think it's absolutely vital that a whole laundry list of matters need to be considered before making, quite possibly, one of the most expensive purchases in your life.  However, having said that, how much it's going to appreciate by next year so that you can cash-out and get something better should not be something that affects your decision on whether or not to buy a particular house now. 

I'm sure that the media and all the government spinners want to have you believe that the market is rebounding and it's going to be a banner year next year.  I assure you, that's a pretty lofty dream.  I'm not trying to scare you from ever buying but please know that it's going to take awhile for our market to start to rebound and that means that if you buy a home today, you may not see any appreciation on it for some time. 

However, if you are buying a home where you and your family plan to live for awhile (several years),  then it doesn't really matter what the market does today, tomorrow, next week, next month or next year. 

If you are able to purchase now, you are going to get a great price on hopefully a halfway decent property with a low rate and for many (at least most of my buyers) for less than what you are paying in rent for that dinky apartment.  Furthermore, that low rate that you're getting is going to be fixed whereas that rent payment you're making every month is subject to increase every year. 

So if you are looking for a place to live and raise your children and build a life, think about whether or not it has enough space for the kids to play and grow into.  Definitely think about whether or not you can handle the maintenance.  On that note, I just want to say three words:  HOME PROTECTION PLAN

Think about whether or not you can see your kids playing with the other kids on the street and whether the local parks and schools are walking distance from your home.  Think about whether the local community is an established one with sufficient businesses that you and your family will need to use on a regular basis. 

Stop worrying about how much the value has declined in the past few years.  All of the properties on the market right now have declined in value the past few years.  Quit worrying about whether or not you'll be able to sell it for a profit in a year or two.  If that's your plan, than I strongly suggest you keep renting. 

Quit worrying about trying to "steal" the property for 25% less than list price.  Make a fair market offer and be ecstatic that you got a decent property (hopefully) at a good price.  Quit worrying about whether or not you can nickel and dime the seller to death over some minute matter.  More times than not, you just end up pissing them off and they'll take one of those other multiple offers they got that you are so relentlessly fighting against. 

 

Buying a home that you're going to live in for many years and raise a family and make a lot of memories in is not some commodity that requires at least a 30% return on your investment in order for you to purchase it.  You're buying a home, not some piece of stock.

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Rainmaker
220,681
Debi Braulik
www.roundrealestate.com - Maple Valley, WA
Selling Maple Valley to Fife WA Homes For Sale

Buyers can get a really good deal or they can get a home they can live in and enjoy for many, many years. One of the other. Only in rare circumstances can they get both.  So they need to focus on what's more important to them- the deal or the lifestyle.

Sep 01, 2010 01:23 AM #1
Rainmaker
83,011
Debbie Atwood
Century 21 Real Estate Center Everett, WA - Everett, WA
Real Estate Broker

I've had these types of questions also and it turned out that the emotions got involved and they bought the home of their dreams not the home for the portfolio

Sep 01, 2010 01:30 AM #2
Rainmaker
573,702
Phil Leng
Keller Williams Eastside Market Center - Kirkland, WA
Phil Leng Team - Residential Real Estate Experts &

Hi Leslie,

Very interesting post.

A little long. You could have said it all more succinctly.

However, really good points about buying vs renting, the low interest rates, and a home as a place to live, not just an investment

Phil

Sep 01, 2010 01:38 AM #3
Rainmaker
848,740
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

It is hard for people to purchase something if others will think them a fool.  You are correct but they will have problems purchasing.

Sep 01, 2010 01:42 AM #4
Rainmaker
420,595
Leslie Ebersole
Baird&Warner Fox Valley - Saint Charles, IL
REALTOR - Chicagonulls Western Suburbs

Phil: Sorry you think it's too long but I wonder if you actually read though the first six lines? It's a reblog, which I rarely do, from Donne Knudsen who has a great description of the many considerations in considering home ownership.

Thank you, Donne, for the time you spent on a thoughtful piece.

Sep 01, 2010 02:20 AM #5
Rainmaker
1,635,439
Debbie Gartner
Floor Coverings International Westchester NY & Stamford CT - White Plains, NY
The Flooring Girl - Westchester hardwood flooring

Thx for reblogging.  I missed this one.  Great reblog and great job, Donne.

Sep 01, 2010 05:41 AM #6
Ambassador
1,491,480
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Leslie, It can sometimes be challenging enough to determine what a property might sell for today, much less get out the crystal ball and project future value for a buyer.  Besides, I seem to remember something in real estate class about specifically NOT speculating on future values.  Maybe the best indicator is the school systems, keep them in shape and most everything else may fall in place.  Hopefully this wasn't too long a comment :)

Sep 01, 2010 06:04 AM #7
Rainmaker
1,664,626
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

It is amazing to see the emotion that has been taken out of some of the buyers looking for homes. Some are trying hard to make this an investment only purchase and want a steal because that is all they hear right now in the media. They are forgetting even at a low low price living next to a railraod might not be for them or backing up to a super highway has a real disadvantage. I agree with Liz and Bill that the school system can be a good indicator but choosing a home because you like the home, the property and can see your family living there is so important. It is buying a home not a piece of stock!

Sep 01, 2010 07:49 AM #8
Rainer
147,103
Deborah "Dee Dee" Garvin
W. J. Bradley Mortgage Corp. - Carlsbad, CA
WJ Bradley Mortgage Corp.

Leslie, nice reblog...Donne makes some great points!

Sep 01, 2010 07:51 AM #9
Rainmaker
598,882
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Leslie - I'm glad you liked the post and reblogged it; I really appreciate it.  While I do agree that buying a home is a long term investment, I don't think the "investment" aspect should be the most important reason someone buys a primary home.  I think you stated it perfectly in your intro, buy because you like the location, the property and the house.  If you live there long enough, hopefully it will become an investment for you when you sell to move-up or out.

Sep 01, 2010 12:31 PM #10
Ambassador
519,295
Tom Branch
RE/MAX Dallas Suburbs - Plano, TX
Broker, CDPE, SFR, ACRE, Plano TX Ambassador

While I'm savvy enough to look for a good value, I still purchase my personal homes on emotion. Yes, a home is a long term investment, but you should purchase your home because you like it.

Tom

 

Sep 02, 2010 12:36 AM #11
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Rainmaker
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Leslie Ebersole

REALTOR - Chicagonulls Western Suburbs
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