Top Three Factors To Consider Before You Buy

(Published June 30, 2019)

By Sheetal Balani

In the Summer of 2002, my husband and I purchased our first home together, a gorgeous brick loft in the heart of River North. Though we didn’t necessarily need a two-bedroom place just yet, we decided to stretch the budget and purchase a larger place so that we could stay longer, as our family grew. We lived there for six years; several years longer than if we had opted for the one-bedroom.  

Planning for a family and purchasing a home to create long term wealth is a top motivating factor for many prospective buyers entering the real estate market. When you pay rent, you don’t actually own anything. When you pay a mortgage, you increase your percentage of ownership with every payment you make. If you don’t currently own your home, the concept may seem daunting.  Honestly, it’s all about knowing where to begin.  

At parties, in the elevator, and on my walk across the park to Mariano’s, I often get asked

“When is the best time to buy?” My answer: when it’s right for you. But what does that mean?

Simply put, you should first consider three essential factors: personal, financial, and professional. I’ll elaborate.

Personally – Are you single? In a relationship? Starting or growing your family? Do you plan on living in the same city for the next 3+ years? You’ll want to consider these factors before you purchase. 

Financially – Have you saved enough for a down-payment? Well qualified buyers typically put down 10-20%. Have you spoken to a lender and been pre-approved for a mortgage? Do you have a solid understanding of how much home you can afford? Do you understand what to expect in terms of closing costs? Often I’ll sit down with a first-time buyer to discuss the buying process, and the scenario unfolds something like this: excitedly, the prospective buyer pulls out his/her cell phone to show me the myriad homes they’ve been flagging online. My immediate response is typically the same: Have you met with a lender yet? It’s best to meet with a lender sooner rather than later, so you can hone in on properties that meet your parameters.  

Professionally – Do you have a stable job that allows you to pay your mortgage every month? If you’re on a solid career path and are planning for your future, now may be a great time to consider buying your first home, and reap the many rewards of home ownership.  

After all, you are always going to be paying to live somewhere. You may as well pay yourself, and accumulate wealth along the way.  

Sheetal Balani is a senior broker at Compass, with over 15 years experience in residential real estate. Contact her at (312) 863-9555 or Sheetal.Balani@Compass.com

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