By Ross H. Yednock
In an article in the March – April, 2021 edition of the National Association of Realtors starts out “Homeownership is the largest single contributor to intergenerational wealth for American families. But it has not been accessible to all Americans on equal terms.” In a nutshell, that is why I became a real estate agent. I want to change that and help anyone who seeks a clean, safe and affordable place to call home achieve that for them and their family.
For many people, buying a home is the largest purchase a person will make. It can be stressful and emotional. It can also be confusing and scary, especially if it is your first time buying a home (or first time in a while) and are uncertain of where to begin. That’s why I am writing this column. I want to help TNCP readers who want to own their own home make it happen.
The first decision you should make on the way to being a homeowner is do you really want to do it? This is the most important thing to consider. As a realtor and advocate for homeownership, I believe the benefits of homeownership are many. It can be cheaper than renting, build long-term wealth, improve credit scores and provide a safe and positive place for you and your family. Personally, there is no better feeling than to help a family buy their first home.
However, homeownership is not right for everyone. And that is all right, too. If you are not ready financially, or capable of managing the very real responsibilities that come with home ownership or just simply do not want to be a homeowner, then instead of being a dream, becoming a homeowner can be a nightmare.
The two greatest challenges for first-time homebuyers are knowing the real financial commitment of buying a home and the ongoing costs associated with homeownership. To start, buyers need to have enough money in hand to cover the down payment (which can be between 3-5% of the purchase price), another $350-$500 for an inspection, and money for closing costs that can be an additional $1,000 – $3,500 (or more). In other words, if you want to buy a $100,000 house, unless you are able to qualify for some down payment assistance, you will need to have about $7,000 to $9,000 of cash, in hand.
Then, when you become a homeowner, the costs do not stop. Often, when you own a home, it can feel like there is not enough money to take care of everything you want to do. On the fun side, having enough money to paint and decorate your home, or buy new appliances for the kitchen that you get to pick out is gratifying. But on the not-so-fun side, you may have to pay to fix a clogged drain, replace broken windows, fix or replace a roof or gutters. No one ever has fun dropping $400 to pay a plumber to snake a drain. As a renter, you typically do not have to pay for things like that if there is a problem, but these are costs you may have to pay on top of monthly mortgage and utility costs.
Also, when you own a home, you are responsible for making sure you take care of it. There is no end to your “to-do” list. Cutting the grass, painting wood on the outside, paying to tune your furnace, cleaning the gutters, shoveling the snow, and on, and on, You have to do these things not just to make your house look good for other people, but because cities have weed and lawn ordinances, or require sidewalks to be shoveled. Not cleaning your gutters or fixing outside paint can lead to water getting in the basement, or the soffit getting damp, which can lead to squirrels making a nest in your house, or wood-destroying insects. This will lead to more expenses, and if you don’t have enough money in savings then it can really be a nightmare.
So the first question you need to ask yourself is: Do you really want to be a homeowner? The benefits are great, but not if you do not want to take care of it and there is nothing wrong with saying, no. While you are deciding if you have any questions, please feel free to contact me.
Ross has been a realtor with Century 21 Cedarwood since 2016. You can contact him with any real estate questions at [email protected] or 517.204.5200.