Homebuyer Associates Mobile Menu

Painting by Numbers

“Even if one loses here and there, the point is nevertheless to revive.”

Starry, starry night. Vincent was on to something. His quote frames the picture of real estate today. Many homes looked at. Many offers written. Many rejections received. “The point is nevertheless to revive.”

A lesser artist (me) suggests that if you have been looking to buy a home – or want to begin the process – that you get your brushes and paint colors in order, set your easel and then paint your picture. The canvas may be painted over a few times, but to make the picture, you must paint.

Several respected periodicals speak to the question: Is it better to rent or own a home? We live more and more in a subscription/rental world. In theory, you’d be better off renting and investing the difference in stocks and bonds. I agree. In theory.

It’s a statistical fact that Americans don’t save or invest. Since you can’t retire on “theory”, home ownership remains a foundation for wealth accumulation. My argument is simple: If you don’t save, a home is a forced savings account that will serve you well in retirement. Life is easier with money.

It’s easy to buy a home if you are willing to spend stupid money and waive all your protections. We don’t advocate being stupid. We advocate for making a choice based on information. Full disclosure, you may still pay more than value, but with our approach, you will know how much more and how long you must own the home to get back to even. Those two guideposts are critical to your decision.

How do you paint your picture? You paint by numbers:

1. Determine what monthly payment you can afford: taxes, insurance, principal and interest. Remember, it’s not as if you are spending $300,000. With your down payment, you are transferring money to a different asset.

2. Determine where you want to live and verify that the area is affordable (one of our jobs).

3. Today, (I can’t speak for next week) you will likely pay over value, so know how much more over value and how long you may have to remain in the home to get back to even. The latter will determine if you should pay more than value and how much more.

Notice, I didn’t say over asking price. Asking price and value are two different numbers. The value is most often lower than the ask price, so if you use “ask price” as the base for an offer to purchase, you may be in for a rude awakening.

 4. Offer wars are frustrating. Low interest rates, the   millennial generation, (it’s now the largest   generation) and supply make for a frustrating   process. The point is nevertheless to revive or as   Ex-Coach Holloway would say, “grind it out.” The   grind may give you an edge. If others have stopped searching and you’ve not…edge to you.

5. You won’t find the perfect home, but you may find a home that meets 7 or 8 of the 10 things you want. If you can find a home that needs some cosmetic work, (paint, carpet, etc.) you may have an advantage over others who won’t consider such a home.

In my next news note: Don’t forgo the inspection, be careful about waiving an appraisal and stay away from escalator clauses.

Oh, and Vincent? Van Gogh. I was inspired when I recently attended the Beyond Van Gogh exhibit. See the link below for more information.

BEYOND Van Gogh: The Immersive Experience

Thanks for reading,
Michael D. Holloway

This email was sent to [email address suppressed].
You may instantly unsubscribe , or forward this e-note to a friend.

Newsletter sign-up

Homebuyer Associates
1835 N. Riverwalk Way
Milwaukee, WI 53212
Phone: 414-254-4129