Buy vs. Rent Option

MAKING THAT IMPORTANT DECISION…
IS THIS THE RIGHT TIME TO BUY A HOUSE?

Perhaps you’ve heard the University of Florida Research statistics which rate the Panama City and Bay County area as one of the top areas for investment potential in the State. Or maybe you have heard horror stories of a relocating homeowners who were unable to sell their homes. No doubt renting a home is often an easy option as the years go by. This makes you ask yourself whether or not to take a closer look at home ownership when faced with the decision yet again. Will owning a home save money on your income taxes? Will monthly housing expenses benefit you and your future financial security, or is the risk of loss sufficient to compel you to consider paying rent for the benefit of another landlord?


Home ownership is not the best choice for everyone, but many renters are seriously weighing their options. More than a million families become homeowners in the United States every year. Staff members at Neubauer Real Estate understand the concerns that prospective homeowners face. With one of the largest inventories of rental properties and homes for sale, we are prepared to help you explore the alternatives so that you can make the decision best for you.

Consider these questions asked frequently by many renters:

__ Will I live in the Panama City area for the next three years or longer?

__ Is my income likely to remain stable while I live in Panama City?

__ Do I have several thousand dollars in savings and/or a VA mortgage eligibility?

__ Would a mortgage lender consider my credit history to be satisfactory?

__ Do I feel remorse every time I write a rent check, knowing it’s money down the drain?

__ Am I tired of asking the landlord to make repairs, or for permission to paint or decorate?

__ Is the selection of rental properties too limited due to my desire to own or keep a family pet?

As a general rule, home ownership may be a risky option if you think your stay in Bay County will be for less than three years. This is also dependent upon the real estate growth rate (if any) during that period, the equity you build, and market conditions when it’s time to sell. Sooner or later you’ll be faced with a decision to either sell your home or hold it as a rental investment.

If you’re uncertain about the stability of your employment, any home buying decision should probably be postponed. Some accumulation of cash is certainly necessary, however many people mistakenly assume that substantial cash reserves are required to buy a home. Down payments can range from – 0- on VA financing to as low as 3% on FHA or 5% on conventional mortgages. Closing costs and other associated charges generally range from 1% to 6% of the sale price.

Home ownership can offer several obvious advantages. Earning equity in a home is an important step toward personal financial security and is a stepping stone to a larger and finer home should appreciation in value take place. Appreciation is a relatively traditional phenomenon resulting from a variety of economic influences, many of which are present in a fast growing area like Bay County. The principal portion of each monthly mortgage payment reduces the mortgage balance also and builds equity in the property.

Timely payment of a home mortgage is one of the best ways to demonstrate your financial credibility and enhance your credit rating. Interest and property taxes are deductible expenses that will reduce the “real” cost of home ownership, a major advantage over paying rent.

Perhaps the most compelling reason for choosing home ownership is the everyday lifestyle benefits. Improvements can be made without a landlord’s consent. You can have a pet, repaint or wallpaper rooms or enjoy creating your own landscaping ideas, all of which can be a benefit to you when it comes time to sell.

TAKE A HARD LOOK AT THE FINANCIAL ASPECTS

Comparing home ownership to renting involves more than just comparing the monthly rent and mortgage payment. The tax benefits, both long and short term, should be carefully weighed. If you could own a home for less than it would cost to rent, the decision to buy would be easy. What if home ownership actually costs more? You must decide if the extra funds spent each month are a worthwhile expense in order to buy an opportunity for equity growth, improved credit and lifestyle control.

BECOME FAMILIAR WITH THE BAY COUNTY REAL ESTATE MARKET

When it’s time to start looking for a first home, the entire process may seem a bit confusing, perhaps even intimidating. The sales executives at ERA Neubauer Real Estate, Inc., will patiently counsel, guide, and assist you, and without any cost to you whatsoever. Time will be taken to complete a financing pre-qualification and to view the properties of your choice from the entire Bay County home inventory available through the multiple listing service. When you find the home you’re looking for, a qualified staff member will clearly explain all details of financing and guide you through the offer and negotiating process. Later, you will be assisted with the closing details of the transaction and receive guidance on property inspections and other important matters. A good starting point is to review the real estate terms in the glossary. Throughout the process, it’s always beneficial to ask questions about these terms. Your associate will be happy to provide you with answers. Buying a home can be simple and even enjoyable.

DON’T SKIP IMPORTANT STEPS

Let your agent and mortgage loan originator do his or her job. Pre-qualification is an important part of the process, it’s not complicated or time-consuming, and can save you a considerable amount of time and money. Discuss the various types of mortgages available and the advantages of each. Take the time to get all of your questions answered. Review and discuss properties and neighborhoods before looking at the entire market.

MAKE AN INFORMED DECISION At some point, almost all buyers have some doubt about the decision they have made. This is generally true about all major purchases and is evidenced by that sudden “what have I done?” feeling. The phenomenon often takes place when you’re signing an offer to purchase, writing checks for substantial amounts, or signing sale contracts or closing documents. The feeling is so common that it is often referred to by people in various sales fields as “buyer remorse”. Please remind yourself: You’ve moved carefully through the entire process, the lender has given you sound financial advice and pre-qualified you for an affordable mortgage. You are not making a rash decision- but a major one. Remember, you’re investing in your future.