Owning a home means you can build equity, take advantage of tax deductions, and partake in a little something called the American dream. For the past couple of years, the U.S. homeownership rate has hovered around 64%. But there’s also a considerably large pool of renters in the country who have plenty of reasons for not buying. And some of those explanations are totally legit: Financial, economic, or personal limitations can prove that now is not the right time to buy. But we know an excuse when we hear one.
We get it—investing in real estate is a huge commitment. It’s scary and exciting all at the same time. But what if buying actually is in the realm of possibility?
Think of all of the reasons you’ve ever given for not getting into the real estate game. Now allow us to poke holes in those theories.
We asked real estate agents to weigh in on the most common reasons people give for not buying a home—along with their counterarguments to these statements. If you do your research and everything checks out, purchasing property could be totally feasible.
‘I don’t have enough for a down payment’
According to Jonathan Self, a Realtor® at Center Coast Realty in Chicago, most people who say they don’t have enough for a down payment have no idea how much money they would even need.
“Most people who tell me this have not spoken with a lender—it’s rare for people to go to a lender before their agent,” he says.
So, the first step is to find a reputable lender. This can help you set your goals and put you on the path to homeownership.
Yes, there’s certainly a chance you won’t have enough for a down payment. Yet, on the other hand, you might not need as much money as you think you do. Or, your financial snapshot will qualify for loans that don’t require a large down payment. But you’ll never know unless you reach out to a lender.
‘I need to save more money’
For some, it makes sense to wait and save for a down payment, future mortgage payments, or home repairs. But as home prices edge higher, so do rent costs. That’s why buying might be a better decision than renting.
“The rent you’re paying could be converted to investment in equity,” says John Manning, managing broker at Re/Max on Market in Seattle.
Talk to a lender to see if you qualify for a mortgage. Most agents are willing to match potential buyers with mortgage professionals.
“There are mortgage products for almost every financial scenario,” Manning says.
‘I’m locked into my lease’
This is a common excuse, especially among first-time home buyers, according to Heather Sims at Ebby Halliday Realtors in Dallas. “My response is always, ‘Let’s find out what the penalty is for breaking that lease.’”
She says there’s often no penalty at all if your property management company is able to find a tenant to rent out the unit.
“Other times, it’ll be one month’s rent. In the grand scheme of things, that’s not very much given how much money you’re saving (and investing) by buying a home with a reasonable mortgage rate,” Sims says.
In some situations, the sellers will need to lease back the home as they search for a new home. In these instances, Sims says, it’s easy for buyers to recoup the cost of breaking their lease.
‘I might move away’
Many of us haven’t found our forever town or city yet. That’s fine. The possibility of relocation is a valid reason for holding out on purchasing a home—unless you’ve been saying that for years. The truth is, not investing in property could mean you’re leaving money on the table.
In some areas, mortgage payments are comparable with paying monthly rent. If that’s the case in your neighborhood, it might be wise to buy.
“Even if you have to get out of town before your four to five years of equity has built up to help you break even, you could rent [out] the home and continue to get equity from the tenants,” says Self.
‘I’m waiting the market out’
It’s a seller’s market. Or is it a buyer’s market? Buyers often use this confusion as an excuse to wait out buying a house because they believe they’ll be able to get a better deal in the near future. Markets are cyclical, and it is usually prudent to purchase when there are more sellers than buyers.
“However, there is a good chance your money isn’t doing much for you in your savings account,” Self says. “No one has a crystal ball, but I know people who have been waiting for years so they can jump in at the right time.”
Manning agrees: “Many people will never manage to outsave market appreciation and can lose purchasing power if interest rates trend upward.”
‘I’m looking for the perfect house’
Everyone is looking for the perfect home, but if you’ve been searching for years, and you’ve viewed hundreds of homes to no avail, you may need to tweak your expectations. It’s one thing to prefer a move-in ready home over a fixer-upper, or three bathrooms over two, but sheer perfection is hard to find.
“From my experience, buyers who are looking for a perfect house will never find it, because a perfect house doesn’t exist, regardless of the price,” says Russell Volk, a Realtor at Re/Max Elite in Huntingdon Valley, PA.
If a house has eight of the 10 features on your wish list, it’s seriously worth considering.