Concerned about buying?

This question was raised by a client of mine in a recent e-mail. I'm sure she's not the only house hunter with this concern. I thought it would be informative to post it here along with my response.

"I have to say, this financial "crisis" situation has me scared silly. I'm watching my stocks plummet, my down payment money disappearing, and the future forecast of economics in this country is just plain scary. I feel like it's just the wrong time to buy, but everyone says it's ok, go ahead and buy a cheap place. What do you think?"

You have reason to be concerned about the current market conditions. What we're seeing going on has never happened in this country before. In a way, it's exciting being right in the middle of history being written.

Is it the right time for you to be buying? Yes, because you are personally ready to become an owner. The property you buy is primarily a place for you to live. When you find a place you can see yourself living in with a payment that you are comfortable with just go ahead and do it. You'll have to pay rent somewhere anyway, so why not pay for a mortgage instead? Chances are the property value will go up over time but if it doesn't? You still had a place to live. You're not speculating, buying a house with the intention of flipping it. You are buying a home and you are not going to buy something you can't afford. Relax and find something you like.

Don't buy something just because it's cheap. You'll end up with something you're not happy with. Find something you can see yourself living in for the foreseeable future. Buying a home is a lot like buying anything else. If you buy solely on price, you end up disappointed. You need to strike a balance and buy something that you see the value in. Value is a combination of size, location, layout, condition and price. The decision is a personal one; the property needs to feel right to you.

Being concerned is a good thing. It keeps your thought process grounded, helping you make rational decisions. You can't allow concern to grow into panic resulting in an inability to move forward with your life. Balance market conditions with your personal financial situation and develop a plan of action from there. You may decide to buy now or you may decide to put off buying. The choice is yours. All I suggest is that you look at all facts and come to a logical decision, not an emotional one.

Take charge of your life, leading it in the direction you want to go. Don't become a lemming and blindly follow the leader off the edge of the cliff.