Three Scenarios to Pave Your Path to Homeownership
There are three relatable scenarios and viable next steps to sweet, sweet homeownership. If you’re a millennial, you’ve probably spent a lot of time wondering when and if you should make the next move towards homeownership. You’ve read the articles that say how much money you can save as a homeowner. You’ve seen the ads that tell you anyone can do it. But if you ask us, it’s not enough to simply tell someone to “buy a house” because everyone’s path to homeownership often begins a little differently. To support you on your path, we’ve selected three common scenarios and provided our best advice to begin the purchasing process.
Scenario 1: Rising Rent & Student Debt
Here’s the situation: You’ve been renting for years because you’re focused on paying your student debt and saving money. However, every year your rent goes up 3-5%, and the longer you wait to buy a place, the more inflated the market becomes. You’re starting to worry that if you don’t make a move soon, you’ll spend all of your income paying for someone else’s mortgage, making it harder to pay your debts and build wealth in the long run.
Steps for Success
Start by minimizing avoidable debt and overspending by creating a budget, adding to your emergency fund, and keeping your credit cards paid off.
Create a plan of action for paying down your debt. We recommend following a method like the Rollover Formula or the Snowball Method to simplify the process.
Start the Realtor® search. Hint: Start by reading our post. “5 L’s of Exceptional Realtors®” and downloading our Realtor® questionnaire for your first agent interview.
Scenario 2: Growing in Love & Life
Here’s the situation: You live with your partner, and your place has started to feel smaller and smaller since the beginning of the pandemic. Between the rise of remote work and the extra time you are both spending at home, you’ve recently gotten the urge to upgrade your space to make more room for the next chapter. However, a larger place with more amenities means a significant increase in rent and even less flexibility and autonomy over your space.
Steps for Success
Have the money talk with your partner (married or not) to determine how much debt each of you have, how much you are spending and saving each month, and your shared purpose behind a potential real estate investment. Getting on the same page is a crucial first step.
Narrow down your list of needs and wants in a first home, so you know each other’s non-negotiables. This will help you a lot down the road and save valuable time throughout the search process.
Work together to create a cohabitation property agreement to agree on the following: type of ownership on the deed, percentage of the house each party will own, payment responsibility, and a viable exit strategy.
Scenario 3: Saving up to Put Money Down
Here’s the situation: You’ve been renting for years, and you’re an avid saver. However, the pandemic has presented many unexpected costs and has made you feel worried about using a chunk of your cash for a downpayment in the event you might need it for an emergency. On top of that, the market is more competitive than ever, and you don’t have a resource to help you navigate the best path forward for you.
Steps for Success
Start by focusing on saving 3-6 months’ worth of living expenses in case of an emergency. We know there’s a tendency to feel like you’ll never have enough saves, but this is a good starting point to provide you that much-needed wiggle room when life happens.
Set realistic expectations for your first home. As mentioned previously, the market is ultra-competitive right now, so it’s extra important to be prepared and know your needs from your wants.
Consider your short and long-term goals for your first real estate investment. Are you in it for the long haul and hoping to live in your first home for several years? Or are you interested in eventually expanding your portfolio and renting your place out? Determining these goals upfront will largely influence how you approach the buying process.
The path to homeownership may start differently for everyone, but we are committed to ensuring they all end the same; with a happy homeowner and keys to a new house! No matter what your situation is, we can help you reach your goals with The Blakemore Real Estate Purchasing Pathway. With this step-by-step game plan, our clients know exactly what to expect from our initial consultation all the way through the closing of their new home.
Want to take a peek?
Download our “36 Steps to Buying Your Home” list now.
