Fogging up the mirrors

I have the greatest respect for people who choose not to be parents. There is incredible pressure all around them to conform to what is considered the norm, and for a variety of reasons they decide to be non-conformists. My daughter is one of these people, and I respect her decision. It’s intelligent to consider this prior to having the child.

And this made me think of something that I feel happens in real estate. Not everyone should be a homeowner, or not everyone is ready right now, regardless of interest rates and available inventory. I had three separate issues come up this week alone that reminded me of this.

The one which I will share was about a listing I have- a bank-owned property that had suffered from neglect and freeze damage. Some of the damage was repaired, but I wasn’t certain the extent of it. An interested buyer called me and requested placing an offer, and of course I disclosed this information. I had his mortgage person run me a preap, and it came back contingent on several items that I had told the buyer may be problems, among them being the heating system.

I told the mortgage officer this, and told him that this property was being sold as is. Apparently, this buyer had an issue with reserved funds. The mortgage officer asked me to “Please advice” (sic).

Fair enough. I have issues of my own with reserved funds from time to time. But selling this buyer the home would be plain irresponsible, to my way of thinking. Possibly everything would work out, but more likely I would get the listing back as another bank-owned property a year or two down the road.

My advice? Make sure you have enough money in the bank to cover a couple of months’ worth of mortgages. You don’t know what can happen, and at least you will have that roof over your head. Hard? Sure, but not as hard as trying to find that money if you are too sick to work, or get laid off, or need to take time off to care for a child.

Do a home inspection, even if it is for informational purposes only! I know you want the house, but if you start out over your head in unexpected repairs, you run the risk of becoming a statistic, and that’s a number I don’t want to see get any larger. Use the home inspection as a tool, even with an as-is property: highlight the big-ticket items and make sure you will be able to take care of them before they become bigger-ticket items.

Homeownership is similar, in my opinion, to being a parent. Most days it is great, and there is nothing like finally burning the mortgage paper when you pay it off, so they tell me- probably the same feeling you get watching a child graduate from college. But if you aren’t prepared- if you haven’t thought out who is going to watch the toddler when you have to go to work and she has croup, if you haven’t considered school vacations and broken arms and stomach bugs- you aren’t looking at the whole picture. Does this mean you shouldn’t be a parent, or a homeowner? Probably not, but education and a safety net can make things a hell of a lot easier.

In Massachusetts, education and information on lower-cost mortgage interest can be found at this site.

Federal First-Time Homebuyer Credit click here (thanks to Patrick Harding)

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