Why You SHOULD NOT Buy A Home

Here's why you should NOT buy a home, and what you can do to avoid the largest home buying mistakes - Enjoy! Add me on Instagram: GPStephan

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These are the reasons you should NOT buy real estate:

ONE: If you’re not prepared for the down payment.
That’s because there’s this ONE term that almost no one considers when they buy a home: OPPORTUNITY COST. I would go on a limb and say that almost everyone who REGRETS their home purchase, which is roughly 44% of adults - didn’t do the math, AHEAD OF TIME, to make sure buying a home was really in their best interest…and while there are a LOT of situations where it DOES make sense to buy a home…it doesn’t automatically mean that “buying a home” is the right choice for everybody.

TWO: If you've only budgeted for your mortgage payment.
Your mortgage payment only makes up a PORTION of how much that home will ACTUALLY cost you…and THIS is how much you’re REALLY looking at: Your mortgage payment, property taxes, insurance, maintenance costs, and repair costs.

This means, even though you might have a $1500 per month mortgage payment…when you add everything up…you could VERY WELL be approaching a $2500 per month when you take into property taxes, insurance, repairs, and maintenance…and that’s something that HAS to be taken into account, and properly budgeted for…that way, you’re not ever going to be caught off guard when your monthly bills turn out to be more than you expect.

THREE: If you didn't factor in Transaction Cost.
When you’re buying a home - you’ll have to pay for home inspections, escrow charges, title fees, appraisal fees, and loan origination charges, transfer taxes, notary fees, filing fees, etc.

In addition to that, the transaction costs are MUCH higher when you sell - this is because there’s often real estate agent commissions involved, transfer taxes, escrow charges, more title fees, and more random nonsense that continually adds up. When everything is said and done, selling a home can easily cost you another 4-6% of the homes value from start to finish…meaning, just to BREAK EVEN on the purchase…you need to sell your home about 7% HIGHER, otherwise - you’ll start to pay out pocket for these transactions costs.

FOUR: If you don't plan to keep it AT LEAST 5-7 years.
That’s because, the shorter you plan to keep your home for - the riskier it is that you’ll make money owning it. Things like transaction costs, property taxes, insurance, maintenance, and repairs are all non-recoupable costs that you will NOT make back…so, you’ll need to expect that property values would continue to rise to offset that expense and make buying “worth it.”

That’s why, GENERALLY…the breakeven point for MOST homeowners is going to be around 5-7 years…and, in almost all situations, the longer you keep your home, the more likely you are to make money.

FIVE: If you don't keep a 3-6 month safety fund at all times.
Just like “FINANCIAL EXPERTS” always recommend you keep a 3-6 month fund for anything that might come up…I VERY MUCH recommend a “HOME FUND” that covers 3-6 months of your homes bills, repairs, maintenance, and payments - JUST IN CASE something inevitably breaks, a tenant stops paying rent, or there’s just damage beyond your control.

And, listen....I’m not trying to dissuade you from ever buying a property - because long term, in the right circumstances, owning real estate could end up making you a SIGNIFICANT amount of money, and it CAN be one of the best financial choices you make…But, this IS meant to get you thinking about WHY you’re buying a property in the first place, and to REALLY run the numbers before you make such a large purchase - to make sure it’s worth it.

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

[AndreiJikh]

Graham: don’t buy a home
Also Graham: *buys a home*

[darlenewilliams]

Listened to your advice on not buying a home or renting a home. Now I'm homeless.

[actuallybusiness]

every family has a person who breaks the chain of poverty. I hope you will be that person!

[rightwingsafetysquad]

Should I buy a home

Graham: “Yesn’t”.

[TheIcedCoffeeHour]

Hello graham. I like this video. Thank you for making it.

[josueperez]

This dude could convince me to sell my own car to myself.

[happygilmore]

As someone who's single, I just don't see the point in living in most houses. They're usually built for families or couples. All I really need is a kitchen, a bathroom, and a bedroom.

[JNaStY]

Higher home value is offset by the lower rates. If you plan on staying in that home longer than 8 years, then buy a home. If not, you might get burned.

[TheDanaYiShow]

"Why you should not buy a home"
Graham: So I can buy it instead!

[tomm]

Here is a good recommendation that will save you a LOT of money when owning a home: LEARN TO BE HANDY!! When it comes to anything that goes wrong in your home it is going to be expensive if you are always hiring people to do the repairs for you. The biggest cost of any job is always the labor.

Houses and the various repairs are much simpler than many people think and the ins and outs of construction are pretty basic. The more you tackle yourself the more you will realize this. Plumbing is very simple and most everything about it can be learned quickly. Electric a little more complex if your adding new stuff, but most repairs of switches and outlets are very simple. Years ago I did nothing, now I'll pretty much do it all, plumbing, electric, gas, carpentry, etc.

A great way of looking at it is that "what's the worse that can happen if you try it yourself?" Seriously, give it a try, worse that can usually happen is that if you screw it up you have to hire someone to do it, which you were going to do anyway. But chances are you'll find you are much more handy than you realized.

Finally, you should learn to be handy because here on YouTube there are so many good videos on nearly any subject. If you watch several of them you will be able to see what steps are a must, because everyone does them, and what is optional. Then there is usually one person who has a pro tip that will make your work look professional.

Take you time, do it right and save yourself a TON of money in owning a home.

Now, second recommendation would be if you refuse to be a good handyman. They can do nearly everything you need but at a much lower costs than specialized professionals.

[rewind]

"Home" is a relative term. I live in a cardboard box. WiFi sponsored by McDonalds.

[adrianibarra]

Repair costs are extremely low for me. I’m Mexican and my dad and uncles all know “a guy” that does even the most expensive of repairs for a 24 pack of modelos and some carne asada. Life hacks bro 😎

[princesalahadeen]

Imma say this as a plumber 👨🏽‍🔧 guys before you buy your home make sure there are no leaks on the sewer or potable water system!!! And beware 😟 of older homes with Cast Iron pipes they rot away and eventually have to be replaced. whole home sewer line replacements can cost anywhere from 5-40k depending on the amount of tunnels needed under the house! 🏡

[hadejjas]

I’m to the point now, where I simply cannot miss a video from you bro. Keep them coming. 🙏

[kingali]

I guess i'll just live in the wilderness

[sanatvarma]

All home and car owners say not to buy home and cars, while enjoying the benefits of ownership

[preranachakrabarti]

"is this for me?"



My heart broke

[wyattmckenzie]

Graham: "Don't buy a home"
Me nervously looking around at my home: "Mission failed, better luck next time"

[lilmamma]

Closed on my home 1/29/21. It feels so good to have a permanent address and not to worry about moving every year trying to find a reasonably priced apartment. 4br 2ba house with a 1% interest rate paying $1, 050 mortgage. I would do it all again! 😝

[jakethompson]

I ponder on how my retirement experience would generally feel like because I've not yet been able to save enough money, don't even have a house to my name and according to my spreadsheet I am few years closer to my retirement schedule.