There are some very important questions you should ask yourself before you set out on making what will most likely be the biggest financial and, probably, emotional investment in your lifetime.
Here are some questions to consider:
How Long Are You Staying Here?
With its many colleges, tech start-ups, universities and think tanks, Greater Boston is one of the more transient major metro areas in the country. People come, people stay for a while (often renting), and then they go. Will you go?
A national real estate association suggests that you only buy an apartment or house if you plan on living in the area for a minimum of seven years. Anything less than that and you risk losing a considerable amount of money on your investment, plus have to endure the headache of a quick turnaround sale, which depending on certain variables, can send the wrong signals to prospective buyers. So for most people, it’s better to buy a home you’re really going to live in versus playing the real estate market. The exception here is if you’re really wealthy or you’re playing with someone else’s money.
What Can You Afford?
If you’ve decided that you’re going to be in the Greater Boston area for a while, that’s great! It’s time then to do the math and to also know, if you don’t already, that this particular region is one of the most expensive housing markets in the country. In general, you will need a minimum of 10 percent of a property’s asking price as a down payment. In some areas of Greater Boston though, it’s closer to 20 percent and in others, in fact, particularly Boston’s downtown neighborhoods, it’s even more than that.
This can be a difficult calculation to determine, so you want to be really honest with yourself here. For example, if you really want that $800,000 one-bedroom in the South End, and you don’t have 80,000 to $160,000 as a down payment, you should probably move your search a little westward, to perhaps a $400,000 home in Medford.
How Much Time Are You Willing to Put Into Your Search?
Homes in Greater Boston stay on the market for more than 100 days on average. Though some sell much faster, others can linger for months or years even! But 100 days should be a good rule of thumb. You should also be willing to invest several weeks to a couple of months in meeting with brokers, combing listings, answering the two above questions, and lining up loans. You definitely don’t want to rush any aspect of the process because you could end up making a costly mistake. Also, once you do find a home that’s just right, it will take at the minimum a few weeks to close the deal.