Thursday, April 22, 2010

Home Buying is Emo

That's right, buying a home is emotional. This is a great article from the New York Times (included below). It goes over three emotional questions you need to ask yourself before buying. I think you need to ask yourself a lot more:

  • Will buying this home mean you can still live your life the way you do (will you still have $ for travel, clothes and food?)?
  • Do you have a back-up plan in case you lose your job or need to pay a special assessment?
  • Is this really where you want to live, or are you just exasperated from the search!?
There's a lot that goes into this decision because it's a huge purchase. But I've thought it all through and I'm ready to take the plunge! House-hunting continues this Saturday.

http://nyti.ms/95rGWz

Bucks - Making the Most of Your Money
April 21, 2010, 10:23 am

3 Emotional Questions Every Home Buyer Should Ask

I’ve been a big fan of Seth Godin ever since the olden days in the 1990s when we both wrote for Fast Company magazine. This week, he poses questions on his blog that will change the way you think about shopping for a home.

He, like me, is bullish on the money side of this, how a house, bought in the right way, can serve as a foundation for wealth (though by all means check out our new and improved Rent vs. Buy calculator, having its debut today, to see if now is the right time to buy where you live).

It’s the emotional side of this that can really trip you up, though. So Mr. Godin suggests asking the following three questions about what’s going on inside of your head:

1) How big a statement can you afford? When we buy a house and throw open the doors to friends and family, we’re making a statement about ourselves. We are settling down, yes. But we’re also saying: We can afford this. Look at what we’ve done. We are prospering. Or, even, sometimes, We Have Arrived!

This is dangerous.

2) Is this a referendum on your relationship? People who buy are often doing so with a spouse. It is a moment of anxiety and stress, perhaps the biggest purchase of their lives. And they don’t have much practice buying really big things. It is hard to talk about, too. So Mr. Godin suggests adding some “artificial rigor” to the conversation to make sure the buying process doesn’t become a referendum on how good your marriage is or whether the primary breadwinner is earning enough.

What sort of rigor? Mr. Godin doesn’t say. I’d suggest find a neutral party to counsel you, say a financial planner whom you pay by the hour. Or a couples therapist. Or a trusted friend. Please post your ideas for rigor below.

3) Will this kill your appetite for risk? “A mortgage can wipe you out” if you are an entrepreneur or big idea person, Mr. Godin writes. But not quite the way you may think. The pressure of the monthly payment may keep you from trying something potentially brilliant. You have a mortgage to pay, after all, and quitting to start a business would not be responsible.

Smart stuff, I think. How about you?

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