Planning Before You Buy

Ever noticed how people will plan, sometimes for months, to buy a major electronic purchase? They work out the budget; they decide on exactly what features they want; they cruise stores looking for the right price; they haggle when it comes time to actually purchase. It's a "dance" of sorts, as they figure out what they need and want versus what they can afford.

At least, my wife would describe my buying patterns that way! And I'm sure it also describes many of my male friends.

Why is it then that we take less care and time when picking houses? Why would we be uncomfortable to look over a home more than once? Why aren't we willing to bide our time if we can't find what we like? How do we forget that we'll be living with our purchase for the next (usually) several years, and end up allowing a real estate agent to convince us?

I think it's because we get under the spell of a house as an "investment".

Can your home be an investment? Sure it can. But that home will be the place that you live. You are picking it first of all as a place to live. It's like saying that buying a car is an investment -- it's not. Your home is for living in. Your car is for driving in. In both cases, the most important things are that you like it and that you can afford it. You can't bank on the price of your home or your car going up -- although these things can happen. You can try to maximize the chances that you make a good investment. But you can never guarantee it.

I knew a guy who used to lease a new BMW every couple of years. This was back in the 90's when the BMW was really popular (even more than today). He bragged that every time he took a lease, he actually got value out of his previous lease, because the selling price of the car would be more than the "buy back" on the lease! Well, then that stopped working, and he got caught having to dish money out. Suddenly, he was driving something else. Why? Well, he didn't necessarily like a BMW himself. So why did he get them? Just because of the "investment".

Personally, I think you should also enjoy driving your car.

My point? Buy what you like. Plan and pick out what is most important to you, and then set your sights on it. Do your homework. Be comfortable with what you will pay, and the amount of debt you take on. And don't let others convince you to do something that doesn't work for you.

Michael

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