Bad Advice I Got From a Realtor

Q: My wife and I are buying our first home. Our realtor told us that since a home is your most important investment, we should stretch financially and buy as much hime as we can. What do you think? Jordan, Albany, NY

A: Well Jordan, I unfortunately have heard that terrible financial advice from realtors before myself.  But, like a lot of quote, unquote “conventional wisdom,” it’s simply wrong.  Now, to play Devil’s Advocate, I suppose if you knew that you were going to make more money in the future it might make sense to pay a little bit more than you could afford to buy a home. But, how can you be sure that you’re going to make more money? And even if you could be certain that your disposable income would be higher in the future, by overextending financially NOW to buy a home that you can’t afford, in the short term you’re not going to have enough money for maintenance, for repairs, for capital improvements. These are inevitable.

Not to mention, you won’t have enough money for unexpected expenses that just come up in your life anyway. I’m a big proponent of home ownership, but overextending yourself financially, even in the name of buying a home is reckless and unnecessary and I would advise against it.

Thanks for your question, Jordan.  Good Luck!

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