Women face an uphill climb to homeownership, but 4 smart moves can help you overcome the obstacles
- Women are financially capable and responsible, but they still face an uphill climb to homeownership.
- I’m a financial planner, and I recommend taking four smart steps to overcome the obstacles.
- Start by questioning why you want to own a home, then do the math and work with a good team.
In today’s competitive real estate market, it takes more than just money to claim the keys to the hot property everyone wants.
“From understanding purchaser responsibilities to realistically assessing risk tolerance, savvy buyers best navigate fast-paced bidding wars,” says Carey Hughes, principal broker with Keller Williams Realty Professionals in Portland, Oregon.
This holds true for would-be homeowners across the board.
But as more women take the lead in purchasing homes, they face an uphill battle getting there.
Research has shown that approximately two-thirds of personal finance magazine articles written for women are negative — and the majority of the advice is constricting. Give up frivolous expenses. Curtail bad habits. Operate from a place of fear.
Women are also denied loans more often than men and pay more for them. According to the Woodstock Institute, even female-headed joint applicants are much less likely to secure purchase and refinance loans than male-headed joint applicants.
Not exactly empowering when you’re contemplating the biggest purchase of your life — let alone accurate.
Women’s financial abilities are chronically underestimated
Ironically, when we look to research again, we learn that this advice and these practices are out of step with women’s actual ability to manage money.
Women are better investors, while men are more overconfident in their abilities. Girls’ and boys’ math skills and abilities are indistinguishable. Women have a better mortgage repayment history and are less likely to default on their mortgage loans than men.
“Even from a young age, women are treated and talked to differently about money,” said Sallie Krawcheck, arguably the most powerful woman on Wall Street, in an interview with The Every Girl. We can’t “let ourselves get socialized into the idea that we’re not capable with money.”
Let’s follow Krawcheck’s lead and change the way we talk to women about finances.
4 steps women can take to beat the home-buying odds
In my experience as a financial planner, smart women do four things to take control of their money and make informed home-buying decisions in highly competitive markets.
1. Question what you’ve been told about buying a house
Why do you want to buy a house? Are you buying from a place of knowledge and understanding, or are you approaching the transaction based on outdated narratives, like renting is just throwing away money or homeownership is the only way to a higher socioeconomic class? Purchasing a house is a big decision, and you want to consider this move in the context of your larger financial plan.
2. Do the math
What are all the associated costs with the real estate transaction, above and beyond the sales price? How will you cover these? What are the property taxes, HOA fees, and maintenance expenses like? When is the property due for major repairs and cosmetic upgrades? What is the opportunity cost of the initial, recurring, and surprise expenses?
Homeownership costs can add up quickly, so know what you’re getting into — and where you’re willing to compromise for the sake of your wallet.
3. Work with a good team
A good real estate agent often knows of listings before they hit the market, knows how to make offers stand out, is a skilled negotiator, and has a strong network of professional referrals to move the deal along quickly.
“A top agent also knows the market conditions specific to a neighborhood and has a strong understanding of buyer behavior,” says Hughes.
A good financial planner can help you work through all the questions above and help you figure out what you can comfortably afford.
In today’s hot real estate market, it’s likely you’ll have to put in an offer above asking price and be generous on terms. Your realtor and financial planner can help center the ship when the bidding wars tug on emotions and wallets and concessions are likely to incentivize the deal.
Your financial planner should also help you determine the appropriate financing, including mortgage provider and terms, down payment, or assets to tap for a cash transaction.
4. Set up a cohabitation agreement
If you’re considering purchasing the house with a partner and are not married, be sure to have a cohabitation agreement in place that will determine what happens if the relationship ends or one party dies.
Buying a home is one of the most significant, and rewarding, financial decisions most people will ever make. With a little added planning and some thoughtful introspection, women homebuyers should proceed with confidence knowing they already have the skills and knowledge to obtain a successful outcome.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Source: Read Full Article