6:30 am ET
Sept 24, 2014
MICHELLE PERRY HIGGINS: There are three things that you must do before entering into any real-estate transaction regardless of the current situation in the real-estate market. According to recent statistics from the U.S. Census Bureau, 66.9% of all households in the U.S. live in owner-occupied housing. For most Americans, this is our largest purchase and it requires a well- thought-out plan. Review the following issues before you take action.
1. Time horizon and investment goals: First, as with any investment, you must identify your time horizon. For example, if you are a purchaser, do you plan to flip the house within a year? If so, you must believe the market will move higher in that time frame. Have you evaluated the risks that might prevent this from happening? Or, on the other hand, will this be your retirement home allowing you to endure real-estate cycles without worrying about short-term fluctuations. Understanding your expectations about the property, along with liquidity needs, will help you evaluate if the property is right for you.