So your friends laughed when you told them you were hoping to buy a house in Asheville. “Paris of the South?” they chimed, doing a gleeful, three-little-pigs dance around you. “Good luck, sucka!”
Fact: Asheville’s housing market remains red-hot. This modest city of 72,000 exerts a magnetic pull on visitors, leaving many of them convinced that their lives would be immeasurably better if they lived here. Supply and demand—you’ve heard it all before.
“It’s a difficult market,” concedes Philippe Rosse, executive director of The Affordable Housing Coalition of Asheville & Buncombe County, but “not an impossible market.” If your income is closer to a barista’s than a hedge-fund manager’s, the good news is that homebuying savvy is available for practically nothing.
For 16 years, Rosse’s group has been giving potential homebuyers help in making what for most will be their largest single purchase ever. The nonprofit’s monthly classes guide prospective buyers through the murky world of mortgages, budgets, closing costs and other unappealing but vital subjects. (See sidebar, “Making it Happen.”)
“You’ve got to ask yourself, ‘Am I ready?’” says coalition staffer Harriet Williams. “Have you looked at your credit report? Have you put aside money for a down payment? Beyond that, there are other costs. People look at the price of a house and think that’s it—the whole price of homeownership. They forget attorney fees, inspection fees, deposits for utilities and moving fees. Those are all out-of-pocket expenses that have to be planned for.”
Seem like more than you bargained for? Remember, the payoff from a carefully considered home purchase extends beyond the house itself to include a little nugget called “equity”: the difference between what you owe on the property and its current market value. As Rosse points out, investing in a home remains “the No. 1 way to build wealth” in the United States.
Moreover, owning a house gives you more control. “If you say, ‘I want to paint this room’ and you own the house, you can do it,” notes Williams. “If you decide you want to cover the back yard with cement, you can do that too. It’s your house.”
Both Rosse and Williams, however, warn against an impulsive, checkout-line mentality. “Homeownership can be a three- to five- to seven-year process,” says Rosse. “Start now. People get daunted by looking at their incomes and their expenses and throw their hands up in the air and say, ‘I’ll never own a home.’ But you can take modest steps right now to put yourself on the path to owning a house.”
Getting a handle on your current finances and how much house you can truly afford is crucial, stresses Williams—not just now, but figuring in such future complications as upkeep and home improvements, job loss, income fluctuations, an ever-increasing cost of living and even ugly matters like divorce and death. If your back is already to the financial wall at the outset, she says, having to replace a roof or furnace could push you into crisis.
“You’ve got to look 10 to 15 years down the line,” says Williams. “It’s big: You want to make sure you go in with knowledge.”
Here are some tips for prospective homebuyers:
Don’t take on a bigger load than you’ll be able to pay over the long term. Understand your budget, your financial situation and your credit score before deciding how much house you can actually afford.
Do be aware of hidden costs: moving, new roof, repairs, condominium fees.
Ask questions early and often. “Don’t start asking questions on closing day, when you’re sitting there with a pen and a pile of legal contracts,” says Williams.
Don’t let the process overwhelm you. Counselors like those at AHC are ready to help.
Get help before your problems grow. If you can’t afford your mortgage once you’re in a house, see a counselor immediately.
Know the market, and anticipate changes to the neighborhoods you’re looking in that might affect your home’s future value.
Homebuying can be daunting, admits Rosse, but he still believes it’s worth considering—and the sooner the better.
“Start today,” he advises. “Look at your situation. Make the next day better than this one. You’ve got to be realistic and optimistic at the same time. Planning and knowledge are priceless in the process of buying a house. After all, this is a war, not a battle. The decisions you make are long-term.”
Making it happen
The Affordable Housing Coalition’s four-week homebuyer-education class is offered monthly. Topics include budgeting and understanding credit; how a mortgage works and what to expect from a home inspector; advice from lenders, real-estate agents and nonprofits; financial management and maintaining a new home; and legal concerns.
The sliding-scale fee ranges from $10 to $55. Child care is available for an additional charge. Registration is required; for an info packet and registration form, call 259-9518 or e-mail HarrietW@ahcabc.org