In economic times like these, we should ask ourselves this question every time we consider purchasing something:

“Is this a Great Deal, a Necessity, or a Smart Financial Move?”

But most of us, including myself just don’t take the time.  Either we really don’t want to know the real answer, or we just don’t care.  We want whatever it is.

This week, a young professional couple pulled up at the model home in a brand new luxury sports car.  I know it was new because it still had the temporary dealer tag in the back window.  As they approached the door, I was confident that this was my next sale.

After a warm greeting, I asked them “what in a new home would be most important to them?”  Their answer…. “a new home…FOR RENT.”  Well damn!  

Even new home sales professionals know that home ownership isn’t for everyone.   So, lets find out why this couple shouldn’t buy.   Were they here in Nashville on a temporary relocation?   Were they expecting a transfer within the next year? 

No, they are from the area and have no intention of relocating away.   Further discussion revealed the reason for wanting to rent.  They were just unsure of the current Real Estate market.  They wanted to wait until the news media confirmed home prices have bottomed out, and appreciation certain.

I don’t want to appear cynical, but the car they drove up in was 1/3 the price of a nice home.   It lost approximately 30% of what they paid for it the second they signed the purchase agreement.  It has little chance of ever being worth what they paid for it.  And there are no tax advantages when they do sell it for less than they paid for it (unless they are self-employed and use the car for business.)  But, I know better than to make fun of something that someone purchased.  The car never came up in the conversation…. well not until later anyway.

If they had asked the above question about the car purchase, the only possible answer would be “a great deal.”    I bet the new car salesperson would have danced a jig around answering the question too!  But, they had received a nice discount, zero down payment, and 0% financing for 72 months.

For “First-Time Buyers” in Tennessee, buying a new home is almost that easy.  You can purchase a brand new home with zero-out-of-pocket money using the ‘Great Start” program, offered by THDA.  Coupled with today’s record low interest rates, you can more than likely own your new home for the same, or less, than a comparable rental would be.

The new home will not go down 30% in value the day you move in.  Real Estate has firm documentation of appreciation over time.  Chances are very good that your new home will one day be worth more than you paid for it.  Mortgage interest is tax deductible.  So are property taxes.   You can also turn your new home into investment property and rent it out, should you ever choose to move.    Try all that out with a car.  You can also borrow money on your equity.  Try that with an apartment.

Ole South has brand new homes, of all shapes and sizes, in a variety of locations throughout Middle Tennessee.  With prices ranging from $89,990 to $299,990, you are certain to find a home to meet your needs.    For more information on our locations, please visit www.OleSouth.com.   Visit any of our model homes and find out for yourself why thousands of Tennesseans are proud to say “Ole South Built It.”

And while you are there, ask yourself the above topic question.  At Ole South, the correct answer is “All of the Above!” 

After more discussion, the visiting couple decided the time was right to explore purchasing a new home.  I am sory to say that expedition did not take very long ….. their sparkling new car payment had pushed their debt-to-income ratio way over approvable limits.  For them, renting it is for a while longer.  And we’ll stay in touch until the time is right for them to explore again!

Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019  direct 615.593.6340.  Specializing in new homes in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, Clarksville, and Spring Hill, Tennessee