Over the years, I have the pleasure of working with hundreds of homebuyers. Regardless of income, price point or upbringing, I found one common thread that rang true with almost every family I ever worked with: Almost all of my buyers remained focused only on the property that would fit their needs in the short-term.
As a professional real estate broker, one aspect of my job that I took quite seriously was teaching these homebuyers to be more forward thinking when making what would be (for most) the largest purchasing decision they would make. To help them get over this home buying hump, I stuck to a hard line that included six specific pieces of advice.
How Long Do You Plan to Live There?
A lot can change in two years. You might have a baby; a child might move out, leaving you with empty space, or needed space. You could fall victim to divorce, death or some other disaster that changes your living situation drastically. You might get a raise or lose a job. Like I said, a lot can happen in two years. I would tell homebuyers to buy a home based on what their needs might be two years from now, and I always advised clients to buy below their price range in the event of a job loss or layoff.
What Will it Cost to Live There?
There are multitudes of costs that go along with home ownership. I told buyers to focus on property tax payments, homeowner association dues and homeowner's insurance as part of the "total package" of their monthly payment. When they added these things into their monthly budgets, their budgets often changed dramatically.
What About the "Hidden" Costs of Home Ownership?
Of course, there are hidden costs of home ownership also. I told my buyers to anticipate paying at least one percent of their home's value in maintenance costs each year and to budget another one percent of their home value for home improvements. This usually led to them looking for a less expensive house than what they were qualified to buy, but it was almost always the more fiscally responsible move.
Is the House an Investment?
For most buyers, a home is a forced savings plan, an investment. I told buyers to look at a house as a potential investment; to buy a house based on items most other buyers find appealing and not buy it for them, because that will help them sell for more money and sell faster, later.
What About the School Districts?
Even if my homebuyers weren't going to use them, school districts play a pivotal role in a home purchase. People relocate to neighborhoods based on the worthiness of the school district, and the better the school district, the more likely a neighborhood is to maintain its value than neighborhoods with less than desirable districts.
What About the Intangibles?
Improving home value is an incredibly paramount consideration in a home purchase, and much of that resides in the neighborhood rather than the home itself. I made my buyers think about things like proximity to power lines, neighborhood amenities, cars parked on the side of the road and overall neighborhood planning. My goal was to focus buyers on the intangibles of a home purchase; getting them to fall out of love with a house and entice them into falling in love with a location that would give them the best return on their investment.
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