Buying a home involves more than just focusing on what neighbourhood to choose, according to a recent Forbes magazine article by Bethany Lyttle. Lyttle’s article offers some practical tips from American REALTORS®, who have been through a lot of adversity due to the real estate market collapse and prolonged economic downturn. It should come as no surprise that they are now being more circumspect about the market than they were during the halcyon days of rising house prices prior to 2008.
Lyttle wrote that what is important, even in a local context where the housing market has been performing well and sellers’ market conditions prevail, is being aware of your own preferential needs and your budget. There is nothing worse than ending up owning a home you cannot afford. It’s not just the sticker price, but the operating cost that you have to take into account.
Real estate broker Steve Jones told Lyttle: “As you calculate, look beyond the listing price. A house with a vaulted ceiling costs more to heat than one with a low ceiling. And a house with a pool means paying to maintain it. All these extra factors can add up.”
Another important aspect of buying a home are the intangibles that are not readily discernible by listing them on a ledger. Although by noting some of them on a piece of paper, you can attempt to describe a good starting point.
REALTORS® will ask you how you feel about the home. Does it make you feel comfortable and is it a place that you can make your own? What is your first impression?
Some go as far to ask how you would set up a room or how well something you have will look in the house. If you reply positively to these questions, it may be a sign that you are warming up to the possibility of the house becoming your future home.
Don’t get overwhelmed with too many details and what-ifs, based on your long-term projections on how life will unfold for you. In Lyttle’s article, REALTOR® Cindy Jone warned: “While it’s important to envision a home’s role over time, making a decision with too many variables in mind can work against you. Buy the house for the way you are living today.” Then adapt as you go.
Of course, along the same lines you also need to be thinking of not only your current needs and circumstances, but on your present lifestyle. Despite the romantic notions of a rural lifestyle with quiet wilderness as your backdrop, does it really fit your busy job and social requirements of being active in an urban environment? Are you prepared to do long commutes on a frequent basis?
The same can be said for the house itself. What are your deal-breakers or must-haves in order to make an offer on the house. How important is master bedroom en suite for example?
If you do decide to make an offer, your REALTOR® will be there to help you to determine how much you should offer as well as negotiation strategies. In a sellers’ market, where you are choosing to buy in a very desirable neighbourhood, you often will not have the luxury of taking your time to decide. You must be prepared to act quickly on the home you want.
No home will meet your entire needs. Part of your reality check is being practical and decisive. You can always make adjustments later based on how close the home does meet your needs. New flooring and even a potential addition may be possible if the location is a top priority in your decision-making hierarchy.
Lyttle made a few more observations, which are more self-explanatory, but worth mentioning.
According to the Forbes article, do not become too fixed on a certain square footage or even the number of bathrooms. Possible adaptations can be made that will not be cost prohibitive, especially if you are saving on the cost of the home.
While it may seem obvious, it is better to be more rigid on keeping with a floor plan you like rather than all the accessories that go with it. You can always dress up an open and spacious kitchen layout you really like with new countertops and even cabinets, but opening up a tiny enclosed kitchen, which already has all the bells and whistles you like, is a whole different matter. Again, this comes back to what you feel you must have in order to make an offer on a particular home.
Finally, do not be too preoccupied on making sure your house will be a good investment and then forget that you may be living in it for a number of years. Is it the right neighbourhood for your family; e.g., are their other kids on the street for them to play with? Is the house itself one you can call home and enjoy? Is it one you can maintain within a budget you can afford and still have money left over for other necessities of life?
It is important you talk to an expert before you make one of the most important financial and lifestyle decisions of your life. Call a REALTOR® who knows the market in which you are planning to purchase a home. A REALTOR® brings objectivity and experience to the table when advising you on house hunting.
Lyttle wrote in her article that you want to be buying a life, not an address. So do your homework before making any rash decision and you will be happier for it.