first-time buyers and repeat buyers alike, the decision to make an
offer on a home is both exciting and a little scary. If your offer is
accepted, the place you’ve chosen will be your home for the next several
years. Not only should you feel emotionally satisfied by your choice,
but you should also feel financially comfortable that
you’re buying a home that you can afford and that you feel confident
will hold onto its value or hopefully increase in value over the years.
While no one can know for sure what will
happen to housing values, if you make the choice to buy a home that
meets your needs and priorities you’ll be happy to live in it for years
Neighborhood or Home Amenities
For some homebuyers, living in a
particular neighborhood takes precedence over all other priorities, but
for others, the home itself matters more. Ideally, you’ll find the
perfect home in the neighborhood you love at a price that’s below your
budget, but realistically, most people have to make some compromises.
You (and your spouse, partner or family)
should make a list of what features you want in a home, such as the
number of bedrooms, a fenced yard, granite counters in the kitchen, and
then rank them in terms of priorities. Think about whether the house or
the community matter more to you, and whether it’s worth it to you to
make a longer commute in order to live in a home with a larger lot.
When to Compromise
Once you’ve determined whether the location
or the house itself matters most, you may have to compromise on some of
your priorities. If the location is the most important factor for your
home choice but you find that homes are priced above your budget, you
can compromise in several ways:
for a different home type within the community, such as a smaller
single family home, a town home or condominium. Decide if you can live
with one less bedroom or other features on your list.
with a lender or a financial planner to discuss your options for
increasing your budget. While no one should overspend on a home, you
should recognize that going $10,000 above your price range when you’re
financing your purchase with a 30-year fixed-rate loan will actually add
only about $30 to your monthly payment.
your expectations about the condition of the home. While everyone
prefers a move-in ready home, you can often get a better deal on a home
that needs some cosmetic repairs. Be careful, though, to have a home
inspection and to evaluate the structure of the home to see that it
meets your needs. Moving walls and adding a bathroom are costly
renovations, while painting and replacing appliances are more
If you have your heart set on a specific
home style or a home with a larger yard for your children or to garden,
your compromise is more likely to be in the location. If you’re willing
to commute farther or perhaps choose a home in a community next to the
‘hot’ neighborhood, you can often find a more affordable home that
fulfills your wish list.
An experienced Realtor can help you determine when and how to compromise and should take the time to show you a variety of alternatives so you can make an informed decision about when to make an offer.