Whenever you begin the process of looking at homes, there are five factors to consider upon visiting any property for sale:
- Square footage and layout
- Condition and renovation
- The intangibles
If you imagine a Libra scale with balancing trays, like those held by the image of a Greek deity on a courthouse or a law firm logo, then you know that as one tray is weighed down, the other automatically goes up, like a seesaw. For house hunting purposes, imagine there are five of these trays – if one factor gets significantly better, like a home’s new renovation, the price will get worse (more expensive) for the buyer, if the three others remain set.
The first four of these factors are relatively obvious and most people can quickly judge a property based on price, location, size and condition. But that fifth one, a special quality like a sprawling view, high ceilings, historical pedigree or outstanding architectural charm, for example, can be the dark-horse feature to make a buyer pull the trigger and make an offer. This intangible wow factor can make a house a home, and every buyer values it differently.
[Read: The Guide to Buying a Home]
Let the Intangible Factor Find You
Last year, a young woman who works as a management consultant was interested in buying a one-bedroom apartment on the Upper Eastside of Manhattan. She had a set budget, a basic location she wanted – closer to her sister and near the entrance to the subway she uses to commute – her size requirements were easy to meet and she didn’t have the bandwidth for any major renovation, apart from a fresh coat of paint and updating the closets.
With an explanation of the five factors, the buyer said she wasn't concerned about a wow factor. She explained at the time: "I don’t want to pay more for a big view or sacrifice something like location for a fancier building.” Working for a big-name firm, she is on the road four nights per week and felt that anything beyond checking her most basic wish list boxes was superfluous.
Looking at apartments, she stayed true to what she said. She was unfazed by one gorgeous, south-facing view from the 31st floor of a high-rise. She scoffed at the idea of paying even a penny more for a building with concierge services. She made it clear that she preferred to be closer to the subway versus having a tony Park Avenue address. But when she walked into the apartment she now calls home, in a building that had at once been a department store, she looked up at the double-height ceilings.
“I get it,” she said. “For me, these ceilings are the big intangible. This is a major 'wow.' This apartment is the one.”
Everyone searching for a new home prioritizes the five factors differently, and of course the first four are generally the most important. People will pay more for a home that’s beautifully renovated or expect a discount if the home is in an inconvenient location. But that fifth factor, the wow that makes a house a home, should not be overlooked.
When the Intangible Doesn't Wow You
Unfortunately, the intangibles are not always as exciting. Just as a small or strange layout – think about a bathroom right off the dining room, for example – or the need for a gut-job can negatively affect a home’s ability to find the right buyer, so too can an obvious handicap. Handicaps might include the living room’s dark view of a brick wall, a high-rise noisily ascending right outside the bedroom windows to eventually block light and views, strangely high monthly carrying costs due to community mismanagement or the widely spread news of a gruesome murder on the property. If that fifth factor, the intangible, is a handicap instead of a wow, most likely the price must reflect this. The buyer will want a deal to overcome these issues.
For the high-ceilings buyer, she didn't think that anything would make her say “wow,” but the height of the ceilings made the rooms seem bigger, the light seem brighter and her smile seem happier. For her, this intangible tipped the five-tray scale just a bit. In the end, she was willing to pay more for architectural details that elevated this property from house to home.
Are these must-haves on your list?
One of the first steps you take when deciding you want a new home is determining what you need in order to be happy there. The list of your must-haves can get long, and you reasonably can’t expect to find a house that perfectly matches all your criteria. “Someone has a list of 10 things – if they can find a house that has seven or eight of those, they’re doing pretty good,” says Jeff Plotkin, a Texas-licensed Realtor, attorney, certified public accountant and vice president of Habitat Hunters Inc. in Austin, Texas. Deciding what needs win out in your next home search can be tough, but there are a few key features and amenities many buyers seem unwilling to live without.Right in your price range
Right in your price range
Being able to afford your new home is a given, but buyers are often faced with having to choose between stretching their budget to have the master suite they want or having more reasonable monthly mortgage payments. Price often wins out in the end – you’re less likely to enjoy that master suite if you’re eating soup and foregoing vacations for the next five to 10 years to pay it off. In the 2018 National Association of Realtors Home Buyer and Seller Generational Trends report, home affordability was one of the three most important factors for respondents who recently purchased a home – behind only quality of the neighborhood and a location's convenience to work.In your preferred location
In your preferred location
Homebuyers care a lot about being able to get from point A to point B – as well as points C, D and E. Your future neighborhood can dictate what school your kids go to, how long it takes to get to work and how easy it is to stop at the grocery store when you forgot an ingredient for dinner. Plotkin says buyers put a lot of stress on where the house is, rather than what’s in the house itself. They’re looking for “proximity to schools, shopping, entertainment, public transportation,” he says.Interior over curb appeal
Interior over curb appeal
A handsome exterior keeps potential buyers from quickly driving away, but insight from new construction marketing site HomLuv.com reveals that it’s the interior that most often serves as the deal-maker. HomLuv’s website allows homebuyers to begin their search for a new home from the room they care about most, whether that’s the kitchen, living room or master bathroom. The one part of the house people don’t seem too worried about? Outside. In the roughly two months since HomLuv launched, “no one has chosen to look at exteriors first,” says Mark Law, vice president of product management for BDX, a home builder marketing company and parent company of HomLuv.The right number of bedrooms
The right number of bedrooms
While the interior of the home allows more wiggle room to compromise on your needs, there are some details that buyers must have. The right number of bedrooms would be the big one. Family expansion is often a primary reason homeowners start looking for a new house, so leaving out that extra room would defeat the entire purpose of the sale. According to the NAR report, 85 percent of homes purchased by respondents in 2017 had three bedrooms or more.Window treatments for reference
Window treatments for reference
Staging matters in a home. As much as we think we can picture how a vacant house will look with our own furnishings and decor, at the end of the day we need some suggestions. Law says builders will include big picture windows in bedrooms or over the tub in a master bathroom to let in natural light, but if the photos show the space without curtains or blinds, house hunters will inevitably see a design flaw. “They’ll say, ‘I’m not an exhibitionist,’” he explains. To avoid turning homebuyers off, window treatments should be included in listing photos and for home tours.Move-in ready
The condition of the home you shop for often goes hand in hand with your budget and the neighborhood you hope to live in. If your budget is at the lower end of the price range in the hottest community in town, you’ll likely find yourself buying a house that needs a little love. If your budget doesn’t restrict it, chances are you’ll have your pick of properties that have been turned by real estate investors. “The [buyer] demand is for 100 percent move-in ready condition,” says Bobby Montagne, CEO of Walnut Street Finance, a private money lender focused on home flipping in markets in Virginia, North Carolina and the District of Columbia metro area.Possible to picture your vision
Possible to picture your vision
Even if you’re one of the detractors who prefers a fixer-upper, it’s still necessary to be able to envision how the space will look once you’ve added your personal touches. Based on reactions from HomLuv users, details as small as the cabinet color in a photo can change the way a person thinks about a house. Law says he’s found preferences differ from region to region – darker cabinets may see more love in the South, while in California the preference is for white kitchen cabinets. “You could offer a free puppy and free pots and pans with the house, but if the cabinets are dark they still don’t want it,” he says.Warranty available
For newly built homes and those that have been recently flipped with significant work, you want to know that the professionals involved stand by their work. New construction homes often come with a warranty from the builder or the option to get a third-party warranty, and you should ask the investors involved with a flip for the same level of protection. “A good builder [or] a good flipper does not have a problem with that,” Montagne says. If an issue arises within the life of the warranty related to the workmanship, you can rest easy knowing you’re covered financially for the repairs.Potential for value growth
Potential for value growth
Your home isn’t just where you’ll live – it’s also an investment. There are a few easy decisions you can make that reduce the chances of losing out on potential growth in value over time, whether that means buying in a neighborhood where home values are steadily growing, finding a home in a desirable school district or avoiding living next to a strip mall. “When you’re buying a house, you’re not only buying it for yourself, you’re buying it for resale,” Plotkin says. “So most people are not going to want to back up to commercial [property] or a busy road.”Read More
Corrected on March 12, 2019: A previous version of this story failed to include "price" in the list of factors homebuyers should consider.