You've met with your lender, selected a real estate agent and you're finally to the fun part – house hunting. But even if you have a big budget, the chances of finding a home with that three-car garage, marble countertops and everything on your Pinterest board are slim.
Still, that doesn't mean you won't find a place you love for years to come. Drew Burchette, managing principal broker at Living Room Realty in Portland, Oregon, says the dream list is valuable for agents to narrow down listings for buyers to see, and it serves as a jumping-off point for finding the home that best fits clients' needs.
In the first client meeting, Burchette reviews what they want in a house and introduces them to his "85 percent rule." "That is, if you can get 85 percent of everything you're looking for in your perfect house, you're doing pretty good," he says. "[It gets] them used to the idea that you're not going to get it all."
However, you can still find a home that comes with most of what you want. Following a few simple rules will help keep your expectations in check throughout the house-hunting process.
Keep your eye on the price. Now that you know how much you can afford in monthly mortgage payments, keep that price range in mind when you make your list of desirable features.
Melissa DiMauro, a Realtor with Nothnagle Realtors in Fairport, New York, says a buyer's budget has to dictate where house hunting starts.
"When you're a first-time homebuyer, typically if you haven't established a great deal of funds for a down payment ... you're going to be making some compromises," DiMauro says. She advises clients to allow for their wish list of home features to change as they tour houses, making room for budget restrictions and details they may not have thought of before .
Learn about the market. The best way to get a firm grasp on what you can afford is to study up on what homes are available and what price they're selling for in your area. To start, search online listing sites such as Zillow, HomeFinder or the local multiple listing service, which is a database of available properties created by a group of brokers to showcase their listings. You can look at estimated values of homes on the market, and get a feel for what's available, what's selling quickly and what neighborhoods fit any price constraints.
But as with anything on the Internet, what you see may not be completely accurate, or a comprehensive view of the market. Allow your broker to further educate you on the market, and bring the broad spectrum of available homes down to a manageable level.
"We take 1,500 available listings that are out there [in Portland] … and distill it down to a much smaller number – seven or eight," Burchette says.
Robertson Allen, co-owner of The Cassina Group Real Estate in Charleston, South Carolina, says the education process on the market often leads to a better understanding of the homebuyer's needs and ability to make changes to a home they purchase. "We have neighborhoods that are located very, very close to downtown Charleston, but they're dated and they need help fixing up," he says. When homebuyers understand the trade-offs between location and home condition, Allen says he can gauge what will better suit them.
Look past the ugly cabinets. If you're hoping to find an updated kitchen with stainless steel appliances and an en suite bathroom with brand new tiling, you're not the only one.
Allen says homebuyers often expect to find a home with the updates they're looking for, but don't take into account how those details will affect the price. "The consumer these days has been trained with TV shows such as [on] HGTV and the Web of just basically seeing these finished products. A lot of people are uneducated on how much it costs to get that … marble on countertops and really nice backsplashes," he says.
The his and her closets you may be looking for can often be made after purchasing a home, allowing for a more personal touch to the design as well. DiMauro says her design degree is often put to good use while touring homes with clients to explain "what they could realistically do with a space" to make it their dream home.
Take your time. Especially for first-time homebuyers, it's important to give yourself time to look at homes on the market and let your list of wants and needs evolve. There is no set time period you should be looking for a house, but you should have enough time to take all your needs into consideration, whether that means days or months.
"A lot of first-time homebuyers are eager to make a jump into a home very quickly because they are excited about the process and really want to get a home quickly, but I encourage them to take a look around and see what's out there if they can, because that is going to give them a better picture of what they really do want in a home," DiMauro says. "And then they'll stay there a little longer because they'll have something that really fits for them."
Simplify your list. You've checked off, erased and added wants and needs to your list. And you think you've found the right home. Before you make a final decision to put in an offer, step back and look at the bigger picture. Karim Alaeddine, principal broker at Living Room Realty, says the decision comes down to three factors that can settle your thoughts on a home:
- Location of the home.
- Amenities in the home.
- Condition of the home.
Depending on how the home fares in terms of each factor, the buyer can step back and examine whether the faults or deficiencies outweigh the benefits.
Alaeddine says he's currently working with a client who is deciding on a home that needs more updating. Yet the home has a great location and more amenities. As he works to help her make a decision, his questions revolve around the three factors. "Is this right for you to take on? More location, more amenities, less condition?" Alaeddine asks.
Weighing each factor against the others will help to stave off costly renovations or a long commute. As DiMauro advises, "don't fall in love with something and get in over your head." You will find yourself staying in the home longer if you approach the decision carefully and don't let your emotions do all the deciding.
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.