Normally, I know very fairly few details of my clients’ money matters. The mortgage broker handles that — she sees their bank statements, calculates their debts, and becomes intimately aware of their incomes and what they have tucked away in retirement and savings accounts. Once they have a loan approval, for most of my clients, how much they have is less relevant for my purposes than how much they want to actually use toward their home purchase, and how much they want to spend every month — versus how much they have, and how much they can spend.

So, I was somewhat surprised to make a discovery, recently, about a client who had been really pinching pennies — clear on what she wanted, and qualified at a much higher price point than she was looking, but struggling to find what she wanted in her self-imposed price limitations. She had been house hunting for months and expressing her frustration, but unwilling to inch up in price to get beyond them.

Normally, I know very fairly few details of my clients’ money matters. The mortgage broker handles that — she sees their bank statements, calculates their debts, and becomes intimately aware of their incomes and what they have tucked away in retirement and savings accounts.

Once they have a loan approval, for most of my clients, how much they have is less relevant for my purposes than how much they want to actually use toward their home purchase, and how much they want to spend every month — versus how much they have, and how much they can spend.

So, I was somewhat surprised to make a discovery, recently, about a client who had been really pinching pennies — clear on what she wanted, and qualified at a much higher price point than she was looking, but struggling to find what she wanted in her self-imposed price limitations. She had been house hunting for months and expressing her frustration, but unwilling to inch up in price to get beyond them.

We were writing yet another below-asking offer on a home that just barely fit her minimum requirements, but had been on the market for longer than normal, giving us a modicum of hope. The seller, a bank, requested to see proof of her downpayment funds in the form of an actual account statement, with all the security-sensitive information redacted out.

Though my mortgage broker had mentioned that this woman was able to afford more, I had no idea how able she was until she sent over her savings account statement for me to send to the bank/seller of this property.

Alrighty then. With thousands and thousands of dollars in the bank above and beyond what she’d need to close the deal — and ostensibly other retirement and traded asset accounts containing funds to which I’m still not privy — why have we been agonizing over a thousand here and a thousand there, which has been making the difference between her ability to buy a home she likes, and not?

Or, what’s worse, why have we been mimicking Cinderella’s stepsisters, trying to cram the big old feet of this buyer’s wants and needs into the tiny glass slipper of the price range she’s decided to stick within?

Apparently, this woman is embracing the "new frugality" that is now so popular among Americans. Though spending and net worth indicators are moving upwards, a recent Associated Press survey of 44 economists found that two-thirds of respondents believe these penny-pinching ways are and will continue to outlive the recession.

Many of the two dozen laypeople surveyed agreed — more than one interviewee described her personal economic downturn and it’s permanent impact on her spending habits with the words, "I will never spend like that again."

This makes sense to me. This Great Recession was excruciating for almost everyone I know, especially those of us whose asset allocations were very real estate heavy. Myself and most every real estate investor and professional I know are personally doing the work on our own relationships with money and taking steps to make sure we (money and me!) get and stay on good terms.

So, I wholeheartedly applaud the homebuyer who decides to spend no more than $300,000 on their home, even though they are qualified to spend $500,000. In light of recent events, I believe that the influx of this sort of individual into the ranks of homeowners will inject long-term sustainability into the markets, which benefits every American who owns a home, in the long run.

But, with that said, frugality means cutting back, scaling down, living less extravagantly and sometimes doing without things you might have run out and bought a few years back without blinking an eye. It doesn’t mean simply spending less but expecting to get as much as or more than you did before (although this is an occasional side effect of the recession).

The reality is, even now, homes aren’t being given away, and the fact that you’re clear on what you want to spend does not necessarily mean there’s a seller out there who is on the same page.

The new frugality means being willing to make sacrifices or compromises in your wants and needs, but still living well. So, the homebuyers out there who are trying to stay conservative with their price ranges might need to consider proportionately scaling back the must-have specs for their dream home. Otherwise, their house hunt might shift from The Search for The American Dream to The Neverending Story.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

***

What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
New January Connect speakers added: M. Ryan Gorman, Josh Team, Glenn Kelman and more.SEE THE SPEAKERS×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription