Even with the home prices easing downward as they are today, price tags remain at stratospheric levels, and many buyers are struggling to find homes they can afford that include the amenities they desire.
Adding to buyer frustrations is a common disconnect between what they believe they “must have” versus what they actually “need.” With home prices at record highs, this disparity is producing increasing levels of angst for everyone involved in the process.
Today’s buyers no longer focus on the fundamentals of homeownership. Instead, they concentrate on stone countertops, remodeled bathrooms, laminate floors and more.
In my opinion, the ultimate goal of buyers should be homeownership and not a specific level of amenities. A solution would be to help buyers understand the differences between their perceived “needs” and “wants.”
A “need” should be something you fundamentally cannot live without. A “want” is something that would be nice if possible. The goal here is for buyers to learn to live within their means.
Here are five suggestions for buyers struggling to find a home that fits their budget:
1. Modify your size requirements
Although four bedrooms and 2,000 square feet would be nice, can you live with three? Do your clients really need both a living room and family room? How about 1,500 square feet? Do they absolutely need 2.5 bathrooms, or will two suffice? How about 1.5? Or even one?
2. Consider homes with smaller yards
Some of my favorite childhood memories come from a home that had a very small yard. We looked forward to visits to the park on weekends. Current generations have bought into the mindset that their children must have a certain level of space and amenities to grow up as well-rounded adults. The fact that the majority of the world’s population lives in small homes with no yard at all flies in the face of that logic.
3. Amend your ‘must have’ list
Although stone counters are nice, they also increase the home’s price tag, as do stainless steel appliances, remodeled bathrooms, laminate floors and so on.
Millions of kitchens worldwide work just fine with tile or laminate counters, older appliances and linoleum floors. My recommendation is to buy at a lower price point and make incremental improvements over time.
4. Reconsider your school requirements
Top-rated school districts are important, but many well-known individuals have succeeded without attending top-ranked schools. The far greater influence in a child’s life is the willingness of parents to be highly involved in their child’s education outside the classroom.
5. Do not overlook other configurations
Remember that the initial goal is to get into a home, not to get the home of your dreams. Thousands have used condos, townhouses, duets and other configurations as their first step in the homeownership journey.
Those who object to paying homeowner’s association fees have usually not taken the time to realistically calculate the actual monthly costs of homeownership for a detached, single-family home. HOA fees can actually be a bargain.
Manage buyer expectations correctly, and you will not only secure a home for your buyer, but they will also begin on the path of wealth building and owning their piece of the American dream.
Carl Medford is the CEO of The Medford Team.