Friday, August 28, 2015
Buyers Were Asking: Under-Buying
This is a common challenge to overcome when starting your home search. Whether you are a first-time buyer, or, a move-up buyer, you'll find, you will first start with your "ideal money to spend" in mind. For most buyers, there is a difference between the budget planned for and what that will purchase. A good starting point is to plan for what you need and then add in your wish list. If you are moving up, that becomes easier in that, you may have 1-2 children already in school. You know you need the 3rd bedroom, possibly a 4th. It's the first-time buyer who struggles, specifically, the newly wed couple. Often, they forget to think 3-5 years ahead. Those next 3-5 years will likely bring about some dramatic lifestyle changes. Babies, day-care and schooling needs. Parks, shopping and possibly dropping the second car, meaning walking distance to groceries becomes a must. Under-buying, then, becomes a financial issue as now, when you least expect it, you have outgrown your home too soon. If you find your Realtor trying to explain this to you, please listen and digest what she is saying. We know, we've seen it, and, while, at the time of suggestion, a lot of buyers respond by saying "you're trying to get me to purchase a more expensive home so you can get more commission". Do the math, we don't make a whole lot more in commission if you increase your purchase by $50k. You, however, stand to lose a whole lot by forcing your hand to make your sale and re-purchase too soon.