I often find working with First Time Home Buyers enjoyable, not only because I’m helping them to find a new place to live, but also because the process seems to help them determine what their priorities are in life. What I mean by that is that if you’re thinking of buying your first home, you want to start thinking very hard about your Needs vs. your Wants.
Why is this important? Because when you’re a First Time Home Buyer you will undoubtedly find that you will have to compromise on some items that you would love to have in your first home, but won’t be able to afford. Sometimes I’ll get clients who want to live in the nicest neighborhood in town – maybe the community they grew up in. But what they don’t realize is that these excellent neighborhoods also come with an extremely high price tag. So that’s the first reality check to face.
The most common “Wants” are things like a fireplace, deck or patio, maybe a second bathroom, or finished basement. Now, some people may think they need these things in order to live happily, but most of us can get by with a roof over our head, solid doors and windows, and maybe a nice cozy bedroom or two.
So here’s my advice to you if you’re thinking of buying a home for the first time. Write down all the things you currently have in your living scenario (whether it’s your apartment, your parent’s house, or college dorm room). Most of these things on the first list will be Needs, unless you happen to have a lot of amenities already.
Now make a second list that includes the “If I could live in my dream home what would I have” stuff. Dream big too: maybe a whirlpool tub, 3-season porch, or stainless steel appliances.
After you’ve made both your lists, start swapping out anything you think should be on the other list, until you have a nice balance of Needs and Wants.
(Hint: your Need list should be a bit shorter than your Want list)
Here’s a nice starting point for your Lists:
- Bedrooms
- Bathrooms
- Square Footage
- Garage Stalls
- Single Family, Town Home, Condo, Twin Home
- One story, Two story, split level etc.
- Built after 1950
- Formal Dining Room
- Dishwasher
- Porch/Deck/Patio
- Central A/C
- Forced Air Heating
The list can go on for however long you want it to, but remember, the longer your Needs list is, the more homes you will be excluding from your search.
I’d recommend making these lists before you meet with a Realtor or Mortgage Officer, and that way when you sit down with them the first time you can show them your list and watch as they compliment you on your planning.
This will help prepare you for some of the compromises ahead. And remember, just because you don’t get the doubled-sided fireplace in your first home doesn’t mean that your next home won’t have what you want. The important thing is to get the essentials, and be happy with where you’re at, and where you’re headed in the future.
Nice post Steve.
It is funny how most of us are really driven by the wants. The smart people (and often the wealthy people) are driven by their needs.