Planning to purchase your first or next home is very exciting (if a little scary). Setting priorities can be a challenge.
Setting priorities is key to your success, but not easy for many reasons:
There are so many things you may want or even expect: a price in budget, a good and quiet neighborhood, and turnkey condition, certain schools, a larger home or yard, a tree lined street, a pool, a cottage, or any number of things.
Before looking, you may be positive that what you want for the price you can pay is doable because you saw homes online and they looked about right.
The first time or two out and really looking at homes for sale can be very disturbing. After seeing acceptable looking homes online, why are the homes you are looking at still so terrible for the money when you see them in person?
Or why are the disclosures filled with a long litany of needed repairs?
This is the adjustment to reality period, and it’s stressful and depressing for most first time home buyers in Santa Clara County. (See Managing real estate stress and worry on another of my sites.)
Adjusting and Setting Priorities
Some buyers have a must-have list that doesn’t line up with their budget at all.
How do you get your must-have list ranked so that you can buy something that’s in reach?
Start asking yourself (or yourselves) some either-or questions.
- Which is more important to you, home size or home condition? (Smaller house in great shape or larger house that needs work?)
- Which really is more important: having 3 bedrooms and 2 baths close to work, or on a nicer street with a further commute?
- Is it better for you to get a low price and put in the “sweat equity” later, or would you prefer to buy a turnkey home but pay top dollar for it?
- Do you have to have a formal dining room or would you give that up to be on a better street?
Most people want or expect more than they can actually afford in the current market. This is true in all price ranges, whether entry level condos or luxury homes.
One of my Realtor friends likes to say that if you have 3 items on your list (price, location, home size), the odds are good that you’ll get two out of three. That’s often the case.
Often the choice comes down to location – you may be able to get what you want for your budget, but not where you want it. The trade-off may come in the way of a longer commute, lesser school district, higher crime area or some other factor.
Or, if location is a non-negotiable, your choice may be to get into a certain area with fabulous schools or a great little downtown area, but instead of a house, you’ll be purchasing a condo or townhouse. Or a house which needs a whole lot of work, or is smaller and has a smaller yard than you want.
Write down everything that you want, but start with two categories: the must have list and the want to have list. This is the first step in setting priorities. (Include things to avoid, too.)
Now pare down your must have list as much as possible (whether it’s budget, amenities, geography or anything else) to what you believe is your true, top priorities – only allow yourself five or ten items on this list. The shorter it is, the more attainable it will become, most likely.
Next, choose the top 30% from that group. If you could only pick 1 item as your #1 priority, what would it be? (Safety, schools, location, space, land, condition, house – vs. condo or townhome?) What would your second and third priorities be?
If you are a couple or group buying together, this is the hardest part: your priorities need to be closely aligned with each other’s. When a couple wants to buy a home but cannot agree on setting priorities or order of priorities, it becomes immensely harder to find a home that will meet both of their expectations, likes and dislikes. It can even make home buying futile if their ideas are vastly different.
Please note: if you have close friends or relatives, they may have a different list or a different order of ranking. This can trip you up if emotionally you get yanked or pressured to their list, not yours. (Will elaborate more on this at the end of the post.)
With a little experience in the market, and some helpful education from your buyer’s agent and from reading pre-sale inspections and reports, you may find that you need to juggle your home buying priorities a time or two before they completely settle in place. That’s ok. There is no substitute for the education & experience you get from going out and looking at the homes (and possibly bidding on them).
Setting priorities, experience, juggling, and input from others
Remember, when you are feeling ready to write an offer, it’s been a process and you took time to get to where you are with your budget, your tolerance for needed repairs, the location, and everything else that went into your setting priorities for yourself.
Well intentioned friends, relatives and co-workers may give you loads of advice when you bid on a home or get into escrow. To restate (because it matters tremendously), it is important to remember how much you have learned since you started this process, and that many of them know as little about the market you’re now in as you did at the very beginning of the journey.
Their well-intentioned “help” can cause you to second guess your choices, feel uncertain and upset. You spent a lot of time in setting priorities – and they may be viewing the ranking of what is most important in a different order !
A solution: for that reason, if there are big “influencers” in your life who will weigh in when you buy a home, it’s probably good to get them involved at the very, very beginning. Let them come with you to open houses and in seeing homes, let them know that what is asserted in the media may not be, in reality, exactly what they might think. That way, they will understand intimately the choices you have had to make, the priorities you decided upon, and why a particular home is the best fit for your budget and priorities right now.
They cannot understand your experience with the market or the way you have prioritized if they haven’t walked with you through all the homes and analyzed the vast number of issues together with you.
If you’d like to get started on buying your first home, please give me a call or shoot me an email to discuss the first steps.
Related reading:
What to consider when buying a hillside home in Silicon Valley
Why do sellers care if the offer has a loan or is all cash?
