What to Look for When Buying a Home

From the many articles I have read about how to buy a home, I have never encountered this information which I learned from experience.

Buying a home is not a commodity. It is not something fungible. It is not automatic, remote, virtual, effortless, dispassionate, technological or without your active involvement.

Yes we use computers, yes we use virtual tours and yes we use technology to communicate and process the transaction. 

But don't let the tools blind you as to what is going on. 

Buying a home is, for most people, the highest dollar denomination transaction they will do possibly in their lifetime - until they buy the next one.

It is a highly personal decision and each home is unique.

Even when buying a track home in a new development, you will notice that each home is different: the location is slightly different, the way the sun hits it is different, the sizes are not same, there are subtle differences, the floor-plans are not the same, etc...

Not only does the process of buying a home touches YOU the buyer at an intimate level but the process of listing the home for sale touches the SELLER at an intimate level too! 

If you could sit in the background on a real estate transaction negotiation, you would be amazed that over 50% of the negotiation is about managing EMOTIONS! not about money or terms! Expectations and emotions are the #1 aspect when dealing with real estate, even at highest levels! 

When you buy or sell a $70M or $180M home that is even MORE the case!  

This is why there are countless examples where a Seller did not accept a higher offer because the bidder was a corporation and preferred to sell for less to a human, or the older couple who wants to help a younger couple start out or, and this is a real example that I witnessed, the letter the buyers wrote moved my clients (the Sellers) so much that they decided to accept their offer. 

This leads us to the first Factor to Look For:

1) Do you have a connection to the home? 

Buying a home is first and foremost an emotional interaction between the Buyer and the property.

The deal is made when you correctly manage both, the Buyer's and the Seller's emotions and expectations! 

Forget about the money, the terms, the "logical" aspects of the purchase. Do you and your espouse connect with the home?

If the answer is no, that’s your cue to move on.

The first thing to understand when you buy a home to live in, is that you are not buying an investment, it could turn into an investment in the future, but that is not the primary reason.

The primary reasons are, can you see yourself there? does it make you feel like you want to be there? does it motivate you to rush home from work? if you work from home, do you see yourself spending countless hours there? Does it make you feel alive? does it make you happy at the prospect of living there? If you invite your friends, are you going to be proud? are you OK with spending 5 years before you move up?

Every time I have a new client calling me, the first thing I ask them is, have you gone to Zillow or Redfin? do you have an idea of what would you like to buy? 

Then, after we are done with feeling good and contemplating pie in the sky, we are ready for the hard landing on the "real world": 

2) Can you Afford it?

In my experience I have encountered only two extremes, never anything in the middle:

Either the answer is NO, you cannot afford it, so then the question becomes how could you afford it, or,

You are surprised when you realize you can afford it right now!

Of the two, the most common one is that you cannot afford it unless you make some changes! 

The answer to this question is not black & white. 

Mortgage brokers give potential clients a ceiling of what they can afford. The way they do it is they input some basic numbers into a Real Estate Calculator and then they state "the maximum you can afford is $$$" and throw a number.

100% of the time that number is incorrect! 

Because in reality, you have an affordability "range". The range depends on many factors and what your tolerance for change is. 

If you find a home that speaks to you and you have been told that you cannot afford it, talk to me first before you ditch the deal. 

Wouldn't it be better then to start at #2 to see how much you can afford before you even look for a property?

That sounds logical right? That is the advice professionals in this Industry give out, but...no one follows it.

Why? 

Intuitively we all know it is incorrect!  

It is a recipe for failure. I have never seen anyone successfully buy a home by first looking at how much they can afford.

The deal is the driver, the specific home is the motivation, it is the life-force, it is the impetus that moves you to act. 

Buying a home is a lot of work, stress, expense (aside from the purchase itself), time, decisions and it is also an emotional roller-coaster! 

Unless you are highly and extremely motivated chances are you won't have the energy to buy anything! or you might ditch the idea of buying anything "until such time as you are ready" except that the "right" time might not ever come.

Waiting for the right moment never works because the right moment does not arrive by itself, you have to create the right moment! 

Real Estate is not easy, convenient, effortless, automatic, virtual or inexpensive. It is the opposite! 

Why people do it? Because it is extremely emotionally rewarding! and a few years later, economically one of the best decisions you would have ever made!

Have you noticed I have not spoken about rates, location, income, credit scores, inflation, appreciation, tax deductions or the economy?

Because in my experience none of these are a factor. 

Sure all these external factors have an influence, they are challenges to overcome, but in the final analysis a highly successful Realtor gave me a great piece of wisdom which is the next factor to look for when buying a home:

3) Is this the Right Time for You to Buy?

Though I list this as #3, it is quite important and I covered this on an earlier blog post here:

When Is the Right Time to Buy a Home

and finally, last but not least,

4) Timing:

In my professional experience over the last 20 years, timing is the trickiest of them all.

A piece of real estate could sit for ages, no showings, no one seems interested, price keeps dropping, no action. 

You notice it since it becomes a financial opportunity, you go and see it and it so happens the home speaks to you and motivates you to place an offer. 

Just when you are considering putting an offer, The Hulk or Mr Hyde if you are British, steps in with all the reasons why you should "think about it", after all, the property is just sitting there, what could two or three more days do? after all prudence demands it, right? 

Then, while you are "thinking about it" even though you connect with the property and can afford it, another 2 or 3 buyers come out of woodwork and buy it! you stare in disbelief.  

I know because this happened to me many years ago! I lost a good deal that way.

I see this frequently: a few months ago we listed a property and it sold in 3 days, during the first open house, Sunday, the successful bidder shook hands on the deal with me on the spot! There were 5 other people who wanted to make an offer on Monday. We received 4 more written offers the week after the first open house.  

Time is the enemy of real estate purchases and loans!

Before you look at the property time is frozen, as soon as you put your attention on it, time becomes your enemy.

I learned this from my awesome real estate mentor who made me prepare an offer before visiting the property for the first time! That day, I went to see a property for a client with an offer on hand! while touring the property there were two other buyers! I handed my offer right away and we got the deal! the other buyers were not prepared! this is how fast you need to be!  

Timing is sneaky because it seems you have all the time in the World, it slips by you and you don't even notice it. It sounds unbelievable that if the property has not moved in a long time that it would sell quickly...but it does! 

In essence:  

• Find a property you can connect with

• Work on How you Could Afford it

• See if this is the right time for you

• Act Lighting Fast