Buying a home is a major life decision. It should not be undertaken without first doing some careful planning. What exactly are you looking for? Spending several hundred thousand dollars is justification to have a list of “must-haves” and also a few “wants” that could be used as negotiation points. We’ve broken this down into four basic categories for you:
Before we get into these in more detail, take some time to review your personal finances. It’s recommended that you pay off other debt before taking on a mortgage, so consider using a payoff strategy like the debt avalanche method to eliminate any high-interest credit card balances or personal loans. Do the best you can to put yourself in a steady financial position before you buy the house.
1. The home style and layout of your dream house
Home style can be as simple as choosing a house or a condo, but why settle for those limitations? Think about the layout that you’ll need for your living situation today and going forward into the future. Are you planning to start a family? That will require more space. Loving the single life? A condo on the beach is a cool spot to chill.
2. Preferred attributes of your new neighborhood
Some people prefer to go back to their roots and others are looking for something new. What is your preference? Spend some time contemplating this before going house shopping. Mortgages are multi-year commitments. That doesn’t mean you can’t sell at some point, but why put yourself through that? Choose a neighborhood with the attributes you want long-term.
3. Land for recreation and privacy
The size of the lot your home is located on is just as important as the home itself. It’s where you park your car, lounge on a Saturday afternoon, or spend time with a lawnmower and hedge trimmer. Expand your vision and imagine living your life on this property. Is there enough land? Will you feel cramped or limited by a lack of space? It’s best to address that now. You can almost always add more house with an addition or other home improvement, but you can’t add land that isn’t already there.
4. Development potential for the house and property
Combine additional land with plans to develop your property and this vision can turn into your ultimate dream home. Build an addition, put in a pool, or add a deck with a barbecue for steaks on the weekend. That’s a way of life that many of us dream of. Can it become a reality? Make the right choice when you buy your next house, and it’s certainly possible.
Other considerations: Costs and compromises
Once you’ve painted the picture for what you truly desire in a home, step back for a moment to contemplate costs and possible compromises you might be required to make during negotiations. The costs, obviously, need to be within your budget. Don’t go all the way down to the wire, though. Leave a few dollars aside in case you run into unexpected expenses.
As for compromises, that’s what your “wants” list is for. Put all of those on your original vision statement and then use them to barter if necessary. For instance, a whirlpool bathtub is nice, but you can always install one later. Green energy, like solar panels, could also go in the “wants” category. Just make sure all your needs are taken care of. Then make the deal.
Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their nine wonderful grandchildren and two cats.