Don't get suckered in by the luxury features - here's how to find an affordable, quality house that is exactly what you want.
It's tempting to go a little crazy when browsing for a new house, especially if you're lucky enough to be in a good market where sellers are plentiful and you have lots of options. Want marble bathroom floors? Jacuzzi on the deck outside the master bedroom? Perhaps that luxurious foyer with built-in mirrors from floor to ceiling will impress guests more than a grand fountain in the front yard?
There are literally hundreds of luxury features available, and following the home refinance and remodel craze after the 9/11 attacks it seems every little shack in the boondocks now come with granite countertops and dual-showerhead bathrooms.
But hold on a second. While it is in our nature to enjoy being pampered, bear in mind that you're buying a house, not a weekend getaway at a spa. If you're like most people, you have a limited budget, and that means you make trade-offs in one form or another.
Your first concern should always be to cover the basics. The location is important. What good is a fantastic house if it now tacks on an extra hour each way to and from work? You won't be able to enjoy your house, because you'll be stuck in traffic most of the evening! Secondly, shake off the idea that bigger is better.
How big of a house do you actually need? How many rooms and how much storage space at roughly how many square feet? Keep this in mind as your realtor starts talking about twice as large mansions that just so happen to be just north of your upper limit (and the termites and rot in the basement that knocks the price down is for you to find out later!)
When it comes to houses, quality is king. Pay more for a modest house with a solid structure and you'll save yourself a lot of costly and inconvenient repairs down the road. The bargain mansion with problems may seem like a fair trade-off now, but wait until the basement toilet blows up at 3 AM and you may get second thoughts.
Maintenance is another issue that is easy to poo-poo away when looking at houses. An elaborately landscaped yard looks great when kept in shape; it looks like something out of a horror movie when it's not. If you haven't dealt with this before, here's a newsflash: it takes a LOT of time and hard work to keep all those bushes, flowerbeds, trees and lawns in check.
This is great news if you're newly retired and need something to keep yourself occupied. A family with two working parents and a few young kids may not be interested in doing the work. If you like a landscaped yard you can of course hire someone to do it for you, but then you should budget money for a landscaper as part of the cost of the house. The same applies to outdoor decks and the like that also needs time-consuming maintenance.
Next, let's look at the bells and whistles. The first question you should ask yourself is: will I actually use this? If you don't see yourself deriving much benefit from something, then what's the point? Buy it in the hope that some future buyer some day will decide that this particular gizmo makes all the difference and happily overpay you? Get real - you're buying a house for YOUR benefit, so that YOU can live there.
The quality aspect carries over to the luxury features. Is this something that is likely to break some day? If so, can you repair it or will it become a big chunk of trash lodged in or around your house - the bragging point turned into an embarrassment? Does it have potential to cause damage if it breaks?
Lastly, don't stretch as far as you can just because, well, you CAN. When a lender gives you an upper limit that they are willing to give you, that doesn't mean you should necessarily aim for that much. Focus on what you really need and a few select comforts that you're confident will be put to good use and declare victory there.
So what if you could have gone another $50,000 and gotten yourself another 1,000 square feet? All you'd really get is more to clean, fatter property tax bills and more uninvited relatives making use of your spare rooms. And if your finances turn sour for some reason, you have much better odds of pulling through with the smaller house. The bottom line: keep your focus on your needs and keep your cool.
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