Four Hard Realities of Buying a Home

LSS Center for Financial Resources
Breck Miller, Community Relations Coordinator

Do you want to buy a house?  Great!  What are you looking for in a house?  Not sure?  That’s ok.  Oh, you want to figure it out as you go through houses and think about it on the fly?

If you have started looking at homes, you know how hard it can be to find the right house right now.  At least that’s the case in our market.  That just means that you are going to have to do some soul searching for your next house.  Preferably, you are going to have this figured out before you even start looking.

What critical things need to be figured out ahead of time?  Here’s a list of 4 hard realities of shopping for a new home.

The very first hard reality you need to come to grips with is that there is NO SUCH THING as a perfect house.  You can custom build your own home and it still won’t be perfect.  Expecting to find the perfect house will only result in your expending great deals of time, physical energy, and emotional investment that will most likely only result in frustration.

Now, if your perfect house is something with four walls and a roof somewhere in South Dakota, that you can find.  But the reality is that most of us are going to be pickier than that.  Much, much pickier.  And I’m not saying “Don’t be picky.”  Just be realistic about finding that perfect house and the fact that it probably doesn’t exist.

Second, you need to separate the wants from the needs.  Neither is bad to have.  You just have to be brutally honest about what you really NEED.  5 bedrooms for 3 of you?  That’s probably crossing over into the wants category.  Walkout basement?  Probably the same.

You certainly can and should get most of what you want in a home.  Rather, being honest about wants and needs helps you figure out exactly which aspects of a home you are absolutely not willing to give up.  I know, it’s America.  We tend to really struggle with turning wants into needs.  Unfortunately, it may not be very productive as you are searching for a home.

House Closing

The third hard reality is that you will be paying good money for the house you end up buying.  Buyers always want the most house for their money.  Sellers want the most money for their house.  Same words, very different results.  The appraisal, done after a purchase agreement, will assure the buyer they are paying fair market value for the home.  If not, you have the right to renegotiate with the sellers or walk away from the deal.  (But that’s a whole other blog post in itself.)

In some parts of the country, they naturally price homes high expecting to negotiate.  That just isn’t how it usually happens around here.  Our Realtors are good at pricing homes right where they should sell (assuming the seller takes their advice).  There are situations where you may get a good deal, but they will be hard to come by.  If you were the seller, you would want the most money you can get.  Expect the sellers of your new home to have the same idea.

Fourth, the last hard reality in this list is that your choice of Realtor really does matter, and it’s more than just their bubbly personality.  Can you buy a home without using one?  Sure.  Around here, the seller almost always provides the money for the buyers’ agent, so you are getting their services for free.  Think the seller will reduce their price if they don’t have to pay any Realtors?  Guess again.  See hard reality number 3, paragraph 2.  Your Realtor can help you process through all of the above-mentioned points and then provide some accountability if everything goes well.

damaged house

I recently heard of a situation where the buyers found existing water damage that was not disclosed by the seller.  But they are the owners now and are just stuck with it, right?  That’s not really how it works with the law.  Once the Realtors got involved and the seller was informed of his liability, he basically offered to pay anything to make it right as long as he didn’t get sued.  That’s a Realtor that’s still working for their client even after the commission check has been earned.

Finding that your Realtor just isn’t cutting it as far as what you need in services?  All agency contracts do have an expiration date where you are free to find another agent.  Don’t want to wait that long?  You can cancel your agency agreement.  Everybody on the contract needs to agree, but they aren’t usually going to argue and build that kind of a reputation.  You have to have a good agent that you trust to work on your behalf.  There are a lot of agents like that.  It may just take a bit of work to find them.

So there you have it.  Four hard realities you need to process through before you settle on the right house for you.  Notice I didn’t say ‘the perfect house’?  THERE’S NO SUCH THING.  But we’ve already covered that.

If you are even thinking about buying a home, check out Center for Financial Resources’ free Homebuyer Express classes.  They are held twice a month and you can attend either in-person or by video conference if you are a little too far away to make the drive to downtown Sioux Falls.  You can find the schedule of classes on the calendar found here.  You can also register by calling us at 605-330-2700.  We can help you figure out all this and a whole lot more before you end up in that ‘perfect house’ that turns out to be the perfect storm.

Powered by Firespring