If you didn’t know, I was an active Realtor for about 5 years prior to joining the team here at the Center for Financial Resources. In that time, one of the earliest and hardest lessons I had to learn was that what I would want in a home and what my clients wanted could be entirely different – and that’s ok.
My first clients that I closed with were moving into Sioux Falls. I knew some information about them and thought I had some good homes picked out to show them. You see, they have 8 kids. I found homes in their price range with the most bedrooms possible. Even I was amazed at how many bedrooms I could find for them.
So what did they end up in? All 10 of them moved into a 3-bedroom home. It hasn’t always been smooth, but we are still great friends to this day. They have simply made it work.
So why on earth would a family of 10 move into a 3-bedroom home? It’s an issue of priorities – an issue all too many home buyers forget to address. This family was able to see the potential in the home and have since done some things to make it more workable for them. But apart from size, location was a bigger priority for them. The location of this home put them within two blocks of two parks, the bike trail, a library, and a city water park. To top it all, the home was on a cul-de-sac, so it was quite traffic-free and play time could spill out into the street without too much risk.
But still – ten people in a 3-bedroom home? Knowing the tiny little first home my in-laws lived in, I decided to look at some information on home size. According to the US Census Bureau, from 1975 to 2010, the average new home size in the Midwest has increased from 1580 square feet to 2265 square feet. That’s 43% growth in the average new home.
Now compare that to average new home sizes around the world. As of 2009, they include:
- Canada – 1948 square feet
- Spain – 1044 square feet
- Sweden – 893 square feet
- Hong Kong – 484 square feet
I’m guessing, regardless of size, most of those people love their new homes. Do you really NEED or just WANT that big of a house. Remember, a bigger house just means more cleaning.
Because financing is such a large part of home ownership, let’s take a look at that growth. Again according to the US Census Bureau, the average new home in 1975 cost $42,600. Yes, that really was for a finished, new-construction home. 35 years later, when new home size has increase by 43%, the average new home in 2010 cost $272,900 – 640% what it was 1975.
Perhaps a little more daunting than in the past, home ownership is definitely not out of reach for many, many Americans. However, given the rise in cost, it would be wise to be much more intentional about the home you choose.
- How much can you responsibly spend per month? (considered apart from loan pre-approval amount)
- Where do you really want to be? Heart of town? Edge of town? Acreage with room to spread out?
- What style (ranch, split foyer, etc.) of home do you want? Do you like climbing stairs?
- What amenities do you want nearby? Grocery store? Bus route? Fire station?
- How many toys do you need space for? Do you know the laws on camper/boat parking?
- How do you entertain yourself? Do you need a big kitchen to cook or space for a 90-inch TV?
- Who else will be in the home? Does it need to accommodate kids or a pet Greyhound?
- Are you willing and able to fix issues in the home or is a hammer just a fancy doorstop for you?
These are not generally items you want to make snap decisions on when a counter-offer is waiting for your signature. Make sure to consider these items ahead of time. Talk about them with anyone else you are buying the home with. Prioritize them from most to least important. Then write them down for accountability and evaluation later.
It may be a lot to think about now. But by being intentional about your priorities ahead of time, you are much more likely to LOVE the home you end up in.
June is National Homeownership Month. In honor of that, our blog and Facebook posts will largely focus on home ownership – from pre-purchase through maintaining that dream home. You can certainly consider all of these things on your own, but if you would like some help and guidance, we at Center for Financial Resources are more than happy to help you out. We have free Homebuyer Express classes as well as Pre-Purchase appointments in which we can help you with your budget and even improving your personal credit report so that you are ready when you need financing. You can find out more at this link.
I’ll be the first to tell you – a house isn’t great. But the right home for you can be absolutely amazing. Make sure you know what you need, want, and can afford before you begin shopping.
written by Breck Miller
photos courtesy freedigitalphotos.net