Realtors can provide many insights into neighborhoods, economic trends, and home pricing – all while taking your family’s well-being into consideration. The line of questions typically begins with: What are you looking for in a home? Are you approved for a loan? Are there any specific locations you are considering? How much are you looking to spend?
The answers to these questions will give the Realtor a baseline to make recommendations of homes to their clients and advice based on the dollar amount a buyer would like to spend.
When this happens, the question “What can you afford?” has taken the place of “What do you actually need?” as the starting point for most home buyers. This line of thinking has resulted in a deep over-housing problem. Over-housing is the concept of paying too much money for housings, in relation to one’s income.
For that reason – you should always start your home search focusing on one critical question that many Realtors may ever tell you:
Buy only the home you need, not the house you can afford.
Don’t let yourself fall into the mindset of “buy as much and as big as possible”. Too often, the dollar amount that a lender has approved for the home buyer becomes the starting price range that the buyer begins searching for.
For example, if a buyer is pre-approved for a $500,000 loan, many buyers begin searching for the biggest house they can afford for exactly $500,000. Often times, this is encouraged by the lender and/or Realtor. This is because the larger the sale, the greater their profit.
Buyers too often create a list of “wants” for their new home while “actual need” is disregarded completely.
Bigger and more is so frequently interpreted to mean better. This ideology has resulted in the average American home tripling in size in the last 50 years. With little regard for the negative consequences, buyers too often purchase bigger and bigger homes, whatever size their income allows.
This thinking has detrimental effects on our well-being. We typically use on 40% of our living space on a regular basis. Meanwhile, the increased debt can contribute to mental and emotional distress. All of this excess space carries additional financial cost – whether the square footage is being used or not.
More is not always better. There are benefits to living in a smaller home. It is easier to maintain, less expensive, assumes less financial risk, results in less environmental impact, and frees up our resources to pursue life’s other passions.
Buying a home is a personal decision that should never be taken lightly. Only you know all the variables that will come into play when making your decision. But too often, the most important piece of home buying advice is what you hear least: Buy only the home you need, not the house you can afford.
Forbes.com / Investing / #DreamHome
The Most Important Home Buying Advice You’ll Never Hear from a Realtor
by Joshua Becker, Contributor
Aug 12, 2016
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