Finding the less-than-perfect version of your dream home
Hoping to buy a home you’ll love living in? Be prepared to sacrifice what you can live without.
“I’ve seen more buyers making compromises since about February of 2021,” says Maggie Lee Wells of Keller Williams in Lexington, Kentucky.
Now, with interest rates ticking up but the supply of homes remaining low, real estate professionals say buyers will be scratching more features off their wish lists.
A report from HomeLight, a real estate referral company, finds that in the past year, 80 percent of buyers had to compromise on certain home features.
The single biggest compromise, from 48 percent of survey respondents, was paying a higher price than originally anticipated. Following that, 31 percent indicated they purchased an older home than they initially wanted, 24 percent settled on a smaller home and 23 percent bought a home in worse condition than they expected. A smaller lot, fewer bathrooms and a worse location were the next most common sacrifices.
Yes, there will be compromises, says Tyler Forte, CEO of Felix Homes in Franklin, Tennessee, but buyers should be careful that they’re forgoing only wishes, not priorities. “For instance, (a buyer) who prioritizes a great school district might have to choose an older or outdated home. Someone who prioritizes new construction may have to start looking in cities or neighborhoods that are less expensive.”
A clear line between priority and nice-butnot-necessary items is key, agrees Doug McCoy, director of the Center on Real Estate Studies at Indiana University. “I think it is possible homebuyers may act out of fear, desperation or impulsiveness in the current market.”
One concession McCoy cautions against is purchasing property in an undesirable location, such as a home on a busy highway.
“Buyers must stay disciplined in making a strong location choice. Location is the primary driver of sales. If the home’s location is undesirable, it will hurt its appreciation and liquidity, the ability to sell the home down the road,” McCoy says.