How to compromise on that dream home

IT goes without saying that when looking for a property, most buyers who are purchasing a home for themselves to live in want a home that they love and can see themselves being happy in for many years to come. Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, says that around 90% of would-be buyers start their real estate search online through property search portals and typically have an idea of the type of home they are looking for and roughly the price range they can afford.

However, Goslett notes that oftentimes these two aspects come into conflict with each other, especially when the buyer gets closer to finding their dream home.

“For many buyers there is a gap between what they can realistically afford and what they want, which leads most to the question: What am I prepared to compromise on? Certain features may have to be forfeited in order for the buyer to stay within a range that is financially feasible. For example, they might have to opt for a home without a pool, or one that is slightly smaller than what they initially wanted in order to be within the right zoning area for the school they want to send their children to,” says Goslett.

The National Association of Realtors in the US conducted a survey among homebuyers to find out where they made compromises on home purchases. The survey revealed that just 33% of buyers did not compromise at all, while the majority had to let go of something that they wanted.

The most common compromise that buyers made was on the price of the home. Goslett says that a close second to the price, was the size of the home, with around 20% of buyers purchasing homes that were smaller than they originally planned on buying.

“Some of the other factors that buyers compromised on were the condition of the home, commuting distance to their workplace or family and friends, the quality of the neighbourhood and the reputation of schools in the area,” says Goslett.

He notes that depending on their current life stage and future plans, every buyer will have their own unique requirements and areas where they will be prepared to compromise and areas in which they will not compromise.

“For example, for buyers planning to have children, proximity to good schools could be a priority, while older buyers facing retirement might want something further away from the hustle and bustle. In order to purchase a home that includes the aspects that are most important to them, buyers will more than likely be prepared to make a few compromises on the less important requirements.

Goslett says that the buyer’s financial restrictions will largely determine the features that they may need to compromise on.

“If the buyers are a young couple with future plans of having a family, they may want a three-bedroom home to have the space they would need to grow.

“However, if their budget only allows them to purchase a two bedroom home, they could try to find a property with the space to build on and add the extra room at a later stage. While the home may not currently meet all the requirements immediately, it is important to find a home that can grow and change with your needs as property is a long-term investment,” explains Goslett.

Irrespective of what compromise is made and the type of home that the buyer decides to buy, sustainability is a key issue to home ownership.

“Buyers need to ensure that they can afford and sustain the necessary financial obligation before making the commitment. To precisely assess this, a buyer can use the resources available to them such as financial advisers, banks and bond origination companies. This will give the buyer estimated repayment figures based on bond requirements,” he says.

It is important to remember that it is not just the bond repayments that should be taken into consideration as there are other costs involved in a property transaction and home ownership. These costs can add up to a relatively large amount and it is essential to include these when assessing affordability. Where possible, buyers should not compromise on location.

A property that is situated in the wrong location is probably not going to be the right property to buy, even if it has all the other features that the buyer is looking for. “Location is a key influencer when it comes to a home’s future investment potential. It is far better to compromise on the features of the home than on where it is located,” advises Goslett.

He concludes by saying that buyers who purchase a property in the right location that meets most of their criteria will be able to enjoy the benefits of an accommodating home that grows in value over the long-term.