Home Buying 101 – Working Through Wants vs. Needs
October 18, 2016 · By Orchards Walk
Meet Tom and Jennifer, newlyweds looking to upgrade from their current apartment space as their family begins to grow. The couple has done their due diligence getting financials in place, hiring a professional realtor, and scouting a community they’d like to call home. They attend every open house and presentation centre in the area, and have viewed over 30 homes in the past month but still can’t come to a decision. There have been many properties within their budget and location requirements, but Tom and Jennifer still haven’t found a space they both agree on. She wants an entertainer’s kitchen with large open concept; he wants a double garage with ample space for his tools and hiking equipment.
Does this story sound familiar? Whether you’re a first time buyer or a seasoned real estate investor, buying a home can be an overwhelming experience and oftentimes difficult to find a middle ground between wants versus needs. In the case of Tom and Jennifer, what they need is a strategy for weighing each property viewed in a methodical way. The following outlines 3 steps to sorting through the noise to arrive at a final purchasing decision.
1. Write it down
Grab a pen and paper, create two columns and title one “wants” and the other “needs” or download our worksheet here. “Needs” are going to be the functional features required in your home such as number of bedrooms, yard area, or garage space. “Wants” are going to be the nice-to-have’s (but not necessary) items such as a walk-in closet, granite countertops, or hardwood flooring.
2. Share, Compare & Rank
If purchasing with a significant other you may wish to do the above exercise separately and then compare. After sharing your lists and consolidating with each other, go through and rank each need and want in order of what is most important to you. Using a quantitative scale from 1-10 will help you measure different properties down the road. After attending an open house, evaluate the property using your weighted list and add up the scores for each. This will allow you to focus on only the homes with the highest overall scores and simplify the decision making process.
Unless you are building your dream home from the ground up it is unlikely you will get everything you want on that list. While you will certainly find everything you need, keep in mind compromise will likely play a role in your final purchase decision. Whether compromising with your spouse or compromising with your own wants and needs, keep an open mind to the bigger picture. If you reach a fork in the road refer back to your scores to back up your decision, and help you find the best balance between the two.