6 must-have characteristics to look for when buying a home
With home prices down, foreclosures up, there’s an influx of great homes on the market with less competition vying for them. The next year or so may present some prime buying opportunities for those willing to do some homework, and who meet the prerequisites of home ownership. Although it may seem counter-intuitive, one of the most important things to ask yourself when you start looking for a house is: “How easy will it be to sell this thing?”
Sound personal finance decisions usually involve thinking one step ahead. You should not be content just to get into a house that you emotionally fall in love with; rather, you should be looking to buy a house that you can get out of quickly, easily, and at a profit should life happen to throw you a curveball that will force you to move.
What characteristics lead to a house being highly “marketable”? Granted, there’s not an exact set of criteria that will be ideal for all people in all situations and markets, but the more factors you have working in your favor the better. We’re not talking about buying a house for the purpose of flipping it. We’re simply talking about buying a house that you can live in, put some sweat equity into over time, and then sell for a profit.
Unexpected Moves Can Happen to Anyone
When I purchased my first home 3-1/2 years ago, I was thinking I would be in it until I was able to pay off my mortgage. I loved the location, the house, and the neighbors. My wife and I both had solid jobs. It was also a house that we could grow into: 3 bed, 1.5 bath, 1,500 finished square feet, full basement, and a nice yard — all in an area with a low cost-of-living and high quality-of-life.
Fast-forward 2-1/2 years: a fantastic job opportunity presented itself. We decided it would be best for us to sell and move two hours away. Thanks to some smart thinking before we bought the house and some elbow grease, we were not only able to sell the house in just three months, but make a 10% gain on it in a horrible market. Additionally, we were able to do this via “for sale by owner”.
As you shop for a home, keep in mind these characteristics that not only make it appealing to live in now, but will make it have greater equity in the future (thus making it easier to sell).
The Right Size
You need to not only look for a house that fits for you, but also that fits for the majority of the population. Here’s what the majority of households are looking for or are able to adapt to:
- Look for a minimum of three bedrooms and a maximum of four. Two bedroom homes mostly cater to single people or couples that do not or will not have children (and aren’t concerned with selling their house). At the same time, homes with five bedrooms or more cater to those who have a healthy number of children, or plan on having them in the near future. That makes three- and four-bedroom homes the perfect size for the majority of the population, with three bedrooms being ideal. If you haven’t noticed, large suburban homes that are energy drainers are quickly going out of style.
- In terms of number of bathrooms, 1-1/2 or 2 will make the home more desirable than just one. If you’re looking at a house that could cheaply add another half or full bath, you might have a good find.
- Square footage is important, but not quite as much as the number of bedrooms. Typically, you’ll want more than 1,000 (with room to expand) and less than 2,000 for a home to be comfortable and efficient for the majority of the home-buying population.
Curb Appeal That is Ripe For Improvement
When it comes to selling a house, the biggest challenge is getting people in it. The key is to find an attractive home from an architectural perspective that needs aesthetic upgrades. Consider yourself lucky to find a home with an ugly paint color and really poor landscaping. These are two things that you can spruce up on the cheap with a little sweat equity.
If you’re willing to get up on the roof, a home with a poor roof may present an opportunity to get a credit during the bidding process (with a recommendation from an inspector) that is worth the price of a professional doing the job. You can then turn around and buy the materials and do it yourself, while pocketing the remainder of the money to apply towards your loan or other projects. Our current home has an older roof with a few warped pieces of wood sheathing. We were able to get a $6,500 credit for a project that is costing just $2,000 to do on our own.
On the extreme end of things, our current house had an ugly asphalt driveway that was falling apart. What was attractive about this is that the driveway is only about 25 feet in length so tearing it out and replacing it only cost us $1,700. Now, it looks great!
Here are some other cheap ways to improve a home’s curb appeal before you sell it:
- Paint the shutters
- Power wash everything
- Refinish the porch
- Add landscaping that looks great year-round
- Water the grass until it’s the greenest on the block
- Add a nice new mailbox and address numbers
Good Structure
When it comes to buying a home, you want to avoid major structural issues that will cost you big money to fix or will diminish your leverage when it’s time to sell if you haven’t fixed them. Here are a few of the biggest culprits:
- Do not buy a house that has issues with the foundation. If you see large cracks in the foundation outside or on the basement walls, or the walls look like they are caving in some spots, kindly leave the house and look elsewhere.
- Termite or carpenter ant damage is common in some locales, and it may be hard to find an older home that hasn’t had a little damage at one point or another. The key here is to find a home that does not have major structural damage and has no signs of current issues. Some home inspectors will actually insure for a year or more that there are no current signs of infestation, and if they appear, they will cover the costs to terminate.
- Have you ever walked through a house that makes you feel claustrophobic or just didn’t feel right? Odds are that other people feel that way in the same homes. Don’t buy them. This may be remedied by knocking down a wall or two in some homes, but that can be an expensive project and you may be risking structural damage.
- Avoid buying a house that has signs of mold or water damage. They can be very expensive to fix and usually are signs of larger foundational or roof issues. Here again, a good home inspector will be able to test or look for both.
- Beware problems with the electrical and plumbing systems. These are a home’s lifeblood, and replacements are costly.
- If you buy a home with an ancient furnace, you may want to have it checked out beforehand. Any home with steam radiant heating may cost you a pretty penny to heat or replace.
Easy-to-Improve Internal Aesthetics
As with structure, making major changes to the interior of a home can be costly, but there are some cheap projects that can really change the perceived value and quality of a home. One summer’s worth of weekends spent on the following projects can not only improve the marketability of your home, but make it much more enjoyable for you to live in. Look for a house that will allow you to do most of the following, as one with all of them done already will probably be selling for a premium:
- Add nice, modern-looking light fixtures
- Add fresh earth-tone paint
- Replace beat-up light switch covers
- Refinish hardwood floors
- Replace linoleum with tile
- Add a backsplash in the kitchen
Here are some of the features most people want, but won’t be cost-effective for you to add:
- Central air conditioning
- Nice kitchen cabinets (or cabinets that will be nice when refinished)
- Fireplace
- Garage
- Energy-efficient windows
An Under-Priced Location
It seems that more people are looking to purchase in nice urban areas that are close to work versus suburban McMansions. Not only do these homes save commuting time and money, but they almost always have a lot more character and are much more structurally sound. In my most recent home-purchasing experience, I looked at a few houses built after 1999. All had large foundational cracks and cheap materials throughout.
Another bonus to purchasing a home in a more densely populated area is foot and car traffic. My first home was located just off the corner of a highly trafficked street. Because of this, I could put up a ‘for sale’ sign pointing towards my house. I ran through 20+ flyers a day and ended up selling the house to someone who drove by it. You don’t get this kind of exposure in the ‘burbs.
Highly desirable locales are going to cost you a premium, but you may be able to sell a home quicker. What I have searched for in my first two home purchases are areas that are relatively cheap compared to highly desired areas, yet have most or all of the same features. Others will realize the same thing when searching for a home.
Good School District
Even if you never plan on having children, it is important to look within areas that have a reputation for having good schools. Do it for the kids. If not yours, for the kids of the people buying your house from you.
The more desirable characteristics you’re able to find or add to through inexpensive sweat equity will improve your chances of not only selling your home, but selling it quickly and for a premium.
What characteristics and specifications would make a house more appealing to you?
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There are 59 comments to "6 must-have characteristics to look for when buying a home".
Great tips. I recently purchased a new home and it would appear my home fits all of those requirements.
That is a perfect and essential list when looking for a home. I am a regular property investor and when I’m hunting for a property for myself, a friend, or even a client, I always first ask what the pre-approved budget/mortgage is.
Knowing what your limit of affordability can eliminate time wasted looking at homes you will be unable to afford. You need to be realistic on your monthly mortgage payments too.
I had one client this summer that was trying to convince her husband that they would “stop going out for dinner” and “skip the vacation” so they could get into a $600K condo when in reality all they could really start off with was a $400K place. As much as the commission on the higher property would have been nice, I had to convince the couple that they should start with something they could truly afford and build off that towards the next level.
In areas that geat snow sidewalks are good for the neighbours, but not so good for the owners. Cities often insist on a clear sidewalk. A house without a sidewalk means not having to worry about shovelling immediately after a snow fall.
No sidewalks? You would rather walk in the middle of a snowy street against traffic? Seems dangerous.
-a Michigander
I have never heard of this “healthy number of children.” I don’t want to have an unhealthy number of children….
I recently purchased a new construction home, and about 6 months later an elementary school started going up on the end of the block ~4 houses away. I think I got pretty lucky here.
All of the smaller houses are getting torn down to stick McMansions on tiny city lots, so they won’t even be an option for the next generation of home buyers. I’m glad to have gotten in on the window of time when single people weren’t condemned to condos for life.
We purchased our first home 3 years ago and the main factors in buying it were that it was built in the mid-90’s, was in good condition, and it had a lot of square footage (1600 on the main level). We are now trying to infuse some charm into the house, charm that they just didn’t build in the 90’s—and buying a large house has made these improvements extremely expensive. We are 30 with no children and it’s much more space than we will ever need. If I were buying now I would look at the quality of floor coverings, moldings, tile work, cabinets, and the character of the house—not just the size. Character is extremely expensive to buy after the fact!
My wife and I looked at 50+ houses before we purchased. Our realtor really took the time that was needed to get us into the ‘right’ house. In the end, we were desiding between 2 homes – both built in 1950 as paart of ‘returning GI’ neighborhoods. Our realtor really pushed us toward one of the 2 (we bought that one) and I didn’t really know why because it was 20k less (i.e. lower commission for him.) He later told us that because one of our main criteria was ‘resale factor,’ we needed to purchase the home which appeared less cramped and looked more solid. WhenI read this post, it all made more sense!
Thats a great realtor. He looked out for his buyers interest and not his. Would love to find someone like that now that i have been looking for a new home.
I don’t want to buy a house that someone else wants, I want to buy a house that I want! Different people are going to have different lifestyles – not everybody is going to need to get out of a house quickly.
I will probably end up buying a condo, but a very small 2-bedroom house has more charm, and if I could have a really good house I wouldn’t mind waiting longer for it to sell – and my career is stable enough that this would be OK. I’m also going to be careful to save enough as a down payment that selling at a small loss wouldn’t be disastrous.
@Emily H. It’s all very well and good to buy the house you want without worrying too much about resale value. As long as you walk into the situation knowing that a 2 BR home is likely to take longer to sell than a comparable 3 BR home, it’s fine. The main point of the article was only that sometimes your situation can change suddenly, which can really make you think you thought of these things before.
Before I actually bought a house, I never thought I’d think about resale value myself. Looking at real estate in this market, however, definitely changed my mind. We saw the most perfect little house, a nice stone cottage that had been immaculately maintained with a good yard in a nice neighborhood. But, it was so close to a major highway that you could barely hear yourself think from the traffic. I’m sure the owners of that house bought it because they loved the house so much that they could overlook the noise. That’s fine, but now that they’d like to move to a larger home, they’re stuck for the forseeable future unless they want to lose their shirts financially. This was a huge object lesson to us as we continued looking. I didn’t instantly love the house we ultimately bought, but I knew that it would meet our needs and that any improvements we made would only add to its value. As the months have gone by, my appreciation for these characteristics and the house as a whole have only increased.
Those looking at antique homes should check the structural integrity of the foundation and the sill. This can be done fairly easily using a screwdriver and a hammer, but takes a while. You point the screwdriver towards the sill, joists and beams and gently tap with the hammer. If the screwdriver penetrates the wood, RUN don’t walk away from the house. Foundation work is very expensive.
Another thing that is fairly easy to do yourself is to insulate the attic and basement crawlspaces. It adds some value, has a quick payback if you do it yourself, and makes the home much more comfortable.
As for the size of the house, I believe that varies based upon where in the country you are. In some areas, 1,600-2,000 sf is perfect, in some areas it is incredibly small.
Also, when selecting a house think about what works for you. I love to walk, and won’t live in an area without sidewalks that go someplace worth walking. In my current home I live a short walk from conservation land, and will add that as a requirement for any other home if I ever move from here.
From my experience using a steam radiator heating system does not cost a lot of money to heat a house.
It actually uses less energy than central duct heating and is more cost efficient because large metal radiators stay warm for a long time after the heat cycle is off.
Replacing a boiler for a ratiator heating system isn’t cheap, but then a central heat furnace isn’t either.
Very informative article. Here in Los Angeles, we’ve gone through a cycle of fleeing the city for the ‘burbs. Now it seems that everyone is fleeing the ‘burbs for the city … and the prices reflect it.
I fundamentally disagree with this poster’s theme, “one of the most important things to ask yourself when you start looking for a house is: “How easy will it be to sell this thing?””
If that’s the most important thing to you, then you shouldn’t be buying. Rent a small space that you like, close to your work if you can, and invest the difference between a mortgage payment and your rent in a balanced mutual fund. The costs of owning a home for a few years – fees, taxes, insurance, interest, improvements, TIME, UNCERTAINTY, and the likely increase in commuting costs and, again, TIME – are going to surprise you. Yes, you might come out a bit ahead financially, but if you’d put all that time and energy into your career or graduate education or relationships instead, it would likely have a less risky and higher payoff. The opportunity costs of short-term homeownership are staggering.
I say buy a house because only because you want to make it your home for a long time. And when you buy one, look at it as savings or as an inflation-hedge, but don’t look at it as an investment. Real house prices are constant, or only very slightly increasing, over time.
That said, if your house purchase is viewed through long term glasses, then pick based on “soft” or qualitative criteria. Use your gut. Introduce yourself to the neighbors and see if they are likable. Look for solid architecture that makes sense in the context of how you live your life. Look for beauty. Look at the streetscape and the neighborhood. Is it lovely? Try to minimize your commute. Live near a coffee shop, library, and grocery store if you can. And no sidewalks, no sale. Quit complaining and shovel the snow, and do it because you don’t want your neighbors to slip and fall, not because “the city will fine you for it.”
A very large part of why we’re experiencing this current financial, and likely economical, disaster is precisely because people stopped viewing houses as homes and starting viewing them as investments, or potential income sources, or what have you. It affected our individual decisions, and it affected our policy decisions. Viewing homes in context of your finances is important, but viewing a home ONLY in terms of finances is toxic, and it’s far more important to live true to yourself in a way that makes you happy and stress-free for a few years than it is to come out ten grand ahead.
I realize this post began with an “unexpected” opportunity that needed to be capitalized upon. If you’re younger, as his site 20somethingfinance suggests, then new opportunities shouldn’t be unexpected. In fact, they should be sought after. And while you’re seeking them, don’t saddle yourself with a home. Delay the gratification, go to work, and five or ten years from now, buy yourself a beautiful, personal, well-designed home (with a huge down payment you built up while renting those small apts in the city).
This is one of the smartest posts I’ve seen at any site. One of the things that’s hard to get around, when the place is your home, is the fact that real estate is an investment. It’s a financial instrument.
It’s wonderful to find a house that’s beautiful, charming, and perfect for you and your family. But it’s ideal to find one that’s beautiful, charming, perfect for you and your family, and a smart investment. If you can’t find the ideal, go for the one that has good resale potential and then fix it up the way you want it.
On the two-bedroom question, I sure could do with two bedrooms, myself, instead of the four-bedroom palace I’m living in. On the other hand, unless I move to a retirement community or an apartment (anathema, both of them), nothing that I can afford will be anything other than a challenge to resell. I’ve actually thought of removing walls to combine two of the rooms, creating a three-bedroom house with roomier private quarters…but the fact is, within a given development four-bedroom houses get a better price than three bedrooms. Instead, I’ve turned the unused bedroom into a gigantic storage room, which has come in pretty handy. Now I’m thinking of putting a freezer in there, to stockpile food lest the recession deepen into an actual depression.
Another suggestion: Keep your house in for-sale condition at all times. First because keeping your house maintained helps keep up your property values and your neighbors’. And second because when you do go to sell, you’ll have a lot less hassle in getting the house ready for market.
BTW: Paint is cheap and fast to apply. I paint the interior any wacky color I please and plan to slap on a coat or two of boring neutrals a week before the next For Sale sign goes up. There’s a limit to how much you should constrain your own lifestyle for the sake of some unknown future buyer.
Very nice points made in the article. We had two additional criteria: First, we wanted to be able to afford the payment on one income because my boyfriend’s industry is unstable. We survived his company’s bankruptcy and return to school with this strategy.
Second, we wanted to make sure that we could rent it for more than the payments, insurance and taxes. We could have purchased a much nicer house in a town about 15 miles away for the same price, but we bought in a college town with a strong rental market. If we ever have to leave while the housing market is so slow, we’ll almost certainly not lose money while we wait to sell the house at a better time.
I agree with HollyP regarding house size. 1600sqft here in Texas would be considered tiny. Our house is 2500sqft and is considered ‘average’. Also, MissyP is right on about charm. Ugly tile is expensive to replace – as are cabinets that you tell yourself you can live with – trust me, you can’t! Landscaping is another expensive fix-up when it’s non-existent. Half of our backyard was lost to a slope – which cost us $3000 to add a retaining wall and replace the fence – but we now have full use of almost 1/4 acre! This spring I’ll start adding trees and shrubs for privacy/shade. On the upside: Location! location! location! We’re in a great school district with 2 schools within 1 mile (one backs to the neighborhood. Also, the city limits border is across the street – so we get all the benefits, but at cheaper county rates.
When I was looking, I looked at all those plus close to my job, since I drive all day, i do not want to commute to work 1 hr each way like most people do. sometimes you need to buy something a little smaller than you would if you were in the suburbs. but its worth it.
Great list! We are looking to buy in ’09 and needed some additional advice when it comes to what to look for in a house.
Some of our factors include close or a reasonable walking distance to public transit, walking distance to shops, restaurants, cafes, etc (since we will be down to one car) 3 bedrooms, one and a half or two bathrooms, hardwood floors, built before the ’50s and so on.
The problem is, everybody seems to have this criteria.
I am so SICK of the advice to buy a 3 bedroom home. All my young single friends now have 2 extra bedrooms to heat/cool/clean.
I think that the only thing that keeps demand for 3 bedrooms high is the idea that “no one else will want a 1 or 2 bedroom”. It is just self-prepetuating nonsense, and causes an enormous waste of resources.
This advice is all probably good if you’re in a similar situation to the guy who wrote it, but a lot of people aren’t. Sure, a lot of people want three-bedroom homes, but what if you *are* single, or you *do* have a “healthy” number of children? I mean, the article basically says “don’t buy a two-bedroom, they’re for people with no kids, and don’t buy a five-bedroom, they’re for people with lots of kids.” Well yes, of course they are. That’s why they exist, because not everyone has 2.3 kids.
And the whole article seems to over-emphasize the actual home and under-emphasize the location of the home. Like with the size of the house, this is a personal preference thing, but I know that for me, the most annoying thing about the place I live now isn’t anything like the tile being ugly, or the driveway being asphalt instead of cement (I live in a place where a lot of people don’t even have driveways). It’s the neighbors across the street who come home at 2am blaring music so loud from their SUV that if I were to be playing my own music at a reasonable volume, inside my own place, the music from their car would drown it out. You can fix anything about a home except the neighborhood. People in the comments are complaining about home repairs costing $3000. I’d *much* rather deal with that sort of expense than the expense of moving again because I can’t stand my neighbors. Luckily I’m only renting this place and I’m not stuck with it for the long term.
I also question the wisdom of buying a house specifically because it’s close to work. There’s two reasons I think this that don’t apply to everyone, though. One, I think if you’re going to buy a house, you should be ready to stay there for a long time, simply because of how the interest payments work out. You earn almost zero equity in your home for the first few years, except in the case where it’s value on the market increases, bu I have a feeling that won’t be happening a lot in the near future. The second reason is because I work in the software industry in the silicon valley. This is a place where people switch jobs fairly often. Most people don’t stay at a job more than about 5 years. That means that I either have to buy a house every 5 years, which goes against my first rule, or I have to either look for new jobs close to where I want to live, or deal with the commute. I’d prefer to live in a place I love and figure out a way to make my job work around that, rather than live in a place that I sort of like that saves me commute time.
The type of home we live in so dependent on our own personal needs and the standard of living to which we’re accustomed that making sweeping generalizations like “everyone needs a three or four bedroom home” seems to end up being far too broad to be useful. Imagine someone who lives in Manhattan reading this advice (about a lawn and mailbox).
Like I said, it’s not bad advice, it’s just advice that only applies to a very specific part of the population of the US. Buy a house that you want to live in. One that, when you’re there, makes you feel comfortable and not irritated. Buy one in a place that you like, with weather that you like, near people that you like, close to the places you enjoy. Whether the paint on the shutters is bright or the light switch covers are shiny and new really doesn’t matter very much to me, I care more about these other things. You can set your own priorities.
Great tips for buying a home.
Buying properties without a proper knowledge is risky. I believed if we follow the tips that has been laid out, we not only owning the best property but will lead us to a Financially Free person within a short period of time
This article has some great advice. My wife and I bought our first house 4 years ago planning to stay there a long time and raise a family. Then due to some unexpected changes, we ended up moving. Luckily we managed to hit some of the article’s points like good location and good schools. We had an offer in about 50 days when the average in our area was 120 days. Plus due to some smart renovations we made money even in a down market.
This advice doesn’t just apply to a specific part of the population. A house is not like a car. You WILL be selling it someday unless you are part of the .01% of the population has a family home that passes onto each generation. You don’t just drop a house off at the junkyard when it’s got 200,000 miles and a blown engine. I recently read a statistic that the average American lives in their home around 5-7 years. No one is saying don’t buy a home that you don’t like just so you can resell it. What the author is saying is that you might want to take into consideration reselling the home because things change even when you don’t expect it.
I’d add to the list:
Plenty of natural light. Adding solatubes or transom windows isn’t very expensive and can bring a huge amount of light into an otherwise dark home.
If you have a three-bedroom home in a good school district (and your resale group is families), then I’d make sure you’re on a quiet street with good sidewalks. Busy intersections give moms heartburn.
Any obvious natural disasters waiting to happen? Avoid them. For example, seasonal creeks (prone to flooding), at the base of steep mountains (mudslides), very heavily overgrown wooded areas (fire).
Finally, walking distance to open space (parks, playgrounds, etc.) is a great bonus and selling factor, especially if your yard or house is a bit on the small side. We live in a 960 sq. ft. condo with a small yard, two kids and a large dog. Our proximity to lovely public parks makes it work for us.
My fiancee and I consider ourselves to be so very lucky to have found a great house! We live in a major Texas city where real estate is ridiculously (stupidly, ignorantly) expensive. We almost gave up on owning a home. But we finally found a great house: 3 bedroom, 2 bath, 1600 sq ft (a nice size), nice large yard, trees, fairly close to downtown, in a so-called ‘up and coming’ area, for $150k. I think that fits the author’s criteria, lol! The house has NO curb appeal (but I’m gonna fix that), the first time we drove by I told my fiancee ‘nevermind’! Then we went back and toured it, and were so surprised – the layout is wonderful, open, it just felt right. It has a wonderful open floorplan, vaulted ceilings, and only needs some updating that we can do without too much expense. The payment is comfortable, we were very careful not to aim too high! We are confident that in several years, we can either rent it out or sell it (whichever is better financially). I encourage everyone to think creatively when buying a house – look past superficial flaws – some things are surprisingly easy and fairly cheap to fix/update, just takes some work. Also find a really excellent realtor to help you. Ours worked with us for 2 years to get us where we needed to be, since we weren’t quite financially ready at first, and didn’t push us into something we couldn’t handle.
One question: Why would anyone want to replace linoleum? I just ripped the tile out of my kitchen and replaced it with linoleum. It looks far, far better and as far as taking care of it, there’s no comparison. Sweep and mop it once a week and it looks great all week; our old tile would require a cleaning every day to look good.
And it’s hard to beat linoleum for durability. In many 100-year-old houses, the linoleum is still in nice shape even after all that time.
I like what you have to say about size, but I think you’re off on number of bedrooms. For young families right now, three kids is the new two kids — not everyone has three, but it’s increasingly popular. So I’d say go for a four or five bedroom house if your resale market is young families. You also might want to focus on a home that has at least three of those bedrooms on one floor. As a mother of young children myself, this is my number one biggest home buying and renting issue. My children are too small to be a floor away from their parents, and while they won’t be forever we can’t compromise on their safety while they are that small.
Also, you should look for houses with at least one room that can be used as a bedroom on the main floor. Increasingly people who are thinking about aging in their homes are told to look for houses where they won’t have to go up and down stairs every day in case they are unable to handle that as they get older.
This is throw-away advice. Defects that would make a house hard to sell would also make it unattractive to BUY. So this advice applies only to crazy people who somehow WANT to live in an ugly house, or those whose taste is far outside the mainstream.
What in the world would the two of us do with three whole bedrooms? I’m sure we’d find some use for a space that big, but it seems irresponsible to me to buy a place that is so incredibly much larger than what’s necessary. In most cases, two people just don’t need that much space.
I don’t see how it would be prudent for us to have bought a larger place when we’re perfectly happy with our 1br 1bath condo– sure, something larger might be easier to sell later, but just think how much more interest we would have paid in the meanwhile!
Also, anything that would lower the selling price you’d be able to get later– this is irrelevant if the price you are paying to buy also takes this into account. “Pay $100,000 more for X, so that you can get $100,000 more back when you sell!” just means borrowing money (and paying interest!) unnecessarily.
In Houston, many, many houses on the market have had some kind of foundation work. If you have the kind of soil we have here, it’s just something you deal with. When we were looking for our first house, I was advised (by someone who doesn’t live here) to run from any house that had ever had foundation repairs done. So we bought a house that hadn’t had any foundation trouble. Surprise! The first summer we lived there, there was a drought and the soil changed so much that we had to spend thousands on foundation repairs. (No one ever told us that in Houston, you have to water your foundation.) If we had bought a house that had already had warranteed repairs, we wouldn’t have had that expense.
So while the rule against houses with foundation repairs is probably a good one, generally speaking, don’t follow that if you live in Houston.
@ David Farqhar – I think many people prefer ceramic or stone tile over linoleum because it’s more durable and looks nicer – the same reason people like granite countertops. They can also add a bit of luxury into the house, depending on the style. Linoleum, from my experience, wears out very quickly and tends to look cheap and tacky compared to tile. I think many people feel the same way, and this is probably why the author of this post recommends upgrading your linoleum to tile.
@ John M. – I think that the advice is suggesting that people find places that don’t necesarily look too good on the outside and THEN fix them up and replace/upgrade components that need it. He is advising that you should renovate things yourself while you’re living there or before you move in so the house looks BETTER than when you bought it – thus adding value to the house on top of the price you paid for the house itself. So he’s NOT saying that people should just live in ‘ugly’ houses – he’s saying people should buy ‘ugly’ houses and then make them look way better, since it’s not too difficult and it adds value.
Good grief, it’s entirely possible for children to SHARE a bedroom.
I’m on the same page as Tyler Karazewski and Jason, while a house is part of your financial portfolio, it is–first and foremost–your home. As Jason pointed out, as a culture, we seem to have forgotten that. (Thank you HGTV.)
Yes, as JD’s guest blogger pointed out, you want to make sure that your home is safe and sound before you sign the deed so many of the tips on structure and curb appeal make sense. Or at least, if it isn’t, you want to be well aware of the risks and costs for making it more habitable. And, of course, as a homeowner, we want to WANT to come home, to be home, stay at home, etc. But this whole business about size and house features and location are really more about lifestyle choices and, to a certain degree, sociological trends.
My husband and I live in Fort Collins, CO — Money magazine’s #1 (2007) and #2 (2008) place to live (small cities). We’re shopping for our first home, and I can tell you, even in this terrific town, we’re frustrated by our housing options. My husband is 28, I’m 32 and even as we bring children into our family, we want to live as small as possible. For environmental reasons as much as for financial reasons. We don’t want more than 1200 square feet, total, even with two kids, two dogs and two cats. But, by the same token, we want to have a small yard to live in, too. (So townhouses don’t appeal to us.) And we’re not alone. Many of our friends (in their 20 and 30 somethings) do not want 3, 4, 5 bedroom houses with 2/3 full bathrooms, walkout basements, separate living and entertainment rooms, workout rooms, glamour baths, sewing rooms, storage for piling stuff rooms, etc. Our entire social network is more interested in small spaces, shared spaces (kids bedrooms for sure, Ms. Clear!) and the greenest living possible (not greenwashing).
What I hope that anecdote illustrates is that we’re really looking to find a home that reflects OUR values and needs, and we’re not at all concerned with trying to predict those of some future buying contingent. Perhaps, that will prove to be short-sighted, but as TK points out, since our first 5-10 years of mortgage payments are headed to interest not principal, I think people shouldn’t buy a house unless they really want to establish some roots. Owning a home isn’t just “investing” in property; it’s also (and perhaps even primarily) about investing in yourself, your family and your community.
Very suburban advice. Those of us who prefer urban settings should start with a walkscore of at least 80, (check your residence at http://www.walkscore.com) rush hour transit service with better than 15-minute frequency, and at least 1/2 to 3/4 of a mile from the nearest freeway.
One of my biggest requirements 18 years ago was being near transit. And I mean GOOD transit, within a few blocks, and a bus that runs more than once an hour.
I’ve never regretted making that my number one priority, since public transit reflects my value system.
Everyone has their own priorities. I’m happy where I am, and my children (who came along later!) share a room and know how to use the bus.
I’m surprised that a number of people took the ‘things to consider’ in the original post as Dire Commandments. The fact that most people have children does not mean you must never, ever buy a 2-bedroom house; only that you need to consider how purchasing “a house for us two” may affect your ability to sell it later.
On children sharing bedrooms – they can, but for many people, having their kids NOT share is one of the reasons to move up from an apartment to a house.
All good advice, we mostly followed the list but as always do what works for you.
I believe location is the #1 factor. I also learned that school ratings drive the cost of homes – at least in the suburbs. I compared the prices of homes against the school ratings and this is true. We do not have kids (yet) but we considered it and started looking in a different location with good schools. We like our location now. It is family-oriented, nice location and the house has a lot of the qualities we were looking for.
I guess the British housing market is more segmented. one of the easier types of property to sell is the first time buyer home – depending on location that could have between 1 and 3 bedrooms, but will always be at the bottom end of the market. They are a great candidate for sprucing up with a lick of paint because many people buying for the first time have never done any diy and don’t think that they know where to start.
For those who don’t expect to have any number of children, healthy or not: two bedroom houses are okay if they are on a smallish, easy to maintain lot and are a single story. Take it from one who tried to sell a two-bedroom home on a large, unruly lot!
Also, did anyone mention closet/storage space? It is something that is so important to the livability of a house, but hard to put in after the fact.
Re foundation issues: I also live in an area with clay soil that expands and contracts and generally moves around, so one of the things I looked for was a pier and beam foundation. Much easier and cheaper to fix.
Re ceramic tile in kitchens: It’s popular because people don’t cook. As long as you don’t plan to stand on it for any length of time or drop anything on it, tile is fine, and it looks pretty. I’m planning to replace my existing vinyl tile with linoleum, which is what the house originally had prior to an avocado-era remodel.
@ #30: Halfway through your post, I thought “Well, you should have watered your foundation!” I guess that’s something native Houstonian’s know. There should be an advisory about that in the house contract! Sorry about the lack of warning!
Shortly after I got married 2 years ago, my wife and I bought a 1600 square foot 3 bedroom 2 bathroom house on a corner lot. So according to this article it should be prime to sell. We still have work to do though. In 2009 I hope to paint the inside, update the light fixtures, and add more storage space.
I don’t know how easy if is to sell the house in which I am living, but it’s very easy to rent out rooms and make twice the mortgage payment, so why would anyone want to sell such a cash cow?
Amen. We made big mistakes when we bought our first house, so when we bought our second, we had pretty much the same logic you outline here. It’s been great. We have a house much more suited to us and one that other people want too.
Good tips to consider.
If you’re older and buying a house, also consider handicap accessibility– for your parents when they visit, or you in your old age. 3 flights of stairs may not be ideal 5 years from now.
The other thing is, you could look at his resale value tips as good things to consider for rentals as well. A lot of families in urban areas may want to rent for precisely the same reasons others want to buy, and it’s a decent alternative when the market is not ideal to sell.
We actually almost put in an offer on a 2bd/1ba on a quarter acre lot, 3 blocks from a terrific little downtown area– but we were beaten in the first 24 hours by 4 cash offers; after that the family pulled the house and decided not to sell. Oh well. And after 2 years of following the market, this was the only one I even got close to making an offer on. Good houses are out there, you just have to figure out what’s right for you and then stick to it, regardless of what your agent or anyone else may say.
i will add that older home tend to be built with better quality than newer home.
besides, most newer home are 2 story which can be a problem for the disabled and pregnant women.
i myself prefer older home where i can get a decent size yard and no stair to deal with.
Dave F, Escape velocity I agree with you, linoleum (we’re not talking vinyl flooring) is such a great thing for the kitchen, and possibly other areas of the house. We had it installed in the kitchen of our 1920’s house and it looks and wears great. The only problem is that the people who know how to install it are dying out.
Great tips, but I’d amend the “right size” suggestion. Three bedrooms might make sense if you’re buying a house in a sprawling suburb, but in expensive urban areas, smaller homes are extremely marketable. In San Francisco and New York, for exampe, 1- and 2-bedrooms (not to mention studios) are always in hot demand.
I swear that I didn’t write this article to create dissent over the merits of linoleum floors. =)
It’s great to see all the great discussion. J.D. is lucky to have such smart commenter’s.
One caveat: school districts change.
The high school I attended redistricted and started pulling nearly half its students from very poor, very high crime inner city neighborhoods (the rest come from the very wealthy neighborhood where I grew up)
15 years ago everyone wanted to attend that school, but now no one does.
And forget “antique” houses.
The large (nearly 6,000 sq.ft.) 1920s house I lived in had large public rooms we never used, but small bedrooms, no closets, tiny bathrooms, bizarre plumbing & electrical issues, and expensive to repair plaster & lath construction.
And a kitchen no bigger than the one in my current townhome (it wasn’t the lady of the house doing the cooking back then)
#33, invisible.bees: I too live in choice/chump city, where you do. I had my house inspected and the inspector never mentioned the plastic qest plumbing (class action lawsuit) that was in the house.
Every plumber I have spoken to has said to sell the house. Perhaps if you want a smaller house look on the fringes of old town or north of Mountain Ave. Unfortunately all of the new developments have HOA fees that only go up. Buy in established older neighborhoods. Lots of depressed/forced sale houses here if you look. Money Magazine needs to come here when it snows and see the terrible road conditions and the ice on all the residential neighborhoods that the city won’t bother with.
It is also important that you buy a house that has room for appreciation, especially if you are planning on doing remodeling. Don’t work on building a high-end house in a low-end neighborhood; you won’t get a return on your investment.
I disagree a little bit on the school district thing, but the list above is a great one!
See my recent entry on buying a home:
http://www.scordo.com/blog/2008/11/buying-the-house-that-is-right.html
Re: one of the most important things to ask yourself when you start looking for a house is: “How easy will it be to sell this thing?”
On the contrary, the thing I always ask is:
“How easy will it be to BUY this thing?”
If ***I*** can buy it, it MUST be easy for someone else to buy it, QED it is easy to sell this thing.
Jason, I’ve recently purchased my second home, a 2bed 1.5bath condo in a popular neighborhood near shopping, a great pedestrian path near the river, and just 5 miles from the beach. I specifically purchased this place with the thought that I’ll sell once I’ve had a chance to fix it up and the market has rebounded. Then I’ll look for a place I would like to retire in.
My last house was a wonderful 1920’s bungalow back east with gorgeous, unpainted wood trim and hardwood floors. We LOVED that house. Unfortunately, 3 years after buying the house my relationship ended and we were forced to sell at a time when the market was down.
I think that the point of the post is that you never know what changes might take place in your life (Not to mention the market, how many people foresaw the current crisis?) so you need to look at more than just all the little things that make people fall in love with a home. If you’re trying to be smart with your money (which you presumably are if you’re reading this blog) then looking at resale is extremely important.
In my case I specifically bought what I did when I did because the San Diego market is so ridiculously pricey that this foreclosure problem gave me the opportunity to finally get into a home. A home that should bounce back in a few years and allow me to use that money to buy what I really want. FYI, if you live somewhere like SoCal where housing prices are very high, even apartments aren’t cheap so buying (if you can) makes sense because it’s an investment while renting is just money out the door.
Interesting article and ensuing discussion. I absolutely concur about cosmetic fixers with solid systems and foundations.
Here’s another slant on the issue: we’ve bought a couple of houses that we’re pretty sure very few other people would want to buy–but that have features that make them very attractive as rentals.
For instance, they’re very close to lots of amenities (parks, a walkable business district, good public transit to the downtown core), but are located on on “marginally residential” streets (lots of businesses, parking lots and apartments). Solid rental/occupancy histories, but an owner might not want to live there permanently–that’s fine with us.
We got them at great prices, lived in them for a while, improved them with sweat equity. The first house we bought is now a rental more than paying for itself. We’re planning to buy our next house and put our current place up for rent in the next few years.
Maybe not an approach for everyone, but it works for us.
Ok, I am 19, newly married (under a year ago), in a new job field (with college) and looking to have a baby in the next few years. We don’t want to rent tiny apartments in the city. I grew up on farms, working with horses. Plus, inner-city isn’t safe! You don’t hear of little old farm houses getting robbed, just city houses/condos. I want to look at things that concern ME while buying a house.
1. Can we afford it?
2. Exactly how much work does it need?
3. How much land is there? Under an acre is not ok.
4. Is it safe for my kid(s) to play outside?
5. Does it have a barn and how many horses can it hold?
6. How far away is the closest neighbor? I have a hound dog and he DOES howl.
7. I refuse to pay an association fee… its MY house.. bad enough I have to pay taxes.
People need to realize that not everyone is looking for shoveled sidewalks and close neighbors and modern lighting and neutral colors. I never even want to meet my closest neighbor. Not due to unfriendly-ness, but due to the fact that his house is a half mile from mine.
I’m looking at an 1100SqFt 3 bedroom ranch with a walk out basement, small barn, and over 1.5 acres sitting on a main road that leads straight to all my family. There are no sidewalks for miles, its 5-10 miles from everything but a gas station, my neighbor is on the other side of his corn field, and I have room for 3 horses. They are asking $80,500 and I will offer $70,000. It needs paint, the field needs turned, and one of the bathrooms and the basement need finished. It fits MY lifestyle. I don’t give a rat’s ass if it fits yours.