Week 6

This 8-week series, How to Find the Perfect Home for You and Your Budget, will show you how your next home can match your wants, needs and, most importantly, your budget. There’s no reason you can’t dream big with this next purchase, all the while working within your budget. Even though you may feel more financially secure if you plan to use funds from the sale of your current home, moving up to a new home requires some self-evaluation of what’s next, a mortgage strategy to make it affordable, and then putting it all together for a successful purchase of your “perfect” home.

So far in this series, you’ve learned how to finance your next home, how to narrow down a location, and how to decide on your criteria for a new home — but you haven’t been able to go house hunting just yet!

You may think that waiting this long to see homes is making the process way too slow, but it isn’t.

It’s important to first figure out your answers to each of these three items — criteria, location, budget — before you start looking at homes or you could end up with the wrong home for you.

Go back to these previous articles if you need a review before moving on with today’s article:

• Questions to Ask Yourself Before You Ever Start Looking at Homes
• Are You a “House” or a “Location” Person?
• How to Finance Your Home Purchase

Your budget, location, and criteria are intertwined and play a key role in finding the “perfect” home for you. You can get this home by understanding how these three items influence each other and how they need to balance each other out.

How each is linked is essential when looking for a home that is affordable, meets your needs, and will satisfy most of your wants.

Here’s your homework before you go house hunting:

• Clearly decide what you want your budget, location, and house criteria to be; and
• Understand how each one can influence the others in your search for a home, and that you’ll most likely need some give and take to make them align (more on this later).

For example, if you move one of these three pieces of the puzzle, such as changing your budget, you’ll impact the other two — such as the the features you can afford in a home in the same location. To stay within your budget, you’ll need to decide if you want to change locations to get the home you want OR do you keep the location and change your home’s criteria? 

I call this my 3 Bucket Strategy.  Everything you can possibly think about when it comes to finding a home fits in one of these three buckets.

The 3 Buckets – Budget, Location, and Criteria 

Now you need to understand about “getting into alignment” at this point in the home-buying process. It’s based on my analogy of 3 buckets.

Each and every factor that you can think of when you are buying a home fits into one of these 3 buckets:

1.) Budget

2.) Location

3.) Criteria (The first two are obvious but for criteria, it’s things like how big, how many bedrooms, how long you plan to live there, condition, etc. Aspects about the home itself you require.) 

Each bucket doesn’t have to be equal in “weight” but the total weight combined of the 3 buckets must balance the scale they sit on to be in alignment with the market — that is your ultimate goal.

Put simply, these three categories — budget, location and criteria — need to be in alignment in order for you to find the right home, in the right location, and be within your budget.

Fill Your 3 Buckets in the Right Order

First and foremost, you must understand what you are putting in each bucket and make sure you use this order: budget, location, criteria.  That way you’ll be able to house hunt with a plan and a purpose!

This order is crucial and that’s why you should first figure out your budget bucket for a new home. 

• BEGIN with what you want to pay per month, THEN know how much cash you have for the purchase (including an estimate on the profit from the sale of your current home, even if you are buying first and selling second), and THEN bring that information to your real estate agent and lender to have them tell you what your price range should be and what to expect as far as what type of home you can get in the location(s) you have identified.
• NOT the other way around, which is what most people do — they decide on a purchase price first and then have no idea if that fits their monthly budget. Doing it that way is a recipe for getting a home that’s too expensive or not something you’ll like.

Of all the buckets, it’s important to get your budget figured out before you start looking for a home. And then don’t change it until you’ve exhausted adjusting your location and criteria first before deciding to alter your budget.

Next, focus on the location bucket. 

• Where do you want to live, and why? Did you want your next home in the same community or neighborhood as your current one? What characteristics are most important to you for the location you’re thinking about? Are you open to another location that may have the same feel as your first choice?
• For example, if you love walkability or an easy commute, there are plenty of neighborhoods that fit that particular need, even if it’s not the one you originally had in mind. 
• If you’re more of a “house person” and not wedded to your current community, then you’re more willing to be flexible with your location since your next home’s features and aesthetics are most important to you.

Third, focus on the criteria bucket. 

• What do you really need in your next home? What do you want but not necessarily need in a home this time around? How long do you plan on living there?  What do you want your life to be like during that time period and how will your new home influence this life?

Remember, you should have gone through each of these buckets and “filled” each up.

Alignment = The Perfect Home for You and Your Budget

After filling your buckets, you need to make sure that there is alignment between each of the three buckets and what the market will provide so they don’t spill over into “no-house land.”

For example — if you won’t compromise on location and can’t change your budget, then you must focus on making changes to the “criteria” bucket. 

That means, you might want to consider a fixer upper or a two bedroom plus a basement instead of three bedrooms on the same level. That way you can still have the location and budget that you want most.

Can you see how you need to make adjustments and that each “bucket” influences the others?

Approaching your home search in this very organized and methodical way may sound silly or boring, but it works. It’s absolutely normal to have this give and take, and you’ll be in your new home in no time!

Feeling Frustrated?

If you ever feel like you are frustrated during the house-hunting process, don’t forget to return to this bucket analogy — 3 buckets that need to be aligned or balanced on a scale.

Go back and make adjustments to your buckets if you need to. Ask yourself what you can let go of. Do you really have to have every single thing on your list in this home?  

And, if you are still running into trouble, ask yourself how long you’ll be living in this home. That can add some clarity to what you put in each bucket. 

For example, it will help define what you really need in this next home in terms of criteria and location, and what can wait for another move. (But if you think it’s your forever home then you need to really start compromising and also prioritizing certain things.)   

Also remember that sometimes it’s a matter of timing. Just because the perfect home isn’t on the market today, doesn’t mean what you want is not possible in that location for the criteria you want. For example, during the holidays fewer homes come on the market, but come spring, the home you’ve envision will be right there waiting for you.

I’m Here to Help

You don’t have to figure this all out on your own. That’s what I’m here for! 

I can tell you whether what you want is doable or if you’ll need to make some adjustments. Plus, I’ll know if it’s just timing that’s making your home search harder than it needs to be, and I can let you know when you can expect homes to come on the market. 

This is another reason why I tell my clients who are buying and selling at the same time to be in touch with me well in advance of when they want to move — at least several months if not a year.

Figuring out your location, budget, and criteria plus making adjustments or waiting for the right time if need be does take some time. But, remember it always ends with finding the perfect home!

You’ve learned how to put it all together by aligning three very important “buckets.”  Now you can house hunt with a strategy and find a home that is perfect for you and for your budget.

I’m not done yet with this series! Next up for week 6 — What You Need to Know About Buying for Schools. This is something every buyer should take into account whether they have kids or not.