How to Balance Needs vs. Wants on Your Home Purchase
In addition to covering the basic questions about how you will finance the purchase of a home, it would be good to spend some time thinking about what you want in a home, and what you really need. Without such planning, you could quickly become frustrated that all the homes that meet your wish-list criteria look great but the asking price is nowhere near to what you can afford.
The widely watched HGTV network recommends you gather a list of criteria for needs vs. wants. Rather than just jotting ideas down blindly, HGTV suggests the following questions can streamline your thinking:
What do you dislike about your current home? You might have a specific kitchen design in mind. Maybe you’re expecting a new family member. If there are items that have you itching to move, those could end up at the top of your lists.
What’s the amount of space you want in your new home? Is there a set amount of bedrooms that you need? If you feel cramped in your current living room, get the measurements and compare them to what’s available on your home search.
Are there things about your home you would miss at a new place? These can be subtle features that likely won’t add to the cost of the home you’d like to buy. For example, you might like the way the sunlight hits your current home. There also might be a favorite public venue, entertainment district or schools that you don’t want to get too far away from.
How can you prioritize the list? Make it simple. Put the things you must have at the top. These are your needs. The things you don’t have to have, but would really love to, go on bottom. These are your wants.
What do you do with the list? Share it with your real estate agent. Perhaps the work of a licensed professional can get you to a house that covers all the needs, and sneaks in a few of the wants as well.
Think about the timeframe of how long you think you’ll stay in this house. According to HGTV, the average American homebuyer keeps a home for about nine years. If that sounds about right, think about if you’re willing to go ahead with a house that may be lacking some of the items on your “wants” list.
If you’re looking for additional ideas so you can formulate your needs vs. wants list, the Department of Housing and Urban Development provides a simple rundown you can find by clicking here.
Download our easy guide to learn about getting a mortgage and buying a home. Topics include:
- Where should you start?
- What can you afford to buy?
- How's your credit score?
- Down payment and closing costs
- Understanding your mortgage payment
Information in this article is general in nature and for your consideration, not as financial advice. Please contact your own financial professionals regarding your specific needs before taking any action based upon this information.