Unless you have an unlimited budget, you’ll likely have to make a few compromises when shopping for a home. In fact, even with an ample budget, finding a home that includes every single item on your wish list can be a tough goal to achieve — especially with inventory as low as it is now.
Common things house hunters typically end up compromising on include a home’s price and size, according to a recent trends report from the National Association of Realtors (NAR). But these are just the tip of the iceberg. Buyers these days make trade-offs on everything from architectural style to a home’s distance from family and friends in order to make a purchase happen.
Why do buyers compromise on the home they purchase?
Buying a house is often a balancing act that involves finding the right middle ground between your must-haves and your budget. This reality is what drives many of the compromises home buyers make.
What’s more, in an especially competitive market like we are experiencing, with limited inventory to choose from and record high prices, it’s even more common to find buyers making sacrifices in order to land a place. There’s far less opportunity to shop around at a leisurely pace in search of your dream home, or to hold out for a property that offers everything you’re looking for.
“While the pandemic-driven frenzy has made things more challenging for buyers, the truth is that buyers have to make compromises even in a balanced market,” says Dino DiNenna, Realtor and owner of Southern Lifestyle Properties in Hilton Head, South Carolina. “It’s almost impossible to satisfy your wish list unless you are a bazillionaire. To stay within budget, buyers have no other way but to compromise some items from their wish list.”
Where do homebuyers compromise the most?
Price of home
The amount of money spent on a purchase is the number one compromise buyers make, according to NAR, which found that 23 percent of buyers had to adjust what they ultimately spent. This reality is especially commonplace amid the current overheated housing market, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida.
“Many buyers begin their search only to learn that their dollars don’t go as far as they thought they would,” says Severance. “That is a reality check that happens very early in the process — in any market. But in this current market, with interest rates rising at a super-fast pace, it is a forced, non-negotiable compromise.” For each percentage point that interest rates rise, a buyer can lose almost 10 percent in buying power, she says.