Your Dream Home is not in this Price Range, but your Starter Home is.

By
Real Estate Agent with Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities #1 in Forest Land Mgmt

Your Dream Home is not in this Price Range, but your Starter Home is.

I was speaking with one of our agents this last week who was feeling a bit discouraged, as were her clients. 

She has several first-time buyers that she is helping, and each had looked at a dozen homes, with several unsuccessful offers so far.

All of these buyers were not finding what they were looking for, they all had clear expectations for what they wanted, yet all were hampered by a budget that would not buy much of a starter home much less their dream home.

They had looked at so many homes and were discouraged to see that many of their “dream homes” were being sold before they could tour them, and others before an offer could be written up.

And still her buyers were not happy with any of these homes enough to jump on them and put in a full price offer, and all their lukewarm offers were turned down quickly.

All of these buyers were looking for their Dream Home and were critical of every flaw in these old and inexpensive homes.

Yet they continued to tour more, expecting to find their Dream Home in the next home toured.

Unfortunately, all were in the same budget range, not the range were Dream Homes exist, yet a respectable range where starter homes do exist.

 

Clearly the Expectations Talk was overdue, the difference between what they can afford versus what they dream of.

It is important to not spend beyond your means, I can respect that, yet to expect sellers to sell their dream home to you for a reduced price, is not very realistic.

Sometimes we do need to put our Dream Home on hold and invest in what you can afford, a Starter Home. 

A starter home that can be purchased for a modest price, fixed up over time, equity built up, then sold when it is worth more; the owner is in a better financial position and ready to upgrade to something closer to their Dream Home.

Time to stop looking for an $80,000 Dream Home, face reality, and invest in an $80,000 Starter Home.

 

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Ron Barnes 09/07/2018 06:12 AM
  2. Fred Griffin, on leave of absence from ActiveRain 09/07/2018 07:15 AM
  3. 1~Judi Barrett 09/09/2018 06:03 PM
  4. Ernie Steele 10/06/2018 02:47 AM
Topic:
Home Buying
Location:
Wisconsin Portage County

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Rainmaker
751,086
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

I remember our first home, I oved it, but it was not our dream home, it was small but affordable and it worked perfectly for us as our first home. Part of the buyer conversation is talking about expectations and giving guidance.

Sep 07, 2018 09:24 AM #21
Rainer
125,852
Susan Hale
Re/Max Realty of Defiance,Inc. - Defiance, OH
Re/Max Northwest Ohio Realtor

Bob, I really like your to the point message to lst Time Homebuyers in this blog!  It is hard in a want it buy it now credit world for young people today.  Many parents attending viewings don't help.  They point out all the negatives and forget that most home buyers including their kids can't afford to start out with the perfect house or it be anywhere near as nice a property as the parents own.  Starter houses aren't going to be perfect.  The days of low offers to see what the seller says is a big "NO" from the sellers today.  As you say, the sellers are accepting offers close to, full price or higher than list especially in low inventory areas.

Sometimes I think men can get away with to the point questions.  One of the male agents I worked brought his clients back to the office.  I heard him say to them "Are you going to buy this house or not?"  Then he waited to see what they would say.  The buyers hesitated being put on the spot but then started laughing and answered.   I don't know that I can be that blunt but it works for him.

Buyers can build on their dream  one house at a time until their fantasy becomes a reality!  I tell buyers that I've heard/noticed over the years that buyers typically move every 5-7 years.  It is a process to get to where you want to be.  However, I've noticed that Realtors tend to stay in their same homes numerous years me included :-)

Sep 07, 2018 09:26 AM #22
Rainmaker
746,054
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

I think Tracy Lee Parker said it best - "They want what they want and they want it NOW!" But you're right when you say you have to work your way up. Unfortunately, that mindset doesn't work for everybody and some young couples do manage to buy what they want. The thing is, when you have the best right from the beginning, where do you go from there?

Sep 07, 2018 10:42 AM #23
Rainmaker
1,067,144
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Wow - that's a great way of looking at it. I don't deal with many first-time homebuyers, but the idea of paying the same price but mentally adjusting what  you're buying would be helpful to any frustrated buyer.

Sep 07, 2018 02:16 PM #24
Rainmaker
1,220,411
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Maybe the "dream" must be adjusted some, Bob Crane ... the dream becoming homeownership, instead of a specific home with specific bells and whistles. 

From a very personal perspective, homeownership was certainly my wife's and my bottom line, dream, and goal.  Our first home was far ... FAR away from being any dream palace.  But it got us into the market.  40 years later we still look on that first purchase and home as the smartest monetary decision/investment we ever made.

Just another comment (sorry) ... but where are the Lenders in this conversation?  You either qualify to buy a certain price range of home or you don't.  That message must be clear ... and absorbed by the potential Buyers ...

I agree with those that say this is a fantastic post and message, Bob ... well done.  Congrats on the Feature!

Gene

Sep 07, 2018 02:35 PM #25
Rainmaker
786,079
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

In our markets we have many hidden gems that require some elbow grease.  There is a lot of room for improvement in equity when you can put a smart amount of work into a house.  

Sep 07, 2018 03:03 PM #26
Ambassador
2,812,755
Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

So agree Bob Crane ! Some buyers just don't understand the numbers or the want vs need game.  I typically say something like - it's important to get started with what you can afford - and work your way up to your dream home over the years like almost everyone else does too! They ususally get it.

Sep 07, 2018 04:12 PM #27
Ambassador
3,937,962
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Bob

There is such an important message, or set of messages here. Expectations of buyers, especially first timers and people relocating from less expensive areas are often not consistent with reality. And sometimes those WANTS take over when the focus should be on the NEEDS.

Jeff

Sep 07, 2018 06:22 PM #28
Rainer
389,343
Anna Hatridge
Goodson Realty - Farmington, MO
Missouri Realtor with Goodson Realty

If you are dreaming of being a home owner then these homes will certainly meet the criteria. The alternative is to save more money and have a bigger down payment on the home your have been dreaming of. 

Sep 07, 2018 06:27 PM #29
Rainmaker
449,204
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Congratulations on the Featured Post Bob Crane ... I have been there and done that so many times with buyers.  Sooner or later you have to have that heart-to-heart talk with them ... or after enough offers have been denied talk about the importance of not thinking too long ... start somewhere ... I love this meme that says it all:

Don't  Think too long

Sep 07, 2018 06:43 PM #30
Rainmaker
180,172
Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty

There are very low inventories of starter homes in good enough shape to pass FHA or VA in my area.  So...if you see one, get it!

Sep 07, 2018 07:22 PM #31
Rainmaker
156,220
John Henry
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

I think before much work is done there should be a realistic discussion of what budget will allow.  But as we have seen before, some people have a cushion that they will not disclose.  Only a real financial statement can reveal that.

Sep 08, 2018 04:30 AM #32
Rainer
40,310
susan paige
West Coast Florida Real Estate Group - Spring Hill, FL
Pet Friendly

Oh this is exactly what I am dealing with now. They have a budget, but want more . It isn't going to happen. I think my reality check finally settled into them and now we are looking at what's in their price range. May not be theperfect one but doable. They now get it.

Sep 08, 2018 09:44 AM #33
Rainmaker
2,100,524
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

I was one of those buyers....looking for something that others said didn't exist in today's market. I continued to believe that I would find "the one" and I eventually did. It took over a year of looking but we found it.

We were very very lucky that we were cash buyers with no need to sell a home first...there were multiple offers, some higher than ours. Cash is king!

Sep 08, 2018 09:59 AM #34
Rainmaker
2,958,601
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

I have this same problem with first time buyers. I find myself sitting them and going over these same things. It usually takes seeing a couple of homes before reality sets in, but having the talk BEFORE they see any homes, can stop the feelings of dream home being in their Price range and forming a new perception of what their dream should be

Sep 08, 2018 01:56 PM #35
Rainmaker
501,952
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

So true!  It's exciting, romantic, to think about that first home--esp if you watch a lot of HGTV!  Setting the expectations is important--most buyers in this market must understand to get what they want, they may to go up in price--.  And every house is going to have some negative.

Sep 09, 2018 11:42 AM #36
Ambassador
2,287,195
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

^^ We get a  lot of "dream" shoppers that watch too much HGTV and are not ready to buy what they can afford.

Sep 09, 2018 06:02 PM #37
Rainer
35,813
Cheryl Hale
Envoy Mortgage. LTD - Plymouth, MI
Mortgage Loan Originator NMLS#276668

It's tough out there for first time homebuyers. I work with FTHB a lot and fortunately find they do have a reasonable budget in mind. However that budget does not get them in the area they want.  This is where my realtor partners come in and suggest other areas to look that they might not have thought of. The expectations talk is so important.

Sep 10, 2018 06:47 AM #38
Rainmaker
972,158
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent advice.  A buyer's mindset is oftentimes mismatched with their budget.  Having "the talk" can help guide them into accepting what they can purchase for what price.  

Sep 10, 2018 02:07 PM #39
Rainmaker
295,806
Dave Rosenmarkle
Highland Realty - Arlington, VA
32 years of providing fully satisfying service!

Well said; maybe there should be a license to be earned before a purchaser can start looking to buy a home! 

Sep 10, 2018 04:28 PM #40
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