That is the question. Not only do I hear this often in my role as Realtor, but it’s the same question my husband and I kick around. The answer, as it so often tends to be, is it depends.
Let’s try a case study.
Case Study #1: Dreaming of More Space
Meet the Eastwoods. They want to live out their wildest cowboy dreams in wide open spaces. With three kids, two steady incomes, and a goldendoodle, they are ready to shake off the dust of suburbia. Mr. Eastwood has arranged to work remotely. Mrs. Eastwood will homeschool the children and start a large garden. There may be animals and farm equipment in the future.
- Location: Doesn’t much matter. As long as it has 5+ acres and reliable internet, the Eastwoods will be interested.
- Specs: Number of rooms is important. With all five family members working and living out of this home, they want at least four bedrooms. A garage and outbuilding are wishlist items.
- Price: Budget is specific. They’ll be reducing their household income dramatically to make this move.
Top Priority: Price
As their Realtor, I begin the search.
For the Eastwoods, the list price and monthly mortgage are the most important considerations. Family finances will be reduced and hard to predict for the foreseeable future. I set up two searches:
- The “Let’s Renovate” Search:
Under $200,000. Large search radius- anywhere in my region. 5+ acres and no specified number of bedrooms.
- The “Move In Ready” Search:
Under $400,000. Large search radius. 5+ acres. At least 4 bedrooms, 2 bathrooms, a garage, and 2000+ square feet.
Consider the Options
The Eastwoods make a great case study for the question, “Should I build, buy, or renovate?” The first thing I do as a Realtor is listen. By having a conversation with the family, I help suss out their greatest needs and highest priority.
- Building is not an option. Ain’t nobody got time for that, if you are an Eastwood.
- Buying a fixer is a possibility. For this option to work, the list price needs to be low enough to accommodate renovations. And although the cash down in this scenario is less, the renovations will most likely require significant cash.
- Buying a ready-to-go house is their ideal situation. The remote office and homeschool classroom can get set up immediately. They will likely spend the most in this scenario, but it will be mortgaged out. The cash needed is relatively low.
Then, I put this information into the context of the current local market. I determine that running two searches simultaneously is the best approach and we adjust our parameters to align with the current supply of homes.
The first thing I do as a Realtor is listen. By having a conversation with the family, I help suss out their greatest needs and highest priority.
In an upcoming post, we’ll look more closely at each of these three options. Building a house involves time, cash reserves, and some fairly specific and sequential steps. Renovating can look many different ways. It takes time, but the timeline is usually flexible. It can be financed, but can be most easily accomplished with cash.
Let’s explore this and more next time!
So, if you turn yourself into a case study, how do you answer the question? How do you rank your own priorities? How do time, money, and location guide your decision?
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