Is planning ahead a good idea when buying your first home?
Of course it is. Planning for the long term is just as much a part of a first-time buyer's homework as finding the right loan and picking the right agent. This is serious business, folks, and I expect you to act accordingly.
You bet I do. You bet it is.
But while we're all prostrate before the altar of terribly grown-up responsibility, I'm going to suggest that you adopt a seemingly irresponsible strategy for buying your first home: think short-term.
Yes, I'm going to suggest that you not scour the countryside to find the home you "know" you'll be happy with for the next ten years if not the rest of your life and beyond. Instead, think in terms of two homes over the next five-to-ten years.
Why?
First of all, you first-time buyers usually have plenty of upside. Your earning power often grows substantially over the short term and soon you may be able and willing to afford a better home in a better area with better schools and more amenities.
Second, your needs and expectations will almost certainly change over the short term. What worked fine in Year One as a first-time purchase may not be working nearly as well in Year Five. I see this often with my own clients. People outgrow their first home for a variety of good reasons. Drawbacks like traffic or airport noise, minimal or no yard, little shopping and a very ordinary neighborhood in a not-so-great location—all hallmarks of the "starter home"—may in the early days seem like fair trade-offs for owning your own home. And they are. But maybe not forever.
Even a seemingly indisputable benefit like living right in the middle of all the action—the very reason you bought your first home in the first place—may wear thin if and when you get tired of being in the middle of all the action. Yes, even you may someday yearn for the tranquility of the 'burbs, a gas grille in your back yard and a station wagon with fake wood trim in your driveway, and sooner than you think. How old are you? Thirty-two? Trust me, in ten years you'll look like either Ward or June Cleaver and not even realize it. Respectability creeps up on the best of us.
And third, no one knows what they’ll be doing in ten years, which means that shoe-horning a ten-year projection into your first-time home buying calculations may make a very complicated decision even more so. It's just as paralyzing as trying to calculate/guess which house, neighborhood and city will be the "best investment" over the next ten years, an inner battle I've seen stop many a first-time home buyer dead in his tracks.
So what does all this mean in real time? Say you're a young professional couple, no kids, far more interested in checking out the local clubs and restaurants than in knitting your first baby bonnet. Should you think about schools? Sure, if you don't mind paying at least 20 percent more for your home than you need to, or even pricing yourself out of the market—if what you're looking for even exists. But don't schools keep up property values? Name-brand schools certainly do raise prices, but at least in this area, the idea that they bullet-proof property values is vastly over-rated. Yes, neighborhoods with good schools have weathered the current downturn far better than areas with not-so-good schools, but the exact opposite happened back in 2001 when dot-com went bust.
And schools aren't the only thing professionals of all ages look for when buying a home. A walkable neighborhood, convenient to the good life, will always have a market. Why complicate things—and pay more for schools you won't need for years—if in five years you're ready to move to another area or kind of neighborhood just as Junior is ready for his first day of school?
So do I think an agent should never encourage his buyers to think ahead? Not at all. What I do think is that an agent should respect whatever phase of life his buyers are in, whether they're buying their first home or what may be their last. The agent who doesn't respect those phases as necessary and legitimate, who nods his head when his buyers tell him what they want and then shows them what he thinks they need, who fails to recognize or chooses to ignore the "I am so not feelin' it" look on his buyers' faces, is an agent who's either continually battling his clients or wondering why his phone doesn't ring.