Louise and her husband had taken the plunge just a year ago. They’d finally bought a home after renting for their first few years. Louise had badly wanted to get into a home. Their first child was already two years old and a second child was on the way. Louise’s husband, though, had wanted to wait another year or two for several reasons. One reason was to save more money for a down payment. Another was that his work might be moving. And another was that interest rates were high, meaning that they couldn’t afford the payment on the homes they’d looked at and liked. Louise was now thinking that her husband had been right. Her husband had just gotten notice that his work was moving to another town. And the past year in the home had made their budget extremely tight.
Home
Choosing a home means a lot to a family. The home’s size, quality, location, neighborhood, safety, security, amenities, cost, and comfort can all make big differences to your family. Choose well, and you can set your family up for years of safe, secure, and comfortable living. Choose poorly, and you can set your family’s finances back for years, while having to start over. But choosing a home is not as if you get to just go and pick out your favorite. Homes are expensive. They’re also difficult to find, buy, and sell, with high transaction costs to buying and selling. You also have right seasons in which to buy a home and wrong seasons. Timing, in other words, can be everything with home transitions. There’s simply a lot to choosing the right home at the right time, while your family has a lot riding on your choice. Be wise about homes. Your family depends on it.
Timing
Your timing for buying a family home matters because of the transaction costs. Home sales typically involve substantial real-estate-agent fees, transfer taxes, inspection costs, closing costs, moving costs, and financing costs. If your family is moving into a new home within three to five years after moving into your present one, you are probably losing money. If the housing market has turned in the meantime, you may not even be able to sell your home if you are now underwater on the home, meaning that your sale proceeds would not pay off the mortgage. You’d generally be much better off financially not to move again for ten years or more, while your present home appreciates and you amortize the transaction costs. Moving in and out of rental housing is generally far easier, far less risky, and far less expensive. Thus, don’t plan a home purchase until you can afford to do so, you believe that you will not need to sell the home for several years at least, and the home you’ve found is the right one for your family for at least those several years or, better yet, much longer.
Financing
Most families buying a home borrow a significant portion of the home’s cost. The vast percentage of first-time home buyers do so. Homes are expensive, typically costing several times a family’s annual income. For a family to pay cash for a home might require at least a decade of saving. On the other hand, financing the majority of a home’s cost can mean paying two or three times the home’s cost over the course of the mortgage loan. If finances were the only consideration, a family might wait as long as possible to buy, save as much as possible with which to buy, and borrow as little as possible to buy. But finances aren’t the only consideration. Rental housing often isn’t as attractive, private, or personal as an owned home. And renting doesn’t build home equity or gain the advantage of home appreciation. So again, buy a home for your family only when you believe you are not moving for at least several years, your budget can afford the home leaving enough room for reasonable financial security, and you’ve found a home suitable for your family. Don’t get in over your head financially. If you must buy but can’t afford all you need or want, consider buying a home to which you can add on and that you can improve when you have the finances to do so.
Location
The location of your family home can have a lot to do with the quality of your family life. Urban, suburban, and rural life all differ along that spectrum that describes them, from the dense society of the city to the sprawl of suburbia to the wilderness of rural life. Each setting gives your family different challenges and opportunities. The quality of the school system and how close your home is to school affects your children. The quality of services and supplies like medical care and groceries, and how close your home is to those services, affects your family, too. And how long a commute is to work influences how involved the commuter is to the local community and determines how much time the commuter has at home each workweek. Location can also determine how close your family is to grandparents or other relatives, the cost of housing, cost of living, weather, seasons, culture, recreation, job sectors, and even economy and job security. Choose your family’s location with thought. Begin by determining priorities. You may choose a great location, but if having your parents nearby to help raise your children turns out to be your highest priority, you may find yourself moving.
Neighborhood
The city or locale in which your family settles is important to a good family life. But the neighborhood also matters. In a city especially, a lot can change between a few blocks, having to do with the physical safety of your family members, security of your property, noise from traffic or industry, corruption from clubs, and stability of property values. In suburbia’s sprawl, where everything can look the same, some neighborhoods can still have more children and significantly different or better schools. And rural locations can have wide differences in land uses. Your family might prefer not to be downwind of the town dump or a hog farm. Choose a good locale, but then choose a good neighborhood in that locale. Take a good look at your immediate neighbors and their land uses, and quietly ask around about the neighborhood’s reputation.
Size
The size of the home you choose for your family can also affect the quality of your family life. Your challenge in choosing your home’s size may be that families tend to first grow in numbers and later shrink in those numbers, requiring or recommending that your home’s size grow and shrink along with those numbers. Families often begin in so-called starter homes, in part because of the high cost of housing and a family’s generally lower income and savings earlier in life but also in part because the family may be smaller. Yet as children come along, a family can grow out of its starter home. When the children leave the home, the empty nesters they leave behind often want to downsize to reduce housing cost and maintenance. Each transition up and down in size may be exciting but has high transaction and disruption costs. Don’t buy the home you need today. Buy the home you’ll need in five to ten years, which generally means buying more than you need earlier in life and less than you need later in life. That way, you may end up buying only one or two homes over the course of your family’s life, if job changes don’t force more moves. Keeping the number of homes you buy and sell to a reasonable minimum may save you substantial transaction and financing costs, making a big difference in your finances later in life.
Safety
Your home’s safety is a significant factor for your family. Building codes and rental-permit inspections generally ensure the basic safety of rental housing. Have a skilled contractor or professional home inspector make a thorough inspection of any home you’re considering purchasing, not just for defects you’d have to repair but also for safety. Steps without handrails, decks or platforms without railings, old lead paint and lead pipes, asbestos in insulation and other materials, bathtubs and showers without slip-resistant footing, furnaces with exhaust leaks and cracks, missing or non-working smoke alarms, and other fall hazards, trip hazards, and materials hazards can make a beautiful home dangerous or even deadly. Ensure that the area immediately outside your home is also reasonably safe, having to do with vehicle traffic, in-ground pools, dangerous equipment, and other hazards. Your family needs a safe home.
Security
Your family also needs a secure home. Home invasions can be a significant risk in any neighborhood, whether urban, suburban, or rural. Each setting has its own burglary risk. Urban homes generally need secure door and window locks, if not also security alarm systems and even surveillance cameras at the door and around the home. Suburban homes, too, can require those security features, even when in lower-crime neighborhoods occasionally targeted by roaming thieves. Suburban theft is especially a risk when your family is obviously away from the home for a day or more. Your home should enable you to secure it from prying thieves. And some neighborhoods just are not sufficiently safe for families. Neighborhood crime statistics are generally available showing the frequency, location, and types of crimes. Ask around, but also investigate those statistics if you have any question over the security of the area in which you are preparing to buy a home.
Amenities
Cost, suitability, location, neighborhood, safety, and security are the primary factors for making a good choice of your family’s home. But the home’s amenities can also matter a lot. Some amenities your family may be able to add or improve before you occupy the home or over the years, as you can afford the additions and improvements. With those improvements, a home’s amenities can change a lot in the span of five, ten, or twenty years of residing there. In the course of maintenance over the span of a decade or two, some families end up effectively renovating their entire home, without necessarily having planned to do so. When buying a home, though, the kitchen and bathrooms are a first place to look for appropriate amenities. Kitchen appliances you can and eventually will replace and improve. But kitchen size, counter space, cabinetry, and window for views and natural lighting aren’t so easy or inexpensive to improve. The number and location of bathrooms, and whether they are of decent size and have a shower or tub, can also be important. Other important or helpful features can include the size and location of bedrooms, especially the master bedroom, open floor plan design, air conditioning, gas fireplace, sun room, natural lighting, outdoor views, yard size, privacy relative to neighbors, and landscaping and fencing. Your spouse and other family members will know what they want and like. Keep their interests in mind.
Maintenance
The condition of the home you choose is also important. If you remain in the home long term, you may replace most or all of the home’s systems. But you would likely prefer not to have to replace systems when they fail soon after you occupy the home. Contractor inspection of the heating, ventilation, and air conditioning system, for instance, is critical, to be sure that the home you choose has a safe and functioning system. HVAC replacement is a big-ticket item. Plumbing and electrical systems can also age poorly, as system materials and designs improve. An antiquated or patched-together electrical system can be dangerous. Poor plumbing can be a nuisance. Read your inspection report carefully for defects in these systems. Their replacement is expensive. The roof on your home also has a useful life. Know how many years it has left before you must replace that big-ticket item. Windows, siding, flooring, and paint can also age poorly. Know the candidate home’s condition before you buy. Home maintenance is critical to a safe, secure, and comfortable family life.
Expectations
While every one of the above considerations can be important, even critical, to a good family life, the most important factor may be how you and your spouse arrange, decorate, and appoint the home. The home you can afford may be too small, not in the best location or neighborhood, lacking in amenities, and in need of maintenance. Yet you and your spouse may still be able to make it a warm, comfortable, encouraging, and memorable home. Elderly couples looking back over their life together sometimes find that their greatest memories are of their years in their worst housing. A fine home may be the American dream, but a good family life need not be all about the housing. Poor housing forces a couple to focus on one another, their time together, and the little things they can still do to make their living space special to one another. The tiny gift that you buy for your spouse, who then puts it on the ledge of your small apartment’s lone window, may be the precious thing that you remember of those years in poor housing, more special in its own way than the palace into which your family later moved. Temper housing expectations. Family life should not be all about the housing but instead more about the loving relationships that housing supports.
Reflection
Is the home that your family is currently in suitable for a good family life on all or most of the measures discussed above? How would you rate your current home overall, on a scale of one to ten, on the above measures? Can you improve your current home to make it more suitable? How are your family’s housing needs likely to change in the next five years? Ten years? Twenty years? Do you anticipate moving because of your housing needs at any time in the near or distant future? Can you avoid an expensive and disruptive move by making some improvement or adjustment in your current housing? If you must move, will your next move be one that can provide for your family’s housing needs longer term? Is your current home reasonably secure? Do you need to do something to make it more secure? Is your current home reasonably safe? Do you need to do something to make it safer? If you are unable to afford a move, and your housing isn’t particularly convenient, comfortable, or desirable, can you at least appoint or decorate it in small ways to make it personal and memorable?
Key Points
The home you choose can be a big factor in the quality of family life.
Your family has right and wrong times to commit to buying a home.
Examine financing costs and affordability closely when buying a home.
Choose your home’s location considering the full range of factors.
Your home’s neighborhood can also affect schools and other factors.
The size of the home your family needs and wants varies over time.
A contractor’s inspection can ensure that your family’s home is safe.
Neighborhood and home security are essential to a good family life.
Choose a home with suitable amenities or the ability to add amenities.
A contractor’s inspection should inform you of maintenance needs.
Your appointment of your family’s home can transform it.