Home buyers must figure out budget for next home at start of search
When you make the decision to purchase a home, whether it’s a first-time purchase, a trade-up or a downsizing, how do you figure out your budget and how to find a home that fits within it?
That was the situation facing Valerie and David Sorrells, who wanted to buy a larger home for their growing family. The couple also wanted to be closer to their jobs. Valerie works in the city of Rochester, while David travels quite a bit between Strong Memorial and Rochester General hospitals.
They decided to move from their three-bedroom home in Macedon and buy a four-bedroom house in Brighton or Pittsford.
The Sorrells enlisted the help of Nothnagle agent Mike Drouin as they embarked on their search.
First, they had to prepare a budget for what they were willing to spend. With the shaky economy, it was important for the Sorrells to have a mortgage payment they could afford on one salary. And they had to prepare for a higher cost of living.
Next, they had to figure out how high they could go based on the down payment they expected to have and closing costs and other fees.
Buyers also have to figure out utility costs, especially when moving to a larger home. If downsizing, there could be condominium fees.
“The cost of housing is much cheaper in Macedon,” said Valerie Sorrells, 36. The couple paid $149,000 for their three-bedroom, 2 ½-bath home in 2003.
In June, the Sorrells listed their 1,800-square-foot home built in 2000 for $169,000. It took three months to sell their house for $159,000.
When they received the offer, they initially started seriously looking at homes in the $200,000 range.
They had Nothnagle agent Mike Drouin help them arrange for pre-approval for a mortgage on any new home they chose when they contracted with him to sell their home.
To figure out how much they could afford, they worked out their monthly expenses on a spreadsheet.
The couple has two young children, so selling their home and looking for a new one while working full-time wasn’t easy.
“It was stressful,” Valerie Sorrells said. They initially wanted to move to Brighton but found that it was difficult to get a home in good condition with four bedrooms and a two-car garage in their price range, so they broadened their search to Pittsford.
Ultimately, they found a 2,000-square-foot home built in 1960 on a tree-lined lot in the village of Pittsford. It had the four bedrooms and two-car garage on their must-have list.
They paid $239,000 for the home, but they had to swap a 15-year mortgage plan for a 30-year mortgage to keep the payments within their budget.
The family had a good chunk of equity from their home in Macedon to put down on their new home. In a few years, they hope to refinance to move back to the 15-year plan.
Sticking to her list of must-haves for her new home helped with the search process, Valerie Sorrells said. It also helped to look at other options when the first choice failed.
