What You Should and Shouldn't Compromise On When It Comes To Real Estate.

First-time homebuyers enter a complicated world when it comes to real estate. Everyone has their dream home but between them and those floor-to-ceiling windows overlooking the ocean are property taxes, other prospective buyers, and costly mistakes along the way.

Home values themselves are something that can vastly change when it comes to the exact same home. Buyers have to contend with market conditions, mortgage companies, and the allure of future developments.

A dream home isn't where people start and this is where you need to think about the compromises you're willing to make and which things are worth it. Before you spend money you don't have for square feet you don't really need, let's take a look at the things you should and shouldn't compromise on.

Don't compromise on the number of bedrooms.

When a real estate agent wants to make you understand what compromise in real estate looks like, they may show you a house that's within your purchase price, gorgeous, but is missing something key. What that real estate agent didn't count on is you falling in love with that home.

If you have kids, not having enough space for all of them to have their own privacy is going to put a strain on everyone in the new house. If your agent showed you a home with three bedrooms to set your expectations right, it's to get you to really take a look at the budget and your possible future home.

Buying something that's missing a critical room is just asking to be unhappy for a long time.

Compromise on cosmetic fixes.

Imagine now that your agent takes you to a home that might not have the crown moulding that you want or the right paint job. This is where you need to picture what you can realistically change in the home with some elbow grease.

The seller's agent will have an easy time finding potential buyers for a property that has all the little finishes, including a beautiful garden or a beautiful little swing in the backyard.

The truth is that it could be in your best interest to take on a home that doesn't have all the little things. That way, you can add the cosmetic details that you want. You might be thinking about the time it takes and the additional costs but they can be spread out over time. When you buy a home that's in a great location, at a good price, but without the right tiling for the bathroom - you get a chance to customize your home as needed.

The money you save on the cosmetic aspects is money you can invest in making the home your own. After all, if it's your mortgage loan, you should be living in your house, not now that the seller left behind.

Don't compromise on critical systems.

Must-haves change from buyer to buyer but a functional kitchen, bathroom, and HVAC system in addition to the right number of bedrooms should be your minimum. Remember, you don't want to regret your down payment and the monthly payment toward your mortgage.

Even if you fancy yourself a handyman and think you will save a lot on your mortgage payment by doing everything yourself, you need to make sure that the home is habitable.

Good electrical wiring throughout the house and good waterproofing around the electrical panel can prevent disasters like electrical fires. No one wants to pay closing costs, an appraisal fee, and more just to see it all go in literal flames.

Of course, there are less serious versions of this. If a real estate agent tells you the previous owners had a vibrant personality, run. There's a toilet in the middle of a common area separated off only by a half-wall. You're not being picky if you don't want to come across someone doing their business by making a wrong turn in a house. Yes, that house is real, it's in the US and it's selling for 460K USD but make no mistake, we're not immune from that in Canada.

Compromise on space.

The home buying process is tough, and both the buyer and the real estate professional tagging along can feel it.

House hunting escalates into a bidding war more often than either party is reasonably ready for but there are ways to make sure you don't send your budget to an early grave while you dine on dollar-store ramen for a few years to afford your mortgage payments.

More space, that's what many buyers are all looking for but when you're really attached to particular area there's a good chance many other buyers are also looking for that space. The popularity of a certain location can make the price of your new home skyrocket.

At this point, you really have to think about whether you want to stay firm and look for a gem a little longer or shrink the vision of your dream home just a little so that the purchase price doesn't break the bank.

The right property can be a little smaller than what you anticipated and that's okay. As long as there's enough space for the whole family and no one starts to hate each other because of how much they're on top of each other, the location of the property can more than make up for it.

The cost of a home purchase has many variables, that's why you pay a mortgage application fee and need to get pre-approved by a mortgage lender for your offers to be taken seriously. The home search will involve trading square footage for amenities like a good school district.

More space doesn't mean much if you and your family spend a lot of time out of the home, reducing commuting or transport costs can be more than worth it in the end.

Should you compromise on a home inspection?

The market being the way it is, some buyers make the decision to send offers that waive their right to have a home inspection done.

It can be something you can do if there are no other good homes within the range of good schools and that shortens your long commute. However, you need to make a rational decision about what you can spend in order to deal with the repairs. A chimney inspection might seem superfluous but could be critical before it's fit for use.

Homes that have structural problems can suck up valuable time and money and rash decisions about not doing a home inspection can turn your new home into a money pit. A chimney full of soot or structurally unsound will cost more than a measly thousand dollars if you try using it.

What if you're on the market for a fixer-upper?

Realistically, there are many different levels to what a fixer-upper is. A ramshackle collection of four walls and a roof in an unkempt literal urban jungle is a fixer-upper if your ambitions are big enough, but so is a home with an unfinished basement and outdated appliances.

The only part, really, that you need to take care of is whether your family can live in the home while the renovation work is happening. If not, then it's time to budget out extended motel stays as repairs continue.

At the end of the day, whether it's a dream home or just a stepping stone, there are things every buyer needs to think through and balance before making one of the biggest financial decisions of their lives. Just don't buy a home for the price, especially if a countertop is held up by a banister and a giant window faces the highway - there has to be better out there.

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