Question: What factors motivate buyers to buy a home?
At the end of the day it all comes down to price, location and condition. I learned this lesson my first week as a Realtor and it still holds true today. In 2012, the number one factor that motivated a buyer to buy was — drum roll please — PRICE. A close second was location followed by condition.
Now if we were to break buyers into sub-categories we would get a slightly different picture. For example, first-time home buyers ranked price their absolute number one motivator. This makes sense because most first time home buyers are watching every penny and are very “payment focused.” This group also has a lot of input from their parents, other family and friends. Most family members have the buyer’s best interest at heart and are just trying to protect them from what they themselves may have seen happen to their investments during the down market. This is understandable considering the market that we just went through.
For the repeat buyer, location was the most important factor when deciding on a home. Not a surprise to me. Let me explain.
I will use myself as an example. My wife, Leah, and I lived in our first home in Prairie Village for nine years. Of course our original plan was to stay for no more than five years, but who was counting? During that time, we discovered everything that we loved about our home. And everything that we did not love. We pretty much remodeled that home from top to bottom, and then sold it in the down market. You would think that we would know better, right?
Well, we did know better. We knew that the location that we had been seeking was now available and we jumped on it. And why was it so important to us? Because we had learned that you can improve a home all you want, but you cannot change the location. And at the end of the day, being able to walk to Prairie Elementary and to the Village Shops was just what the doctor ordered. We were also looking for a neighborhood that was at the beginning of its cycle. In layman’s terms that means a neighborhood with lots of kids. We did not have that in our old neighborhood and it was becoming more important as our boys were getting older.
I guess your first home is kind of like one of your first relationships: You enjoy it for the time that you have together and it teaches you what you don’t want in the future.
So why is condition in the number three spot? I think it is because a homeowner can improve the condition of their home. They can make it how they want it and do the work when they want. I find that the easier or more realistic it is to change something about a home, the less it will impact the value. Conversely, things that cannot be changed about a home (like location) have a huge impact on a home’s value. Now, I am not saying that a major kitchen remodel will not improve a home’s resale value. I AM saying that if you did the same kitchen remodel in two different homes, and one home was in a stronger neighborhood, the home in the stronger neighborhood would receive a better return on its investment.
I will sum this column up with three timeless words: location, location, location.