How Do I Know if a House Is Really a Good Buy?

People sometimes assume that because I've spent so many years evaluating properties, I approach buying a home primarily as a financial exercise. I certainly pay attention to the numbers, and I take the investment side of homeownership very seriously. But there's something I consider even more important when helping someone find a place to live.

How does the house make you feel?

I've walked through homes with clients who were perfectly polite, interested, and attentive. They liked the kitchen, appreciated the backyard, and agreed that the floor plan made sense. Everything was fine, but nothing particularly exciting was happening.

Then we'd walk into another house, and I could almost see the moment it happened. Their expressions changed. Their voices changed. They lingered in certain rooms, looked out the windows a little longer, and started talking about where their furniture might go or how they'd use the backyard.

They weren't evaluating a collection of features anymore. They were imagining their lives there.

That's the moment I'm looking for.

A house can satisfy every requirement on a list and still leave you cold. Another may have a feature you hadn't considered, or a layout different from what you originally imagined, and somehow it just feels right.

The house speaks to you.

Of course, that doesn't mean I ignore the practical considerations. Quite the opposite. The reason my clients can give that feeling the attention it deserves is that I've already spent considerable time evaluating the practical side of the properties we're seeing.

When I begin working with buyers, I want to understand much more than how many bedrooms and bathrooms they need or the maximum price they're willing to pay.

I want to know how they live, what they enjoy, what frustrates them about their current home, what they hope will be different in the next one, and what matters most to them. Do they entertain? Garden? Need room for hobbies, vehicles, or visiting family? Prefer privacy or a neighborhood where everyone knows everyone? Is a single-story home important now, or likely to become important later?

The answers help me understand not only what they're asking for, but what they're actually trying to accomplish.

Then I go to work.

I study the available properties, their neighborhoods, locations, lot configurations, floor plans, condition, construction, pricing, and potential. I consider what can be improved, what would be difficult or expensive to change, and what might affect the property's desirability when my clients eventually become sellers.

And I preview the properties that appear to fit, along with some that might offer possibilities my clients haven't considered.

That last part is important. A listing can look wonderful online and disappoint terribly in person. Another might have uninspiring photographs but turn out to be a terrific property. I don't want my clients spending their weekends discovering those differences one disappointing house at a time.

My objective is to identify the strongest candidates before we start touring together.

By the time I put together a showing list, I've usually considered many more properties than we'll actually see. The homes on that list aren't simply the ones that match a search filter. They're the ones I believe offer the best combination of lifestyle, quality, suitability, and value for those particular buyers.

One of my favorite expressions is, “You don't know what you don't know.”

It's especially true in real estate.

Buyers often begin with a particular neighborhood, house style, or set of features in mind. Those preferences may be perfectly reasonable, but they're based on what the buyers already know. There may be another neighborhood or type of property that offers everything they're looking for—and perhaps a few advantages they haven't even thought about.

That's why I almost always introduce at least one property or area that wasn't part of the original plan.

I'm not trying to talk someone out of what they want. I'm trying to make sure they understand all the ways they might get it.

A memorable example involved a woman who called me after she'd spent more than nine months unsuccessfully searching for a home in East Sacramento. She'd been looking in a highly desirable area with beautiful older homes, mature trees, and distinctive neighborhoods, but she hadn't found the right property.

After learning more about what she wanted, I suggested something she hadn't been considering: Arden Park.

Arden Park offered many of the qualities she loved about East Sacramento, including established neighborhoods, mature trees, attractive homes, and a wonderful residential atmosphere. But it also offered opportunities for larger lots, different floor plans, and properties that might better suit her lifestyle.

I identified six homes I thought were worth seeing. Instead of continuing the same unsuccessful search in the same places, we explored an area that better matched what she was actually looking for.

And she found her home.

The property attracted serious competition, including offers from contractors that were higher than ours. But purchasing real estate isn't always about offering the highest price. Terms, preparation, communication, relationships, and understanding what matters to the seller can make a tremendous difference.

We put together an offer that won.

She later told me that when we'd first spoken, she'd thought my confidence sounded a little arrogant. After seeing how the search and negotiation unfolded, she understood what I meant.

I still smile when I think about that.

The important part of the story isn't that I persuaded her to change neighborhoods. It's that she discovered a home she loved in a place she hadn't known to consider.

My job isn't simply to find the house you asked me to find. It's to help you discover the home you didn't know you were looking for.

There's a method to how I arrange property showings.

Naturally, geography plays a part. It doesn't make sense to drive back and forth across town unnecessarily. But whenever the route allows it, I try to arrange our tour so that we finish with the property—or perhaps the two properties—I believe are the strongest candidates.

Why?

Because I've already evaluated the available choices, and I generally have a pretty good idea which homes are likely to appeal most to my clients.

As we tour, I watch their reactions and listen carefully to what they say. I'm interested in their responses to the homes, not just their answers to my questions. Sometimes a feature they thought was essential turns out not to matter much. Other times, something they hadn't mentioned becomes unexpectedly important.

By the end of the tour, I've usually learned even more about what makes a home feel right to them.

And here's something that might surprise you: I don't tell my clients which property is my favorite.

I may explain a home's advantages, point out concerns, answer questions, and compare it with others. But I don't want my personal preference to influence the emotional connection they're developing with a property.

I want them to reach that conclusion themselves.

Interestingly, they frequently choose the same home I thought they'd like best. I'm rarely surprised.

I generally don't reveal which property was my favorite until we're already in escrow. By then, they've made their own decision, and we can have a little fun comparing notes.

Sooner or later, almost every buyer asks about a property that didn't make my showing list.

Maybe they saw it on Zillow, loved the photographs, or noticed that it seemed like a bargain. They'll ask why we're not going to see it.

I'm ready for that question because I've already evaluated the property. I can explain what concerns me and why I believe the other choices are better.

Perhaps it backs to a busy road, sits near high-voltage transmission lines, has an awkward floor plan, or occupies a lot that doesn't work well for their needs. Maybe the house is severely overpriced, or the improvements needed to make it desirable would cost more than the opportunity justifies.

Sometimes the photographs simply make the property look better than it is.

But if my clients really want to see it, of course we'll go.

In fact, those visits can be some of the most valuable parts of the entire search.

Remember, I've already screened out many of the properties I don't think measure up. If my clients only see the best of the available choices, they may not appreciate how different the alternatives can be.

Seeing one of those rejected properties gives them a basis for comparison. They experience the drawbacks firsthand and begin to understand why I made the recommendations I did.

Occasionally, one particular house becomes so memorable that we use its name as shorthand for the rest of the search. If a buyer insisted on seeing a disappointing property on Foxwood, for example, a later listing with similar problems might prompt, “That's another Foxwood.”

The name is different for every buyer because it comes from a property we've actually experienced together.

And there's a reason that works so well. They're not just remembering what I told them. They're remembering what they saw and felt for themselves.

They're learning to recognize the difference between an attractive listing and a genuinely good property.

There's an important distinction between a home that looks beautiful and one that's fundamentally desirable.

Fresh paint, attractive flooring, a remodeled kitchen, and beautiful furnishings can make a powerful first impression. But those are often among the easiest things to change.

The harder questions concern the property's underlying characteristics.

Is the location desirable? Is the lot useful and appropriately configured? Does the floor plan work? Is there good natural light? Are the rooms arranged in a practical way? Is the construction sound? Are there expensive limitations that can't reasonably be corrected?

I've seen beautifully remodeled houses with problems that would make me reluctant to recommend them. I've also seen tired, dated homes with terrific fundamentals and enormous potential.

One of the most valuable things experience teaches you is how to distinguish a cosmetic problem from a fundamental one.

Ugly carpeting? We can change that. Outdated cabinets? Probably fixable. Neglected landscaping? Usually an opportunity.

A house backing to a six-lane road? That's a different conversation.

And sometimes the problem isn't impossible to fix, just unusually complicated or expensive. Moving walls, relocating plumbing, correcting awkward floor elevations, or trying to make a fundamentally poor layout function properly can consume enormous amounts of money.

I've found that the longer I have to think about how to solve a property's problems, the more likely the solution is to be complicated, expensive, or risky.

That doesn't automatically make the property a bad purchase. At the right price, with the right buyer and a realistic improvement plan, some difficult properties can still offer opportunities. But the potential has to justify the cost, effort, and risk.

And even a wonderful opportunity isn't wonderful for a buyer who doesn't have the resources or desire to pursue it.

That's why I consider the property and the buyer together. A house can be an excellent investment for one person and a terrible choice for another.

There's an interesting consequence of choosing properties with strong locations, desirable features, appealing layouts, and good long-term potential.

Other buyers tend to recognize those qualities, too.

When my clients fall in love with one of the homes I've selected, there's a good chance other people are having similar reactions. That can mean competition and multiple offers.

It doesn't surprise me, and it doesn't necessarily mean we should walk away.

It means we need to be prepared.

I study the property's value, the market, the seller's circumstances when available, and the likely competition. I consider how the offer should be structured, what terms may matter to the seller, and how we can make our proposal as attractive as possible without unnecessarily exposing my clients to risk.

Sometimes the strongest offer isn't the highest offer. Sometimes a seemingly small detail makes the difference.

As I often tell clients, negotiating starts a long, long time before a contract is signed. The research, education, property selection, and preparation we've already done become part of our negotiating advantage.

And while I want my clients to purchase a home they love, I also want them to understand the market they're buying into.

A property is worth what the market will pay for it.

That doesn't mean we should blindly chase every competing offer. It means we need to understand what buyers are actually willing to pay for that particular property, under the conditions that exist at the time, and make intelligent decisions accordingly.

A home that's highly desirable to my clients may be equally desirable to others. That's part of what makes it valuable.

People often use the terms good buy and bargain as though they mean the same thing.

They don't.

A property can be inexpensive because it has serious limitations that will always affect its desirability. Another can sell at a premium because it offers a combination of location, quality, layout, lifestyle, and scarcity that's difficult to duplicate.

Paying less doesn't automatically mean you're getting more.

When I evaluate a home, I consider what my clients are receiving for their money, what it would cost to reproduce or improve the property's features, how it compares with available alternatives, and how future buyers are likely to respond to it.

But I also consider something that doesn't fit neatly into a spreadsheet: What will living there mean to my clients?

A home isn't simply an asset on a balance sheet. It's where people spend their lives, raise families, entertain friends, pursue hobbies, relax, and create memories.

If we've identified a financially sound, technically desirable property that genuinely fits the way my clients want to live, that's a very strong starting point.

And if the house speaks to them, we're probably getting close.