Find Your Dream Home: A How-To Guide

The phrase “dream home” gets thrown around a lot. What does it mean? It depends on who you ask.

The marketing firm Digital Third Dream asked 2,000 people what their dream home would look like – and the only obvious conclusion was that different demographic groups have very different dreams.

Men would rather be living on the beach, but women prefer the country. Not all men dream of the beach, however; millennial men would rather be in the suburbs. Speaking of millennials, their perfect house would have both modern exterior and interior designs, while boomers dream of a ranch house with a traditional interior.

Looking at the overall results, Americans’ perfect house would be 2,195 square feet in size with lots of land, peace and privacy, and cost about $1.3 million. Somewhat surprisingly, only 15% of respondents were concerned about the quality of local schools, and just 11% cared whether there were entertainment or nightlife options near their dream home.

Sound like your ideal house? Probably not, because the specifications of a perfect home depend almost entirely on personal preferences.

When you’re ready to search for your own dream home, the best way to go about it isn’t to just go out and visit model homes and open houses, or spend days and nights surfing Zillow and Trulia. It’s much better to start by figuring out what you can afford, and then create a wish list by figuring out what factors matter most to you.

Otherwise, you could spend days, weeks or months looking at available houses for sale without getting any closer to finding your dream home.

The Dream House You Can Afford

We all fantasize about things we couldn’t possibly afford: round-the-world vacations, his and hers Mercedes or Explorers, quitting our jobs. Fantasies are great, but when it comes to an actual home search you have to be realistic – even if you’re hoping that the search ends up with you moving into your dream home. And being realistic means having a budget.

The easiest way to create a house-buying budget is to add up all of your regular monthly expenses (not counting housing expense), and subtract that number from your family’s monthly take-home pay. That tells you how much you’ll have each month to spend on your mortgage payment (which includes property taxes, homeowners insurance and private mortgage insurance), extra utility costs, repairs and maintenance.

Now, determine how much free (or readily-available) cash you have available for a down payment, closing costs, and a 3-6 month cushion of “emergency funds.”

With those numbers, and supporting documentation like pay stubs and tax returns, you can apply to a lender for a mortgage preapproval. That letter not only helps during the home buying process, but gives you a realistic estimate of how much you’ll be able to spend on a new house, and the interest rates you’ll have to pay.

Now that you have a general price range to work with, here are some “wish list” categories to consider before starting your real estate search.

Style

You may always have visualized living in a single family home, but for those buying their first home, a townhouse may be the answer to their prayers. A townhome is also more budget-friendly, and may be easier to find in a difficult housing market.

Many first-time homebuyers say they’re ambivalent about home styles: “I don’t care what it looks like, as long as it’s mine.” Nearly everyone, however, will be more comfortable in one type of house than another, even if they don’t specifically dream about owning a contemporary home or a 1920’s-style Craftsman bungalow.

Do you hate constantly going up and down stairs? A ranch is probably a better choice than a split-level. Hate cleaning? You may grow to resent living in a Victorian home filled with ornate woodwork which always seems to need dusting. Most comfortable in a small, intimate house? A cottage could be the right choice for you.

You get the idea; the “style” of a house is more just its name or textbook description. By understanding the type of house you’ll be comfortable living in, you and your real estate agent can easily narrow down the choices and focus on the style that fits you best. 

Location

City? Country? Suburbs? Most people can adapt, but you’re searching for a dream house here – so it’s important to understand your real preference.

If you’re a city person at heart, that doesn’t mean you have to move to New York. Even a smaller city with a thriving downtown can provide plenty of strolling, shopping and dining opportunities. And if your job is downtown, most cities are within a reasonable commute of both suburban developments and country living.

One other factor to think about is how close to specific services or facilities you need to be. If someone in your household has a chronic illness, how close are you to major medical centers? If you have school-age children, you might want to be in the best school district in the region. How far away is the church you’d want to attend? And in a less-serious but still important vein: if you’re a shopaholic, how close are the malls?

Neighborhood

Not all city or suburban neighborhoods are the same. Some are so quiet you can’t hear cars; in others you may need a noise machine just to drown out the sound of traffic. Families with children may want to find a side street or cul-de-sac with lots of other kids nearby, but those without children may not want to be bothered by balls continually flying over the fence and into their yard.

In some neighborhoods you can walk to the local grocery store or post office, but in others they could be a fairly long drive. Which would you prefer? Write it down.

Naturally, you’ll want to live in a neighborhood with good city or town services, so the streets are plowed in winter and the garbage is picked up on time. But that’s not something that only applies to finding a dream house – it’s probably something you’d look for in any case.

Features

Families who traditionally spend most of their time in the living room or family room will want to make sure that their living space is more than adequate. If you and your family are more likely to “hibernate” in bedrooms and offices, though, the size of those rooms may be more important. Do you have a dog, or do you like to entertain in the summer? In those cases, the size of the backyard should factor into choosing your dream home.

Have you always dreamed of having a pool table? You’d better look for a house that can accommodate it. Is woodworking one of your favorite hobbies? You may want a new home with an area big enough for a workshop. If you’ve always envisioned having a swimming pool, a two-car garage or a finished basement, your dream house wish list is the right place to make note of it.

Condition

Are you a handyman who would look forward to crafting a house to look and feel exactly the way you want it? Or will you have spare cash to hire people to make necessary modifications or upgrades to a fixer-upper? If the answer to both questions is no, you probably want to look for a home that’s in move-in condition.

There’s one more consideration. Older homes and those with a plethora of construction detail are notorious for needing constant maintenance. Without doing that regular work, your house will start to fall apart and lose much of its home value. If maintenance really isn’t your thing, you may want a house that’s newly- or recently-built, or one with modern lines and less detailing.

Now, You’re Ready to Look

Hopefully, you’ve been taking notes on all of the features you want in your dream home. Your budget and wish list will help you focus while surfing real estate sites, going through real estate listings in the newspaper, or telling your realtor the goals you’re hoping to achieve with your home purchase.

Deciding what you really want in your perfect home has one other major benefit: once your real estate agent has narrowed down the search, there’s a good chance there will be fewer potential buyers competing for your dream home, even in a hot real estate market.

Have other questions about home buying? Our comprehensive list of the questions you should be asking will help you focus your search even more. 

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