Home Buyer-Needs Assessment

Home Buyer Needs Assessment

Establishing What a Buyer Wants vs Needs

A needs assessment with a potential buyer is an essential first step in the home buying process. This type of assessment helps clarify the needs and wants of the buyer, as well as their ability to buy.

We always start with financing because, while it’s fun to look at houses online, it can be disappointing when you find out you don’t qualify for the homes you’ve been looking at.

Determine a Reasonable Price Range

In the beginning of the needs assessment process, we need to establish a price range. This step in the Pre-Qualification process is important because it tells us the upper limit of what you could buy, not necessarily what you want to spend.

The bottom end of this range will be determined by your wants and needs. We regularly tell clients that it might be ideal not to take advantage of the full mortgage amount they are approved for. Then they can save for home improvements, emergencies, etc...without being strapped to a house and mortgage.

The best way to start this process is to talk to a lender but if you want to start getting a feel for what you can afford, there are a variety of mortgage calculators available online, or you can watch this video from our lender Bobby White.

Digging into the details

After getting prequalified, a potential buyer should meet with their Realtor in order to conduct a needs assessment, or in other words, we will sit down with you and discuss what your requirements are for a home. The Realtor needs to understand the buyer’s lifestyle. Once he or she has a grasp on what you’re looking for in a home and what your priorities are as they pertain to your day to day life, they can then start to plug you into the right neighborhoods based on your price range, wants and needs. Your Realtor will be working from a checklist similar to this one

Like the name implies, when conducting a needs assessment with a potential buyer we’re assessing what you need in a home. We’ll start with the basics: how many bedrooms/bathrooms and square footage of the house, a main level bedroom for the elderly or disabled, and in what area you’re looking, Most of these can be decided based on the size of the family, whether they’re growing or downsizing, etc.

The Biggest Needs of Buyers

Schools

Quality schools are usually high on the priority list, not just because of children but as resale insurance as well. Homes located in school districts with a good reputation generally do better upon resale, even in tough markets. So, savvy buyers will make schools a factor.

Commute Time

Commute time and difficulty have become really important to people. Many people move to the Pikes Peak Region to improve their quality of life. This often means minimizing their commute times. The good news is that Colorado Springs and the surrounding area is generally easy to commute. Of course, there are exceptions but your Realtor can help you avoid the classically bad commutes in our area.

Proximity to Amenities

Convenience to shopping and dining is another important factor your Realtor will investigate. Like the commute to work, most people want shopping and restaurants to be convenient as well. This often becomes a balancing act when buyers also value privacy, but this is part of the process.

The Wake-Up Call

The needs assessment starts as a list of wants, needs and ability, but it really continues until the buyer finds their home. Once the Realtor has a good idea about your wants and needs in conjunction with your price range, they’ll put together an initial list of homes to see. After touring these initial homes, buyers sometimes feel disappointed and frustrated. They’re now starting to realize they most likely won’t be able to get everything they want in a home. The Realtor can now use the needs assessment in order to help the buyer manage their expectations.

The Balancing Act

For most people there are more criteria than just the earlier mentioned ‘needs,’ and depending on how much house you can afford, other wants might be included in the needs category. When working with a limited budget, though, you’ll likely need to prioritize your wants so that both you and your Realtor know what you’re willing to compromise on.

An experienced Realtor will help you prioritize your wants and needs. The best Realtors are also masters at finding creative compromises. For example; knowing about a house for sale in your price range on a street that appears to be in a school district you aren’t interested in, but is actually just across the boundary from the district you want but didn’t think you could afford. They will help you shift your wants and needs according to your price range.

How Do You Make Tough Choices?

These are some examples of the variety of things that fall under the wants of the buyer: a basement, a finished basement, a deck/patio/sunroom, the age of the house, a gas or wood burning fireplace, the view, vaulted ceilings, a large and/or fenced in backyard, backing up to an open space or golf course, a property with trees, privacy from neighbors, acreage, upgrades (anything from granite countertops or hardwood floors to stainless steel appliances), and natural water.

Unfortunately, natural water like a running creek through the property or a house backing a lake is unlikely to be found in the Colorado Springs area. There are several small lakes in the “Tri-lakes” area (Monument, Palmer, Woodmoor and now Forest Lakes), some creeks running through the Ute Pass area and on the northwest side of town slightly south of the Air Force Academy, and creeks in Fountain and the Cottonwood area. Other than that, if you’re looking for a home in the Colorado Springs area, you’ll likely need to be flexible about whether or not a house with natural water is available.

The most important factor when buying a home is the location because it’s the one thing that can’t be changed. The second most important factor is most likely home size because it is extremely expensive to add on to a home.
Buying a home that has good resale value is often also a very important factor. If you know you’ll be transitioning out of the community within 3 to 5 years for military, job, family or any other reason, you might need to resist your desire to buy the most expensive or unique home in the neighborhood. A classic home in a popular, well-kept neighborhood will often be the best bet for good resale potential.

When you can’t find a home within your budget with the desired age, size, style, and location, it’s time to start talking about what criteria you’re willing to compromise on. If you’ve already prioritized your wants, this is a little less of a speed bump than it otherwise might be. If not, you’ll need to consider if you’re willing to accept an older home in the right area, a longer commute for an ideal house, etc. In this high-demand market, buyers are forced to make more sacrifices than they might be expecting. For example, you won’t be able to live on 35 acres and have amenities close by on a budget.

After the needs assessment, a Realtor will take all of the factors discussed into account and set up a search for the buyer. To avoid human error on either end it’s best to keep these searches basic and use pictures, descriptions and virtual tours to decide if each house is worth a showing. Too specific of a search might exclude potential houses that the listing agent wasn’t specific enough when describing. This way you won’t miss out on a potentially perfect match for you.
Every homebuyer has a unique set of wants/needs, and your Realtor is ready to work with you to find the perfect house. If you’re ready for a Home Buyer Needs Assessment, give us a call!

Additional Homebuyer Resources: