Stay within your budget when you’re seeking a home is usually a good idea. After all, it dictates how much home you can reasonably afford, and therefore which homes to look at, so you won’t end up house poor or risk going into foreclosure because you couldn’t maintain your mortgage payments.
On the other hand, there also are times when viewing houses outside of your budget makes sense. Here are six top reasons you shouldn’t be afraid to take a peek outside of your price range.
1. You can’t find anything
There’s a lot of competition among buyers in today’s real estate market, especially in the lower price tier. In those cases, it sometimes makes sense to look upward if you want to find a home that meets your desires or needs. If you truly are unhappy with what you’re seeing in your price range, viewing homes in a higher price range can make you more willing to stretch your upper limit, even if it means getting some help from parents or another source.
2. Price isn’t the only factor
Ideally, you want to find a home within your desired price range. But staying under budget might not be as prudent as you might think. Sometimes it’s a good idea to look at properties in preferred locations that are slightly above budget to gain benefits such as an easy commute to work or a choice school.
The result? A better quality of life and lower transportation costs. For example, your kids may be in private schools, but moving to the right school district so they can attend public schools can save you thousands of dollars a year. Also, if you have to drive across town in bumper-to-bumper traffic for work or to shop, it might be worth it to pay more to save wear and tear on your vehicle and yourself.
3. You can learn a lot
Buyers often have unrealistic expectations when it comes to move-in-ready properties in their price range. Viewing properties above your specified price range can give you a better understanding of what attributes—such as condition, amenities, finishes, location, and placement—drive prices higher.
After seeing homes above and in your price range, work with your agent to come up with an educated plan and to narrow your searches based on priorities.
4. You can see what might be in striking distance
Found a home that’s outside your range? There’s a chance your agent can negotiate it down. Your agent will look at the most current comps in the area, length of time on the market, time of year, state of the market, and the condition and curb appeal of the home, and if any of these factors indicates that the sellers might be open to negotiation, they can use that information to present a realistic offer.
5. You may actually get a better deal
In some cases, a home within your budget might not be as sweet of a deal as one that is supposedly out of range. For example, some properties within budget may need renovations, while a higher-priced home may be newer and move-in ready, thus saving you time and money in the long run. Something else to consider: The taxes maybe significantly lower in one area than in a neighboring town which means a more expensive house might be a better deal if that area has a lower tax rate.
6. A higher amount might be totally manageable
Sticking to a budget is a smart money move, but it also is important to put that budget into context. Adding an extra $10,000 to your price point could make a big difference in the quality of home or area, and a $10,000 price bump only adds about $55 more a month to your payment.