I recently created a startup company called Homeology. Our focus is to help people find the right place
to live in the Chicago metro area. During the startup process for Homeology we did tons of surveys and
interviews to help optimize our business model. We learned a lot about how people go about buying a
home, and we had a few key findings to share that could help you avoid a disastrous experience for you
and your family.
1. Underestimating the time required
It took our respondents over 6 months to find a home. And this was with a significant amount of
time and effort spent on the home search. The actual hours spent finding a home averaged over
120 hours. So give yourself plenty of time. Consider any deadlines you have in moving. Think
about when your kid needs to start school and the time of year your want to buy/move. We
recommend starting your home search as early as you possibly can. Remember that closing dates
are negotiable. There is generally a low inventory of homes right now, so while you may be able to
sell quickly, but finding the right place may take longer than you think.
2. Focus on the home rather than the community
We found that people spend 60% of their time looking for homes rather than looking for a
community. It is a great feeling to get a house with all the space and features you want, but
remember that you do need to leave the house once and a while. A strong sense of community has
so many benefits to your family. Your family happiness, financial wellbeing, your children’s social
and educational development all depend on where you live. We recommend you spend 80% of your
effort on the community. When you are absolutely sure you have the right fit, the home search is
more focused and time efficient. You will also find it easier to work with realtors when you know
exactly where you want to be.
3. Not looking at the full cost of owning a home relative to your budget
We can’t stress this point enough. We have heard from many people that they ended up being
house poor because they did not account for all the costs involved in home ownership. First, make
sure you target a comfortable monthly expense budget for your mortgage. Consider all our current
expenses, college loans, alimony, child support, car payments, etc. Don’t forget about future
expenses that could come up. Is your car old and need replacement in next year or two? Do you
have an aging parent who may need aide? Do you need to pay for education for your children?
Once you have all these expenses considered, look at what is left over from your monthly take home
salary and other income. Now ask, do you want to travel? Does your family enjoy hobbies that cost
significant money? Do you love to entertain? Think about all this when setting your monthly
budget. Once you have a comfortable amount of money you want to spend on home expenses after
all your personal and lifestyle expenses, then you can start to understand a target mortgage
payment. Now you need to consider how much money to put towards a down payment.
Remember that you should be keeping some savings on hand for emergencies. Now you can use a
mortgage calculator to understand your monthly payment considering terms, rates, down payment,
insurance, and taxes. Taxes vary wildly in the Chicago metro area, so be very conservative here.
Zillow has a nice calculator at http://www.zillow.com/mortgage-calculator/
You will be in a much better place if you understand these common mistakes and focus on community
and budget. If you don’t have the time to devote to the home search process, consider reaching out to
Homeology. At Homeology we are Living Location Experts. We have the pulse on the community and
location factors that matter to today’s families. We help you find their ideal community by matching
your personal needs and lifestyle to over 200 Chicago neighborhoods and suburbs.
Contact us today through www.homeologychicago.com