According to a recent survey, roughly one-third of homebuyers said that they went over budget to acquire their most recent property. The survey involved 1,214 people throughout the country who had bought a home in the past four years. Those who went over budget said that they did so by an average of $16,510. This was largely because available homes were receiving multiple offers, which pushed the prices up.
Starter homes were among the most likely to see the most interest after being put on the market. In many cases, buyers will spend more than they planned to if it means getting a property in a desirable location. Younger buyers were more likely to spend over their self-imposed cap. Millennials surpassed their budgets by an average of $24,545 while baby boomers went past their planned spending limits by $8,024.
One reason why younger buyers go so far past their planned budget is because they lack the experience to create realistic limits. It is also because they are most likely to purchase the starter homes that are in such demand. In order to afford mortgage payments, some homebuyers have been forced to sell valuable possessions and ask family members for support.
When buying residential real estate, it's critical for a buyer to consider how much he or she can afford ahead of time. Ideally, budgets will be determined by looking at current asking prices and what homes have sold for recently. Buyers should also take property taxes and HOA fees into account when developing a budget. An attorney may be helpful in answering questions about those other real estate topics.