Expert: Lisa Webber - 9/21/2009

Question
Hi, I would like to buy a home but am unable to decide between 2 houses and would like some assistance.
I like the first home, it has everything I am looking for in a house and is in a very convenient location, close to work, schools, drug stores ,grocery stores/shopping restaurants..you name it, everything is in a 5 mile radius, the only down side is that it is 9 yrs old , slightly higher taxes and we'd need to change all the appliances. I don't know how the resale value would be if we needed to sell it in say 5 years.
The 2nd home is a short sale and it's price has dropped at least 45K, it is absolutely beautiful, about 2 years old, has all the upgrades - move in ready, granite throughout but it's far away from everything, there's a shopping mall about 10min away, but nothing else, far from work, school, and other regular stuff. The house is in a developing area, which I am sure will have everything in another 10 years or so. In case I do have to move in the next 5 years, would this house be the better one to purchase? would resale work better? Living there would be a little difficult, but I could overlook it, if it's the better financial choice, on the other hand the first home is also quite good (and offered at the same price)and is exceptionally convenient.
You see my dilemma? I love the convenience but don't want to end up not being able to sell the first home and at the same time I think the 2nd home is fabulous but very inconvenient and I don't know what the resale value would look like 5 yrs down the line. HELP!


Answer
That's a tough one especially because I don't know the neighborhoods you are talking about. For example in my area, 10 miles can make a huge difference as far as values.  Ten miles from here you can buy much more house, but property values are still declining and the schools don't rank as highly as they do here and those are things I would consider when purchasing a home.  With the house that is a short sale, is it in an area where there are a lot of short sales and foreclosures?  If so, that will impact values.  

I personally choose to be in the middle of everything where I can go 1/2 mile down the street to the store if I run out of milk.  I would never move to an area where I had to drive 10 miles to shopping.  That area may or may not become popular 5 years from now.  Convenience for most people is very important but some will sacrifice convenience for a nicer home.  A 9 year old home is not very old though.  I had clients that told me they didn't want an "old" house, preferably no more than 10 years but then purchased a 20 year old home in a nice, established neighborhood, good schools, and upgrades throughout the house so it didn't "feel" old.  

The hardest thing is no one knows what the resale value of any home is going to be in 5 years. If the area does not get built up, will it be as desirable as the other town? I would normally say buy the newer one if they were in the same area but with real estate location is so important.  The other thing to consider is if you're in the home for 5 or 10 years, do you want to put up with the inconvenience of being so far away from shopping and restaurants, do you want the extra commute to work and school?  Would it be worth it to buy the one that is more convenient to your lifestyle rather than gamble that the other area is going to be built up?

I guess you can figure out my vote - I would choose the one that is more convenient to your lifestyle and closer in to town.  I hope this helps - good luck with your hard decision!!!