A lower price tag doesn't always mean a lower total cost. Here's how to compare homes the right way and find the deal that actually saves you money.
If you’re shopping for a home in Portland right now, price is probably one of the first things you look at, and it should be. Price drives your monthly payment; it tells you whether a home is in your range, and it gives you a starting point for what you can afford.
But something I find myself reminding buyers about all the time is that the cheapest option on the list isn’t automatically the best one.
I want to be clear about what I mean by that, because I’m not telling anyone to spend more than they need to. If I can find you the best home at the lowest price and it checks every box, that’s exactly what we’re going to do. What I’m talking about is the situation where you’re comparing two homes in the same neighborhood, and one is $30,000 less than the other, and on the surface, it looks like the obvious choice.
The price gap doesn’t tell the full story. The cheaper home has a dated kitchen, original bathrooms, no AC, and older appliances. The more expensive home has an updated kitchen, new bathrooms, a new roof, and a new furnace. The sticker price is higher, but your total cost of ownership is actually lower because all of those upgrades are already done. Your monthly payment on the higher-priced home already has everything baked in.
With the cheaper home, you’re paying the mortgage and then writing separate checks every time something needs updating, either on your timeline or when something fails and you don’t have a choice.
Deferred costs don’t wait for you to be ready. A furnace doesn’t hold off until you’ve budgeted for it. An AC unit doesn’t go out at a convenient time. When you buy a home that needs significant work, you’re not just taking on a mortgage payment. You’re taking on uncertainty about when those costs are going to show up and how much they’re going to be when they do.
Total cost is what we actually compare. When I’m looking at homes with my buyers, we’re not just comparing listing prices. We’re looking at what the home costs, plus what it needs, versus a home where that work has already been done. That math tells you the real cost, and it’s usually a very different picture than what the listing price alone suggests. Sometimes the home that looks like the better deal on paper ends up being the more expensive one to own.
If you’re buying in Portland and you want someone who will help you look at the full picture and not just the price, give me a call at 503-522-0090 or email me at sarita@asksarita.com. You can also visit blog.asksarita.com ** ** for more. I’d love to help you find your next home.
And stay tuned for part two, where I’ll break down how sellers should think about the best deal from their side.
