Approach Buying Your Next Home Like a Smart Car Shopper

In thinking about how well-informed, smart car shoppers compare with most home shoppers, it occurs to me that too many home shoppers have much to learn from smart car shoppers. And this is especially true in a market where too many prospective homebuyers and real estate agents appear unduly pre-occupied with short-sales and foreclosures.


While car shoppers, like home shoppers, start off with “price” being an important criterion for ownership, the knowledgeable car shopper recognizes that “total cost” is much more than merely a particular model’s sticker price plus cost of all custom features, delivery and dealer prep costs, license tags, and taxes. The smart car shopper’s total cost also includes the operating expenses of mileage, insurance and vehicle maintenance and likely residual trade-in or re-sale value at the end of ownership.

In the example of a “Hummer”, drastic mark-downs in initial sticker cost are insufficient to overcome a smart shopper’s understanding that the costs associated with extremely poor gas mileage, a poor maintenance record and even worse re-sale value result in the long-term “Total cost” of this vehicle being much greater than that of alternative higher performance, higher mileage and higher re-sale value vehicles with a higher initial sales cost.

What this suggests for smart home shoppers is that they should be even more concerned for life cycle “total costs” than smart car shoppers. The least lifecycle “total cost” is often associated with an initially more expensive home that accurately can be described as a high performance, third-party certified new home--one designed and built with energy efficiency, sustainability, environmental preservation and indoor air quality in mind. For starters, a $150/mo energy savings advantage for the high performance, new home over the older home now, only increases as utility rates rise over time. Thus, the money home shoppers can lose through the lack of energy efficiency in an initially less expensive short sale or foreclosure property readily can equal or exceed the higher initial cost of the higher performance choice. At the same time, the third-party certified, high performance home will provide comfort levels typically not found in initially less expensive alternatives, will experience less maintenance expense as the result of incorporating more durable materials, and will facilitate a more healthy level of indoor air quality. These latter qualities decidedly translate into higher re-sale value because the home qualities will continue providing these same benefits for successive owners.

Just as achieving the best value in a vehicle typically is not found in the initially least expensive alternative, home shoppers will find that same result born out as they consider one of the most momentous investment decisions of their lives.