Smaller Houses, Farther Out Are Frequent Compromises
By Daniela Deane
Washington Post Staff Writer
Wednesday, March 23, 2005
Sharon and Edward Virag had a clear vision of the house they wanted to buy when they moved here from Phoenix.
They dreamed of an older red-brick Colonial with black shutters. They didn't want to live too far out -- Fairfax Station was as far from the District as they planned to go. And they wanted at least a half-acre of land.
To get that, they were willing to pay from $650,000 to $800,000.
As it turned out, they got none of the above. They paid $900,000 for a newer, more modern-style house on less than a third of an acre farther out, in Chantilly. They bought the house after seeing it only once, at night.
And they're ecstatic.
The Virags aren't that unusual. With house prices soaring throughout the Washington area, finding a new place to live often involves a series of difficult choices. Many would-be homeowners venture into the market with well-considered wish lists, only to find themselves crossing off one desire after another.
Buying a home has always involved some compromises. The reality of what's for sale at any time has always forced buyers to accept, in order to get. But in today's frenzied atmosphere, the pressure to compromise may have reached new levels. Buyers must adjust their expectations quickly -- on price, location, condition, style, size and a host of other seeming must-haves -- or forget it.
"It got pretty comical at the end," Sharon Virag said. "You compromise and compromise and compromise and then you see a house that has none of the things you wanted. But it's nice, it's still standing, and it has the number of bedrooms you want, so you go for it. But then you get outbid. It wasn't even the house you wanted and you couldn't have it."
And lower-income or middle-income families aren't the only ones facing this situation, real estate agents say. Although having more money obviously means having more options, it doesn't necessarily mean getting everything you want.
"The hardest job a real estate broker in Washington has today is showing buyers what they're not going to get," said Jean Smith, an agent for Re/Max Allegiance in Georgetown. "And it's true in every price range. There's not much there and there's not much good there. Nobody gets what they want, even in the multimillion-dollar range."
Robyn Burdett of the Re/Max Allegiance office in Fairfax, said: "Every single person out there is having to figure out something they're willing to give up."
Price is the most difficult compromise, and at the same time, the one that probably comes up most often.
"The key factor you can't deviate from is what you can afford," said Peggy Parker, an agent with Keller Williams Realty in Arlington. "If you can't afford it, you can't afford it. So we always start with price range. Here's what you can get in your price range is the first thing to show a buyer."
But buyers routinely stretch to pay more than they originally planned to satisfy other desires. Bryan Sims and his family, who are moving to the Washington area from North Carolina this summer, pushed their budget about half a million dollars to get the location they wanted.
Instead of paying $1 million for a house in Bethesda, close to downtown and to the schools they wanted, they went up to $1.5 million. "We didn't get the land we wanted," said Sims, whose new house sits on less than a quarter of an acre. His 4,500-square-foot house in the Raleigh suburbs, which is worth about $600,000, has a swimming pool and an acre of land.
"But we got the most perfect location," he said. "We paid a heck of a lot more than I ever thought we'd pay, but what we wanted didn't exist."
To hike what they can pay, some shoppers spend money they would prefer to earmark for other purposes; others find mortgage financing that reduces monthly payments, perhaps with an adjustable-rate or interest-only loan. But for those shoppers who don't have the means -- or the nerve -- to increase their budget the way Sims did, location is the next big sacrifice.
David and Elizabeth Alberding learned that recently.
The couple started out wanting a single-family three-bedroom, one-bath house in Laurel, where they have been renting for several years. They hoped to pay about $200,000.
That house didn't exist.
"We considered a fixer-upper," David Alberding said. "We considered a bunch of things. The first house we bid on was listed at $219,000. We bid $230,000, but we got outbid."
To find something they could afford, the couple expanded their search to Hagerstown, where they recently fell in love with a three-bedroom, one-bath Colonial for $180,000.
But there's a big compromise: Elizabeth Alberding's commute to her job in Northern Virginia will now be about an hour and 45 minutes each way, at least a half-hour longer than from Laurel.
"Instead of maxing out what we were able to spend, and living on ramen noodles, we're going to have a decent, comparable lifestyle to what we have now, and our own home," said David Alberding, who works from home. "But I'm really nervous for my wife and the amount of time she'll be spending on the road. She says she'd rather have a longer commute to a home she owns, though."
Carol Hermandorfer, an agent at Long & Foster Inc. in Burke, says many of today's buyers are making the kind of location compromise the Alberdings just made.
"People are moving further than they thought they'd have to all the time," she said. "They start out wanting a new Colonial close to the Beltway. They'd like it to be under $500,000. From there, we move out to Frederick County."
Expectations vary greatly, often depending on a buyer's previous homeowning experience.
"My hardest [buyer] was a guy coming from a little Colonial in Missouri that he couldn't sell for $130,000," Hermandorfer said. "The people coming from New York City and California are easy." Prices in parts of those areas make the Washington region seem reasonable.
After buyers compromise on price and location, they may still have to scale back on the type of home they initially desired, the way Jeremy Cohn just did.
Cohn started out wanting a townhouse in Rockville. He was willing to pay up to $300,000.
"I thought I could certainly buy a nice townhouse for that," said Cohn, who wanted to be able to barbecue outside in the summer, which doesn't sound like an outrageous wish for $300,000.
"I saw one in that price range that looked like it was in a housing project or a military barracks where the landscaping hadn't been tended to in weeks," he said. "I was shocked, sitting there with my mouth open." Cohn quickly realized that the kind of townhouse he wanted in Rockville would cost more like $500,000 or $600,000, money he didn't have.
It was time to compromise.
In October, he found something he liked -- a 1,161-square-foot two-bedroom, two-bath condominium for $280,000 in Rockville.
"I thought that if I was spending almost $300,000 for a condo, I'd be closer in, or in D.C. I didn't want to live this far out, or in a condo, but I'm happy now."
Cohn said it took him about six months to accept the choice he had to make. Only then was he able to push ahead with buying.
Besides the shift down from single-family house to townhouse, from townhouse to condo, from two-bedroom condo to one-bedroom condo, real estate agents say buyers are also compromising on the style and the condition of the homes they're buying. They may give up on the Colonial they originally wanted for a split-level they can afford. Or they buy a house that isn't in the condition they had hoped for to satisfy a desire higher on the wish list.
Some things are more difficult to forgo than others, though.
"People will quickly give up a garage to be close in," said agent Kris Feldman of Coldwell Banker Residential Brokerage in Bethesda. "They give up garages all the time. What they really don't want to give up is the family room off the kitchen, especially with kids. Or a decent master bedroom. The finished basement is no longer as important. They'll give that up."
After buyers have compromised on price, location, style, condition and features, the next sacrifices come on the terms under which they agree to buy.
Besides offering to pay more for the property by adding escalation clauses to their contracts -- stipulations that they will increase their bid -- buyers also routinely have been waiving key contingencies in their purchase contracts, such as home inspections and appraisals. They're also giving sellers other concessions, such as free rent-back periods, in order to win out against other bidders.
"The thing that's most disturbing to me is that there's a lot of people out there willing to spend so much money and then put themselves at such great risk by waiving home inspections," said Maureen Loughney, who recently refused to waive inspection to purchase a two-bedroom condo in Alexandria. Agents say they never recommend that a buyer waive a home inspection -- they just tell them that, well, a lot of winning bidders do.
Loughney bought a condo from a developer, part of a conversion from a rental building. "You'd think that if you're spending almost $400,000 on an apartment, you might be able to check out the furnace," she said.
She will get a home inspection, but she compromised on several other desires. The condo is smaller than she wanted and not in her top location. Not to mention that she started out wanting a small house, "with a little driveway and four walls," in Arlington.
All this doesn't mean home shoppers should just give up on a wish list. They should make the list, agents say, but need to be realistic about it.
"I tell buyers to go ahead and make their lists," said Norman Lemcke, an agent with Continental Properties Ltd. in the District, "and then prioritize that list. You're going to have to cross things off your list, but it's better to work from the bottom up."
Despite all the compromises, many buyers still seem happy with the homes they settled for. Maybe that's human nature. Maybe it's because a lot of them went through months of looking, and then bidding and losing, before finding something acceptable. Whatever the case, there's often still joy after the ink has dried.
Consider Alan Greilsamer and his wife, Lauren.
The recently married couple, who had been renting in Northwest Washington for 18 months, initially wanted to buy a house in the American University Park neighborhood of the District. They had a budget of around $600,000, and wanted a place they could fix up slowly to make their dream home.
They found a dated, tired Cape Cod for $750,000 that they liked, but when they talked to contractors, they discovered it would take another $300,000 or so to bring the house anywhere near what they wanted -- a total price tag of more than a million dollars. They just couldn't bring themselves to live in it the way it was and do the work slowly.
So the couple ended up with a townhouse in Potomac for just under $600,000.
"We've changed our whole environment," Greilsamer said. "Here are two people who wanted to live in the city, who love city life. Now, we're truly in suburbia."
But on their first weekend at their new townhouse this month, the pair found that despite everything, they were still quite happy.
He said, "We kept looking around at our big, beautiful new house and saying to each other, 'We love this place.' "