How real estate agents can help their clients weigh the options
It’s no secret that commute time and traffic have both become major factors for home buyers. In many cases, a longer work commute limits where buyers will consider looking. However, homes at optimum price points often require only a slight increase in commute. The key is for real estate agents to help their clients weigh the pros and cons so they make the right decision.
As a starting point, it’s important to have a discussion with clients about their current commute.
If clients are severely limiting their home search to only a small area that offers a reduced commute time and are not having luck, it’s time ask two important questions:
Is a job/career change a possibility in the near future? If so, how will this alter their commute pattern? Often people weigh a specific commute as a factor without taking into consideration that a commute may change.
Is working from home an option, now or in the future? Your client may not have asked the question before because there wasn’t a need, but it could be possible that their employer offers flex or remote scheduling, which would help them.
The second consideration involves the financial costs of the commute compared to the potential value and price of the home. Two main costs associated with commuting include the cost of fuel and wear and tear on the vehicle.
Have your clients do the math to evaluate if the cost of commuting is prohibitive. Commute Solutions provides an easy to use cost calculator that allows clients to calculate their average monthly spend commuting, as well as see an estimate based on areas they are looking.
Once your client has a dollar amount attached to their monthly commute, they can look at whether or not that amount is greater or smaller than the difference in estimated mortgage payments, as well as potential property value increases of a particular area.
It may be that while one home is closer to work and offers a shorter commute, the difference in the price of a home a little farther out is greater than the cost of commuting.
But, the decision may not always an economic one. None of these calculations take into account the time spent in the car and stress some suffer from commuting.
This brings us to the third consideration – quality of life. Let’s say your client will commute between 30 minutes and one hour each way, each day. This would equal an entire work day each week. A shorter commute from a slightly higher priced home might be the better option for a client who doesn’t have the extra time to spend in a vehicle.
These factors will all be different depending on the demographics of your clients. Younger, single buyers tend to place more importance on urban amenities, time and convenience. For this reason, they are less likely to be attracted to moving farther from the center of a majority of their activities and work.
On the other hand, marriage and parenthood are what usually inspire people to move out of big cities to more rural areas.
Looking at a nicer home at the cost of a longer commute begins to look a little different when all of the factors are added into the equation. There is actually a name for this, it’s called the “Commuter’s Paradox”.
The paradox is that, although one would expect that people balance the cost and hassle of commuting against benefits of other things like a larger or nice home slightly farther away, it just doesn’t happen.
Research has shown time and again that people who have long regular commutes are not as happy as those who don’t. For this reason, be sensitive to those aspects and don’t approach this situation strictly from a numbers point of view. Your client will likely have an emotional response tied to the prospect of increasing their commute, even if it means they will have a larger, nicer home.
Assure your clients that once the impartial factors are weighed out, the pros and cons are more realistically netted out and they can better decide the home and neighborhood right for them.
Lastly, there is no ‘right’ answer. The factors involved are entirely personal. Going into the decision making process with eyes wide open will make the end result one buyers can more happily live with. And they will thank you for helping them.