Determining Your Must-Haves When Buying a Home

As we stood under the cathedral ceiling looking over the stone-tiled patio, we could hear the owner and his son playing their XBox in one of the bedrooms.  It was penned off from the rest of the house so that Cujo wouldn't get loose. 

I thought the top-level townhome was in pristine condition considering they had a Cujo, until I peered into the room and saw a tiny 10-pound pug sitting attentively in front of the television!

Chart of Silicon Valley Newly Listed Homes

There were network connections wired into every room, and this being Silicon Valley, we asked the owner if it was standard CAT-5 or CAT-5e.  The gentleman, in his decidedly French accent, said with a bit of sheepishness, "You know, I'm not sure."  (He was a little redfaced because we'd talked about his job at Cisco.) 

So I asked whether he had a wireless network and his face lit up.  He hopped over to the storage closet in the entryway and eagerly showed off the router, neatly and carefully wired into the connectivity panel.  He didn't check for CAT-5e because he didn't need it.

The network drops were a "nice-to-have" for my client who does a lot with multimedia.  They weren't a dealmaker (and as he discovered not a dealbreaker) but given that this was the first home he'd seen as a potential buyer, he was eager to get some experience looking at houses under his belt so that he could really experience firsthand what his requirements feel like.

In the back of people's minds, most people start off with a list of requirements that I rank order informally using the "MoSCoW" method:

  • Must: What they know they want
  • Should: What they think they want
  • Could: What they don't have strong feelings about
  • Won't: What they don't want

For any number of reasons, what people say they want doesn't always line up with what they really want in their minds and hearts. 

A lot of times that's because of the difference between theory and application: being able to actually drive the commute or experience how many flights of stairs there are gives people a clearer picture of "could" vs. "won't".

The tricky part is separating the borderline "must-haves" from the "shoulds."  And with my client in the early stages of his home search, we needed to setup a stable foundation so that we'd learn those differences from every property he would see on the rest of his search.

You Can Learn a Great Deal From a Rant

I sat in the office of another client, across from him and his dustless mahogany desk.  I briefly peered out towards the Silicon Valley hills through the shades of the window behind him before he lifted his brow from thought.  He muttered cautiously, "That's a good question..." and placed his chin on his hand in the universal position for "I don't have an answer for that yet."

He wanted to tell me something but the way his eyes focused into the distance, you could see a little fear, as if to say, "People will think less of me for saying what I'm really thinking."   

I'm not judgmental and I don't remember saying anything at that point, just tilting my head to the side a little.  But what I got back, I never would have expected from this formal and staid lawyer.

"I WANT A HOUSE!" he exclaimed.  "I want a place where the neighbors respect where we live.  If they see trash on the ground, they pick it up because they feel ownership.  I want to live in a place where I don't have to be ashamed to say, 'I live here.'  I want my neighbors and I to be peers and for them not to look at my car and go, 'Who does he think he is?'  I want my wife and kids to feel important.  I want to be able to carry on a meaningful educated conversation with the people living around me.  I WANT A [ed. deleted] HOUSE!"

That joke one of my clients made about me being an iceman must be partially true because with a hint of a smile in my expression, I winked a little and asked in an ironic, almost dry manner, "So, what did you want again?"

Home Search Criteria People Don't Like to Say Out Loud

I wanted to share this conversation because it's critically important when buying a house.  There are things people never say they're looking for during a house search, but actually really need.  This gentleman was brave enough to share some with me:

1/  Prestige.  This is a really sensitive subject.  On the one hand many people want to be regarded and respected.  On the other hand, people fear that by wanting to be regarded and respected, that people will actually think less of them.  But the root cause is that sometimes people judge others based on a mental picture of where they live.  What do you think of when I say New Jersey or Alabama?  Or East Palo Alto?  (I'm from Louisiana: insert stereotype here!)  If prestige is important to you, then that should be included as a criteria in your home search without emotional prejudice.

2/  Owner's Mentality.  I have a personal story here, all this over a simple piece of paper.  I lived in a large apartment complex that was in a good location, was kept in decent condition, and had below market rents so I could save money and buy a house.  I stepped out of the elevator next to the trash chute and noticed a crumpled piece of paper lying there on the ground.  As a renter, my first instinct was, "Oh, the maintenance people will take care of it."  I eventually did throw that paper away but it left me wondering whether I would have thought twice if it were in front of the home I lived in.

3/  Neighborhood Pride.  Have you ever been to a sleepy old manufacturing town whose plant closed long ago?  Where people can't wait to find a way out?  Or a town that's languishing under the weight of its own lack of culture.  The transient nature of people living there is much different than the sense of community an identity engenders. 

4/  Belonging.  Whether it's being close to the culture of your parents or your parent's parents, to feeling like you can relate to your neighbors, that sense of belonging can be very important to your enjoyment of your home.  Sometimes it doesn't even boil down to culture.  If you're single, living in a family community with lots of kids around may not be preferable to being closer to other singles whom you can relate to.  And being a movie junkie with a huge home theater system (read: speakers) in the middle of a complex of semi-retirees might not make you any friends.

5/  Less competitive schools.  Some parents, even though they care about their children's education, don't want to put that much competitive pressure on their kids.  This is one I hear with increasing frequency. 

Common Trade-Offs

After we left the top-floor townhouse owned by the gentleman at Cisco, I told my client that, yes, you can have your dream house, but only if you know what's really important to you.  After all, since homes are so expensive, you don't want to have to pay for amenities and benefits that mean nothing to you.  Why would you spend your hard-earned money on something you don't need or want?

Here in Silicon Valley, people make trade-offs every day when buying real estate but it takes a lot of self-reflection and some experience actually going through the home search process for those priorities to really become clear. 

Single-Family vs. Multi-Family Properties

"Maintaining the lawn just sounds like work.  If I'm going to be doing work, it may as well be for work!" he said.  The land you get on a single-family house is valuable but if it hurts your lifestyle, then what are you paying for? 

Chart of Feb 2007 Santa Clara County and San Mateo County Home Prices
Chart of Feb 2007 Santa Clara County and San Mateo County Home Prices

According to RE InfoLink, in February 2007, the difference between buying the median townhome or condominium and the median single-family is between $200,000 and $300,000 in both Santa Clara County and San Mateo County. 

My client in this article chose to look for townhouses and condominiums because he can get more square footage inside the home for the same money and minimize the responsibility he has for maintaining the property.  He doesn't have any kids or need room for a swing set, but if he can get a small yard or patio for entertaining, that would be perfect.


Ever hear the advice, "You should always buy a home where there are good schools?"  There are advantages to this because these are neighborhoods which are (in general) the last ones to decline and the first ones to appreciate, but remember that if the neighborhood has a reputation for good schools, that reputation is already priced into the house. 

My client used the words, "I'm single and this isn't my last house.  Why would I want to pay for a good school district?" 

If you have school-age children, you may save money by buying in a less expensive neighborhood and sending your kids to private schools.  You will get more house for your money if you don't have to pay for the school district's reputation.  And you may get more upside from an ascending school district which is building a great reputation than one that's maintaining its high scores.  When the best kept secret in the area comes out, people will be looking for that good value.

Cupertino and Palo Alto, among other cities in the Bay Area, have prestigious school districts.  How do the median prices for single-family homes compare with other cities around Silicon Valley?  The chart of figures from February 2007 speaks for itself.  What are the best kept secrets in Silicon Valley?  That's a whole 'nother article.


I had a client say that he enjoyed a reasonable commute time to be able to "switch modes" and another wanted to catch up on reading while on the train.  I'd argue that most people consider commuting a necessary evil based on where they live and work.

Time is money, right?  Well, almost, because no matter where you were born, what your parents have, or what your opportunities are, everyone starts off with 24 hours in a day.

You can measure the value of your time in two ways.  Economists measure the value of time in terms of opportunity cost, the amount of money you can make with your time at its highest and best use.  Most people measure it in exactly the same way except with things they can be doing: activities like spending time with the family, and reading a book, to taking a second honeymoon. 

You'll have to help me determine the value of your second honeymoon, but I can show you the cost of your commute.  Let's say you've live in your home for five years and take the same commute each day.  You earn a conveniently round number $100,000 and work 50 weeks out of the year for 5 days a week.  Here's what your commute costs:

Chart of the Cost of Your Bay Area Commute
Chart of the Cost of Your Bay Area Commute

At only half-an-hour each way, the commute costs $62,500 over that period and $125,000 if your commute is an hour (two hours a day) each way! 

There's no value judgment behind these numbers.  Some people want to save money to keep their families fed, happy and well-educated so they will trade more commute time for cash savings.  Others prioritize spending more quality time doing other things and choose to allocate more resources to the problem. 

The beauty is that the choice is up to you and experiencing a house search with an expert is an effective way of truly understanding what you want and what you're willing to trade-off.