Why You Shouldn't Buy Your Forever Home

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***Updated 4/30/21 ***

I overheard my friends talking about buying a bigger home, and the way they spoke made me want to yell, “Stop! You’re playing into the seller’s hands!”

When the housing market is hot, it seems natural to want to get in on the action. The fear of missing out (FOMO) messes with us all—especially when home prices are shooting through the roof because of low supply. FOMO leads to self-doubt.

What if we never find a house to buy?
If we wait to buy, what if we can’t afford it later?

To get in on the housing action, some people will even sell a decent home so they can “property ladder” into their next. Property laddering is when the equity from one house is rolled into the next. That way, they can buy a bigger, more expensive property—one they likely didn’t need.

The real estate industry has convinced buyers that a forever home is an American dream.

Banks advertise loans for forever homes.

Even HGTV wants us to believe in the forever home concept.

Everyone wants in on this lie—except me (and I’m a real estate broker, albeit commercial).

My friends mentioned that the house they saw was so perfect (ugh) that it would be their “forever home.” This decision will max them out financially and emotionally, but there was not stopping them.

The Emotional Trappings of the Forever Home

The problem with the “forever home” concept is it’s steeped with emotion when it should be focused on financial aspects. Can you afford it? What’s the long-term cost? Are there other things you could be doing with this money?

But real estate agents and lenders want buyers to get emotionally invested in a house—an inanimate object.

Imagine yourself eating breakfast in this kitchen and looking out over your backyard.
What kind of projects would you work on in this oversized garage?
Think about what Christmas will be like this year in this wide-open living room.

As consumers, when we get excited, we start saying things like “this is our forever home” or “it’s our dream house.”

Gag me.

Buyers convince themselves that this is where they will raise their family and spend their golden years. It may be a beautiful sentiment, but it’s stupid to think those things when negotiating a purchase worth hundreds of thousands of dollars.

Here’s something you may never have heard, but it is essential when negotiating for anything:

Whoever wants it less, wins.

Think back to your high school crush. Were you out of your mind for them? Did they even know you existed? Maybe you spent every day thinking about them, dreaming that there might be some type of future for you.

When that crush finally noticed you, what happened? More than likely, you revealed yourself as a complete dork.

Why? Because you wanted it more than they did.

Whoever wants it less wins.

In a hot real estate market, emotional negotiating is the worst thing to bring to the bargaining table. When a buyer shows up and throws around terms like “forever home” or “dream home,” you’re sunk. Push your chips across the table.

You’ve given up the ability to negotiate with a calm, cool head. Even when you have a real estate broker helping, emotional bargaining will have you second-guessing everything your agent does.

Did my broker try hard enough?
Did my agent verbally pitch our deal to the seller’s agent, or did they just email it to them?
We could have done this ourselves. The seller needs to know how much we want to buy this house. If they only knew that, then they would sell it to us. We’d take better care of it than the other people.

Ugh. So stupid.

The forever home concept is kryptonite to logic. Purchasing a home is one of the most emotional experiences most people will go through. We all must struggle for our higher reasoning in moments like this.

That’s why people make overpriced offers and push their budgets to the limit. They battle the fear of missing out. Emotions rather than reason have taken over.

When that happens, they’ve automatically lost.

The Justification a Forever Home Gives You

Here’s where the forever home concept spins a person out of reality.

If your house is going to be forever, then you’re going to need plenty of room. Who knows how your family may grow or how your interests may expand? You must plan for various contingencies, which leads to buying more than necessary.

Have you ever eaten so much that your stomach hurts? They say your eyes were bigger than your stomach. That’s what this may be like.

First, you start talking about a little extra land for some elbow room—don’t want the neighbors too close. They might be too noisy. Or maybe you’re too loud. Either way, you’re soon looking at ten acres on the edge of the county.

Do you think that’s ridiculous? It happened to me. My girlfriend and I did the exact thing. Why? Because we felt we wanted ten acres for peace and quiet so we could throw a football around with the boy. I can’t believe how quickly a conversation about “a little extra elbow room” spiraled out of control. We’re lucky we didn’t buy that.

A forever home also justifies you to overspend on personalizing the house in a manner that makes it feel extraordinary. Adding expensive upgrades like an over-the-top kitchen, a massive deck, or a warehouse-like shop are just a few items that may bust your budget while in the pursuit of making your one-of-a-kind castle.

When the time comes to part with your forever home (the time will come, by the way—see below), all those cool upgrades won’t seem so neat when some buyers look at them as detriments.

How Much is all this Foreverness Going to Cost?

By the way, how are you going to pay for all the new happiness a forever home is supposed to bring you? Are you buying the house you can versus purchasing the place you should?

A forever home stretches your budget to its limits and maybe even beyond. Remember the Great Recession? How soon people forget. Housing booms do go bust.

If you get fired, laid off, or downsized, that forever home may become a massive albatross.

House Versus Home

A house is a structure that you live in. It becomes a home while you are there. When you move elsewhere, that structure becomes a house again. You can live anywhere and make it a home.

Financially speaking, the house you live in is your biggest liability. Robert Kiyosaki explains this concept in Rich Dad, Poor Dad. Your house doesn’t put money in your pocket. It only pulls money out with a long, slow, sucking sound until the moment you sell. Hopefully, you make some money. Sometimes you don’t.

Accepting that your property is just a house, and removing the emotional ties to it, frees you to make better decisions.

Is this the best use of your available capital?

Should you upgrade a room, or is that money better invested elsewhere?

Learn to separate the emotion of “home” from the financial aspect of “house.” You and your loved ones are what make it a home. Otherwise, it’s just a structure to protect your stuff from the elements.

It might be a tricky concept to grasp, but let’s put it this way—would you question a friend for tying their identity to a European sports car? Why not look at your house through the same lens?

What Can Derail a Forever Home?

You’ve heard my advice, and maybe you’ll choose to ignore it. That’s your prerogative. Feel free to say, “This guy can shove it. I’m buying my dream house and make it my forever home.”

That’s cool. I understand. Over the years, I’ve heard plenty of good advice that I’ve disregarded. However, let me give you seven simple reasons that will derail your forever home.

#1. Divorce

If you’re reading this and thinking, “I’ll never get divorced,” I hope that’s true. Nobody gets married thinking someday they’ll be sitting at an attorney’s office arguing over who gets to keep the lawn furniture.

However, a considerable number of marriages end in divorce. Some reports say it’s as high as fifty percent, with a higher rate for second and third marriages.

A divorce quickly ends the concept of a forever home.

#2. Age

Did you buy a home that will accommodate you as you age? Someday (if you are lucky), you will be seventy, eighty, or older. A house with many stairs and a ton of lawn maintenance is not exactly a ticket to happiness.

Also, you may want a 3,000 sq. ft. home today because you have a houseful of children. Twenty years from now, when it’s just you and your spouse, that square footage is going to be a bitch to keep clean and maintain.

Age and forever are mutually exclusive concepts.

In other words, it ain’t going to happen.

#3. Death

This is taking #2 above to the ultimate conclusion, but each of us will die.

Or worse, a loved one will die. That will change the dynamic of the forever home, and you may not want to live there.

If you’re lucky, you get to live a long life, but none of us are getting out of this journey alive.

Death is less than forever. It’s simple math.

#4. Loss of Employment

You don’t buy your forever home thinking you’re going to be laid off or fired. Guess what? It happens—all the time. Even in a good economy, people get downsized.

If you purchased your forever home at the edge of your economic bubble, a loss of income is going to cause something to burst.

The bank doesn’t care that it was your forever home when they post the foreclosure notice. They aren’t your friend.

#5. Relocation for Employment/Opportunity

After four sad reasons, here’s a happy one

You earned yourself an opportunity at your job! But it’s going to require you to relocate. Bye-bye, forever home.

How can you relocate when you have a big, fat mortgage stretching your finances to the limit? Especially in a slow housing market (never forget that this happens).

That house may become a ball and chain holding you back. The boss won’t care that you can’t take the promotion due to your forever home. If you insist on staying because of the house, they’ll move on to the next person in line.

Promotion denied.

#6. Change of Neighborhood Demographics

Have you seen this in your city? Neighborhoods are living, breathing things and can decline over time. Once proud regions have been reduced to boarded-up zombie homes in the span of thirty years. A forever home should withstand thirty years, right?

Are you buying your forever home in an area of town that is in decline or growth? How can you tell?

Decline is bad, but growth isn’t that much better. Growth can turn the best forever home into something you might want to escape. Imagine buying a home on the edge of town where it’s lightly populated. Twenty years later, the city has grown past you.

Your forever home may stand the test of time, but the neighborhood might not.

#7. Change of Taste

You bought a house that you love and fulfilled your every desire. Perhaps it’s a mid-century modern. All those sharp lines and cool architectural features speaks to the hipster you are today.

Can you guarantee you’ll still love that style of house twenty years from now?

What spoke to me as a twenty-four-year-old doesn’t hold much allure to me now. Why? Because I was a ding-dong back then, and my tastes have changed (thankfully). That included the type of home I wanted.

Still don’t believe me? Look at your high school yearbook and realize how much you’ve changed in ten, fifteen, or twenty years. You better hope your taste in forever homes is better than your fashion sense.

Your Words Matter

We must all wake up to the lies we tell ourselves by saying “forever” and “dream.”

Nothing on this earth is forever. It’s how life works—time to grow up.

Don’t put yourself into an inferior negotiating position by overselling yourself on “forever.”

And don’t put added weight on your finances by getting fooled by the “dream.”

You’ll make better decisions when you embrace the concept that a house is just wood, nails, and other materials. It’s only a thing—a big, expensive thing that you will someday sell.

Your home is where you and your family are at any moment.

And that will change over time.

What do you think?
Do you believe in the concept of a forever home?
Or do you think it's emotional quicksand while you're negotiating?