What do you think of when you hear the phrase “first-time homebuyer?”
Chances are you think of a couple fresh out of college and starting new jobs. Did you know that a first-time homebuyer means anyone who has not bought a home in three years?
Yes, you heard that right. This can apply to anyone, whether they had to go through a short sale or foreclosed on a home. If it has been three years then they are considered first-time homebuyers, albeit ones with the experience to know that they need to be pragmatic about what they can afford going forward.
Prospective first-time homebuyers face several challenges, including the need for a down payment and the financial stability to qualify for a home loan. While home prices and affordability vary from one market to another, individual Purchasers must find a balance between what they can comfortably afford and what they want in their first home.
Your Solutions agent can help you prepare for this big step, whether for the first or fifth time around.
Know Your Market
Before you decide on a particular home type or neighborhood, you need to get an idea of the price range of homes in your area.
Most prospective Purchasers begin their search for a home online – by using websites such as the Solutions one – and then contact a Solutions agent who can help them focus their priorities.
Many Purchasers start looking for a home based on their commute to work or a specific school district or community that appeals to them.
If you can explain what appeals to you about a particular location, a Solutions agent with local knowledge can identify similar neighborhoods that may have less expensive homes yet matches your wish list. For example, if you want to use public transportation to get to work, you may find that a commuter bus functions as well as a car and yet can give you a broader price range of homes to consider.
Shift Your Priorities
If your main priority is to live in a specific neighborhood, you may need to compromise on the size or style of your home. Instead of opting for a five-bedroom, single-family home with a three-car garage, you may find a three-bedroom townhouse with a one-car garage can meet your needs for space while being more affordable.
Some first-time Purchasers opt for a condominium because it can be less costly and require less maintenance, but it’s important to remember that a condo also has a monthly condo association fee that will be part of the housing expenses. You can also stick to your preference for a single-family home and look for one that is smaller to meet your budget.
Just remember, neighborhoods can also have HOA fees, so make sure you check with your Solutions agent when you’re looking through our MLS.
You and your Solutions agent can also look for a home that’s been on the market longer than the current norm in its area. The Sellers of that property may be willing to drop their price a little to get their home sold. A home may go unsold for a variety of reasons, including a price that’s too high, a bad location, a flaw in the design, or perhaps issues with the condition of the property.
If you go into the process with an open mind, you may find that you can overlook a minor flaw in order to live in your preferred neighborhood.
Consider a Fixer-Upper
Research shows that Purchasers prefer a home that’s in pristine condition, but a home that requires some cosmetic improvements, such as fresh paint, landscaping, new carpet or window treatments, can also be a bargain. First-time buyers in particular need to carefully evaluate their ability to make these improvements themselves or to pay for repairs and maintenance.
You should always have a home inspection when you’re buying a home, but it’s even more important when the home has not been upgraded or maintained and is being sold “as-is”. A home inspector can help you estimate the cost of repairs.
An open mind and a broader search can yield a more affordable option for first-time buyers.