What first-time buyers should look out for in a starter house
You have dreamed of it for years Buy your first homeand now it’s time. They’ve created Pinterest boards of photos of beautiful home decor, watched every episode of HGTV’s “House Hunters,” and spent hours browsing through listings online. You know exactly what you want.
But did you do the math?
When it is time to look for a starter home, many young – and not so young – people quickly find that their budget does not cover their dream home. That means making tough decisions and seriously thinking about what matters: will granite countertops make you happier than living 15 minutes closer to work? Is it worth doing without a third bedroom? Lives in Your dream area more important than a yard?
“It’s not just about the home,” said Karen Carr, a certified financial planner with the Society of Grownups, a Boston-based group that teaches home buying seminars to provide financial advice to young adults. “We talk a lot about buying your life every now and then the life you want for the next few years.”
Carr asks her clients why they want what they want in a home and helps them figure out the most important thing in their life. The hope is that they will realize that some traits, like commute time and enough space to raise a family, should be weighed more heavily than others, like countertop material or wall color, which while looking good, have no real impact on it how they will affect life.
“We’re trying to balance your expectations with your budget,” says Carr. This is a challenge in a city like Boston, where the average price of homes sold in December was $ 490,000. This is evident from several service data analyzed by Signal Real Estate. Plus, says Carr, it’s one of those strong seller market that many properties attract multiple offers.
One of the most important questions for first-time buyers is how willing they are to compromise on-site. For example, in many large cities, houses near the city are more expensive than houses in the suburbs. That means buyers have to decide how far they’re willing to move to get more space.
Most experts agree that when you buy a home you need to make sure that you can live in it for at least five years and possibly longer. The needs and desires of young singles or couples without children often differ from the needs and desires of families, in which schools and space play a greater role.
The PulteGroup, which is building new single-family homes and townhouses in the United States, sees two main types of first-time buyers. These new buyers want different things in starter homes, says James Zeumer, vice president of corporate communications.
Younger buyerswho may not have children usually want to be closer to urban areas and are willing to live in attached houses like a townhouse community. Families a little older are more interested in a single-family home with a yard and are willing to move further into the suburbs to get that, he says.
A National Association of Realtors survey of first-time home buyers between July 2013 and June 2014 found the average age of these buyers to be 31 years and the average size of homes purchased was 1,570 square feet. Of these buyers, 75 percent opted for a single-family home, 10 percent for a townhouse and 10 percent for a townhouse chose an apartment or cooperative. More than half, 54 percent, were married and 15 percent were unmarried couples. Unmarried women made up 18 percent of first-time buyers, single men 11 percent.
More importantly, 75 percent of first-time buyers said they compromised their home purchases, most commonly on size and price.
Lindsay Grandquest, a sales representative at Better Homes and Gardens Real Estate Generations in Mobile, Alabama, says many of her buyers want to keep costs down and are realistic about what they can afford. “After the economic crash, we learned to be very frugal,” says the 28-year-old Grandquest, noting that many of his peers saw their parents struggle with mortgages during the real estate bankruptcy. “We watched how they suffered and how it went down so quickly.”
In Mobile, first-time buyers can get a three-bedroom, two-bath home – the size most are looking for – for $ 90,000 to $ 125,000, and the seller traditionally pays the closing cost, virtually unknown in Boston.
According to Grandquest, their customers want modern appliances, fenced-in yards for pets, and a home that doesn’t need much renovation. “They live such a busy life that the last thing they want to do is tear up carpets on the weekends,” she says.
First-time buyers also like open floor plans, flexible rooms and lots of storage space, where everything is designed with technology in mind, says Zeumer. Families like spaces outside the kitchen where kids can do homework and still be seen by parents, as well as entrances with storage shelves, hooks, and cupboards. At Pulte, buyers choose their own entry-level brand options, and Zeumer says these buyers are very cost-conscious.
“You will be very thoughtful about the price,” he says. Most buyers want three bedrooms and two baths and choose homes between 1,000 and 1,400 square feet, he says. Popular improvements include wood or tile floors and improvements in the master bathroom and kitchen.
Here are five things to keep in mind as you prepare to buy a starter home:
Is it really a good idea to buy now? Take a look at your lifestyle, job, family situation, and budget to determine if this is the right time to lock yourself in a home for five to seven years.
Do you have enough money? Just looking at the mortgage payment gives you an incomplete picture, says Carr. “A lot of people go straight to the mortgage payment,” she says, noting that they can afford a payment that is equal to or slightly higher than their rent. “That is a gross simplification.” Be sure to Add up the additional costs property taxes, homeowner insurance, condominium or homeowner association fees, utilities, and maintenance. Every house, including a new one, needs repair and preventative maintenance.
Drill down and separate what you need from what you want. Before looking at homes, it’s a good idea to find out what tradeoffs you want to make. Place for space? A second bathroom for modern surfaces? A great neighborhood for your own garden?
Get a good one Home inspection. If you’re buying an existing home, like 88 percent of buyers in the realtor survey did, go with your home inspector and take notes. He or she will give you a great idea of how long the major components or your home are likely to last so that you can more easily plan replacements while you own them.
Know what is easy to change and what is not. First time buyers often have no experience Renovate housesAs a result, they fail to see what features and interfaces are easy and inexpensive to change and what is likely to become a major project. Real estate agents and home inspectors can provide insight into these topics, and you can also do your own research. Changing all of your carpet before moving in is usually not difficult and nowhere near as expensive as adding hardwood floors. New kitchen counters are much cheaper than new cabinets. Rewiring a house is expensive, but changing a light is not.