Prospective first-time home buyers 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 buyers must find a balance between what they can comfortably afford and what they want in their first home.
Know Your Market
Before you decide on a particular home type or a specific neighborhood, you need to get an idea of the price range of homes in your area.
Most buyers begin their search for a home online and then contact a REALTOR who can help them focus their priorities. Many buyers 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 REALTOR 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 subway and yet gives 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 four-bedroom, single-family home with a two-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 home buyers 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 your 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.
You and your REALTOR 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 buyers 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 be a bargain. First-time home 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 are buying a home, but it’s even more important when the home has not been upgraded or maintained. A home inspector can help you estimate the cost of repairs. One option, if you lack the cash for home improvement projects, is an FHA 203(k) loan that allows you to wrap your repair costs into your mortgage.
An open mind and a broader search can yield a more affordable option for first-time home buyers.Feel free to call us for inquiries at 281-376-0009.