Finding that Elusive Starter Home
The past few years have brought several changes in the real estate industry. The housing bust of 2006-08 led many people to either sell or walk away from their home. As the market is continuing to rebound, many investors have scooped up homes at affordable prices and are offering them as rental properties. In addition, other investors have bought homes at discounted prices with the sole intention of selling them at near-full value for a profit. So the question remains; how does a first time homebuyer find an affordable starter home?
Consider a Different Location
Too many times a young person or couple will buy a home in hopes of expanding their family. That leads to choosing a home that is convenient to good schools, nearby shopping and plenty of entertainment activities. However, for people that may be a few years away from starting a family, the location should be different. Buying a home within the city limits, for example, where the owners can be extremely close to work, could be a better fit.
Consider an Older Property
Younger people often get caught up in the dream of buying a new home and settling in with the smell of fresh paint and recently rolled carpet. However, new homes usually have a much higher price than older homes.
While it is true that an older home may either need a bit of repair before purchase or more maintenance compared to a newer home, the savings in purchase price can often offset the repairs and maintenance expense. In addition, young ambitious people may be able to tackle some, or all, of the maintenance and repairs on their own which can save them more money in the long run.
Tone Down Expectations
A starter home is simply a way for most people to get experience with the entire home buying process. This means that potential buyers should look at the home as a learning experience. Most individuals can get by with far fewer amenities than what they are accustomed to. Or, instead of giving up nice amenities, it is possible to buy a much smaller home and save up for a bigger home in the future.
Have Financing in Order
Since there seems to be a bit of competition for starter homes it is wise to have the financing in place before looking for a home. Putting an offer on a home with a firm pre-approval letter from a local mortgage lender will make the whole process smoother and give you a better chance of getting your offer accepted.
It may take some time, but with a little patience and realistic expectations a qualified borrower can find that starter home that will set them on the path to achieving their financial dreams.
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