Although the barriers facing many first-time buyers are substantial, many who plan ahead and find a well-priced property can meet their goal. Here are a few pointers for buyers:
1 Scout out the best neighborhood you can afford.
Many who’ve felt trapped in a rental unit for years get very excited when they first start shopping for a place to buy. But it’s a mistake to let yourself fall in love with a particular house before you’ve scouted around to find the best one you can afford, says Michael S. Knight, a Chicago-area financial adviser.
To help with your due diligence, he says it’s wise to sit down for an informal chat with an agent who specializes in the sale of real estate in each community on your short list.
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Which neighborhoods are most likely to hold or gain value in the future? Ashley Richardson, an agent affiliated with the Council of Residential Specialists, says access to high-quality public schools is one critical factor.
In addition, she says buyers of all ages want to live in an area where they can easily walk to shops and restaurants.
One way is to visit a website that rates communities for their “walk scores.” Just go to www.walkscore.com and type in the address of a house in the neighborhood.
2 Look for a good deal from sellers who are highly motivated.
The biggest wave of recession-era foreclosures has passed. But in every market, there are still sellers who must move and are anxious to do so.
Richardson recommends that buyers searching for a good deal consider homes that have languished unsold for multiple months, usually because they were overpriced when they first hit the market.
You can also learn more by posing polite inquiries to neighbors living near the property.
“Stop by on a sunny Saturday or Sunday when you can chat with residents who are out in their yards. Tell them you admire their area and would like to know about for-sale properties there. If you’re friendly, most people will try to help you,” Richardson says.
3 Try to buy a house big enough to meet your needs for a lengthy period.
Before the last recession, many buyers were focused on “flipping,” the practice of buying properties in hope they’d appreciate quickly and could then be sold for a profit.
But many who tried this game failed, teaching others a cautionary lesson about how tough it is to make speculation work.
4 Make sure you stay within reasonable limits when shaping an offer.
Once you’ve pinpointed a solid neighborhood and found a dream property there, you may be ready to make a bid.
But Richardson says that before deciding how much to offer, you should obtain some facts and figures on recent sales in the area.
Ask your agent to give you statistics on homes that have sold recently – the fresher the data, the better.