Everyone
loves a bargain. But in these days of the tight local real
estate market, a good deal can be increasingly difficult to come
by.
It's not uncommon for a house to go on the market and receive
several offers in the first few hours.
So how can you get the most for your money?
Bellingham RE/MAX Realtor Nancy Braam says there are many
ways to cut costs, but there are three points that are
particularly important for first-time homebuyers.
Roll up sleeves
First, save a little dough by paying with sweat. "Be
ready to do some work," said Braam. "Be able to
overlook shag carpet, old wallpaper, or a yard that has turned
into a jungle."
Commit to doing much of work yourself and make improvements
over time. You'll be surprised how much you can accomplish with
a library card and a set of basic tools.
It's important for first-time buyers to remember that they
aren't buying their dream home the first time around; they're
buying an entry into the housing market.
"This first home is a stepping stone," said Braam.
"The main factor to keep in mind is resale."
Buyers wants a home that will help them build an investment
base into something nicer in a few years.
There are a number of imperative rules for smart home buying
from an investment standpoint.
The most important? Location, location, location. It's every
Realtor's adage - and for good reason.
Location has the greatest effect on your house-buying
investment - it's important to the resale value of your home and
your family's security.
"Buying the worst house in a good neighborhood is a
time-tested investment strategy," said Braam.
You should also look for a house with a workable floor plan
that will be an asset when it comes time to sell. If a two-story
home has only one bathroom located on the first floor, off the
kitchen, future potential occupants aren't going to be
interested in lengthy moonlight treks for bathroom breaks.
Buy a house that is structurally sound. A full, professional
inspection is the best $300 you can spend when investing in your
first home. "And they shouldn't necessarily shy away from a
house where the inspection brings a big ticket item to
light," said Braam. "Many times the whole or a
sizeable amount of repair or replacement can be negotiated. If
they can negotiate half the cost of a new roof - that might be
as good as money in their pocket."
Look past cosmetic fixes and you might just find yourself the
owner of a perfect starter home purchased at a
pocketbook-pleasing price.
But Braam cautions that you can't buy only for investment.
"They should actually like the house," she said.
"We don't want them hating to come home for the next three
years."
Learn the market
A second way to stretch your house-buying dollar is to learn
what's out there and what kind of prices properties bring.
"First-time homebuyers should take the time to educate
themselves on the market," said Braam.
Currently, in our relatively fast market, buyers likely have
little time to make a decision. There's often a line forming
behind them of other bidders.
Don't put yourself in the position to take someone else's
word on the value of a house. Know what's available in the
community and what the prices are.
Braam recommends a "marathon" day, where a buyer
looks at as many properties as possible that fall in their
general price range. "These don't have to be ideal
homes," she said. "This is a fact-finding
mission."
Don't be overwhelmed by the thought of never-ending homework
that harkens back to school days. There's no need to spend
months on research. "It really is amazing how much
information can be gathered in a day or two of intensive
home-looking," Braam reassured.
Once you've got a little experience under your belt, you'll
know if the price is right when you see the house you want. Do
the background work so that you can trust your intuition when it
kicks in.
Timing
And finally, timing is key for getting the most for your
money.
With interest rates at their lowest levels in decades,
first-time homebuyers can borrow more money than ever and buy
more house than they could before.
Worried about credit problems or no down payment? First-time
homebuyer programs abound.
"I've had a number of first-time homebuyers who have
come to the closing table with under $1,800 total cash,"
said Braam. " And they can even borrow that. The timing has
never been better to buy a home."
Braam suggests calling lenders to see how much of a loan you
can qualify for. You might just be surprised. Many people
decide, for whatever reason, that they can't buy a home. But
more often than not there are ways to make it happen. And the
monetary advantages of being a homeowner - namely tax breaks and
investment potential - almost always vastly outweigh those of
renting.
There has truly never been a better time to ditch the
landlord and become a homeowner. By using a little elbow grease,
learning the ins and outs of our local real estate market, and
taking advantage of fantastically low interest rates, you'll be
able to stretch your home buying dollar far enough to find
yourself living the American dream of homeownership.
