14 West Hawaii Real Estate | July 20 2018
5 tips to help you find a starter home
First-time homebuyers might
well wonder: Where are all
the starter houses?
They’re right to ask because
starter homes are becoming increasingly
scarce in many housing markets.
Housing inventory is low and home
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prices are soaring.
What’s a first-time buyer to do?
Here are five tips for finding a
starter home:
1. Be realistic about today’s market
Sellers clearly have an advantage in
the current market. Inventory
is low, which keeps pushing
home prices to record
levels, according to the National
Association of Realtors.
Buyer competition is fierce as
homes in the lower-end price
ranges fly off the market.
Unfortunately, that leaves
many first-time buyers – especially
those with tight budgets
– on the sidelines. If you’re
searching for your first home,
be realistic about what you
can afford and what amenities
come with that budget. (Hint:
You may have to forgo top-ofthe
line appliances and shiny
quartz countertops.)
A starter home isn’t necessarily
your forever home.
Be prepared to make some
compromises to get your foot
in the homeownership door.
2. Adjust your wish list
Buyers shopping for their
first home need to be openminded
about the location,
size and condition of the
home they want to buy, says
Tim Deihl, associate broker
with Gibson Sotheby’s International
Realty in Boston.
For many buyers, a classic
starter home, which traditionally
doesn’t have many amenities,
is more achievable.
“If your first home is the
place you’re going to have
your family, maybe build an
addition and stay there forever;
that’s one set of criteria. If your
starter home will be a financial
launchpad into a larger, better
home, that’s a different approach,”
Deihl says.
Another strategy: Look
for an older home in a wellestablished
neighborhood.
Resales typically cost less than brandnew
homes, says Bradley Hunter,
chief economist for HomeAdvisor.
com, a home-improvement matching
service based in Golden, Colorado.
Older homes typically need more
maintenance and repairs, which offsets
some of the cost savings. However,
Hunter says, buyers who opt for a used
home might be able to do repairs and
renovations over time, pacing themselves
to make the cost manageable.
Other ways to entice sellers: Offer above asking price (if you can afford to), keep
repair requests to a minimum, make a larger down payment or give them more
time to move after closing.
3. Hire the right real estate agent
When you’re up against stiff competition,
working with an experienced
real estate agent who knows the local
market is key.
Look for an agent who specializes
in the neighborhoods you’re interested
in. Savvy agents should be able to
answer your questions about neighborhood
amenities, local schools,
crime and nearby home values.
A good buyer’s agent shines when
it comes to negotiating the deal and
writing a strong offer letter backed
with solid data. Your agent can suggest
certain strategies to win in a competitive
market, such as limiting contingencies
or writing a personal letter.
Ask friends and relatives to recommend
agents they have personally
used and were happy with. Also, interview
two or three different agents.
Find out how they prefer to communicate
with clients and how often
you’ll get updates. Finally, research
the agents you’re considering online
to see what past clients have said
about their work.
Find out more about how to find
the right real estate agent.
4. Rethink location
If you’re thinking about starting a
family in the future, don’t focus too
much on your home’s location, size
and school district just yet, Deihl says.
Resetting those parameters can make
it easier to buy a first home.
“Buyers may be in a position
where schools won’t impact them for
six or seven years,” Deihl says. “That’s
a good opportunity to buy in the city,
make some money and roll that into
a community where they want to be
longer term with the kids.”
Buyers who sacrifice location for
affordability can find themselves in
a neighborhood far from major job
centers with a long daily commute
and expensive transportation costs.
Sometimes that trade-off makes
sense, but not always, says Cathy
Coneway, a broker for Stanberry &
Associates Realtors in Austin, Texas.
“You have to look at how much
you make and how much you can afford
to spend for gas,” Coneway says.
“You might actually be better off buying
a house that’s closer to town so
you have more cash flow for property
taxes, insurance and living expenses.”
5. Make a strong offer
When a well-priced starter house
comes on the market, the quest to
buy it can be “super competitive,”
Deihl says.
One way to strengthen an offer is to
present a loan preapproval that includes
everything but a title search, appraisal
and hazard insurance, says Jay Dacey, a
mortgage broker at Metropolitan Financial
Mortgage Co. in Minneapolis.
A strategic phone call might
help, too.
“We call the listing agent and say,
‘Mr. and Mrs. Jones submitted an
offer on your property. Not only are
they preapproved, but they’ve gone
through the underwriting approval
process with our bank,’” Dacey says.
“That makes the offer stronger.”
Other ways to entice sellers: Offer
above asking price (if you can afford
to), keep repair requests to a minimum,
make a larger down payment
or give them more time to move
after closing.
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