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A starter home has historically referred to a home purchased by a first time buyer, that the buyer only plans to stay in for a specific period of time before upgrading to a more expensive home. As the median age of first time home buyers rises, the idea of a starter home is becoming less popular. More first time buyers are opting for a home that will meet their needs long term, not just for a few years. Regardless of whether you choose to buy a starter home or jump right into the market with your dream home, there are specific factors that should influence your search criteria. Here are four important categories that will help you know what to look for when buying a home, especially if you’re a first time home buyer.

Budget

This is arguably the most important factor to consider when looking for your first home. If you’ve already decided that buying is more beneficial than renting, the next step is to determine how much money you feel comfortable spending on a monthly basis. Keep in mind that those costs will not only include your pre-approved mortgage amount but also:

• Utility bills
• Home repairs
• Property taxes
• Homeowner’s insurance
• Furnishings
• and much more!

Set your budget in stone and get pre-approved for a mortgage before you start viewing homes on the market. Only look at homes that fit your pre-determined budget so that you don’t fall in love with a home that will place an unnecessary strain on your finances.

If you’re unhappy with the homes you are finding within your budget, and are unwilling to compromise, consider waiting to buy a home until you’re in a place financially to afford a home that meets both your needs and wants.

Size

As a first time home buyer, look for a home that is manageable for you. While it’s important to consider what kind of space requirements you’ll need in five or ten years, it’s more important to be able to easily afford and maintain your home in the present. The majority of homeowners will move multiple times throughout their lifetime, so it’s unrealistic to expect to find a home that will meet your unique needs for your entire life.If you are currently living in a less than 1,000 square foot apartment, a four-bedroom home that clocks in at over 2,000 sq. ft will be a dramatic change. More square footage may appeal to a buyer that is looking to start a family, or imagines hosting guests and dinner parties regularly. However, more square footage means more house to heat, cool, clean, furnish, and maintain. All of those elements will increase your monthly housing expenses.

If you’re single, consider a one or two-bedroom condominium. If you’re married but don’t have kids, look for a two or three-bedroom townhouse or single-family home. If you have multiple children and need extra space, then start to look for homes with greater than three bedrooms. The amount of space you need is dependent on your situation, so it’s important to analyze what your exact needs are before you go house shopping.

Another important size factor to consider is the size of your property, not just the home. If you’re inexperienced with landscaping and lawn maintenance and won’t look forward to spending your Saturdays in the yard, a smaller property with low-maintenance landscaping should be a priority.

Location

If you’re looking for a true starter home, then you’ll need to evaluate its resale potential.  Realtor.com found that homes located in stellar school districts sold faster and for higher prices than their counterparts. They sat on the market for an average of less than 80 days, and sold for an average of $330,000.Location has an incredible impact on not only the value of your home and its resale potential, but also on your lifestyle. Where you live will determine your daily commute to work, which schools your children will attend, and how close your preferred amenities are. As with all of these categories, which location you pick will depend on your specific preferences. If you have children, then schools will likely take top priority. If your lifestyle revolves around walking to all of your favorite amenities, you’ll likely want a property in the downtown area.

Tip from the experts:

If you want to know if your desired home is in a good neighborhood and that neighborhood is part of a Homeowner’s Association (HOA), then find out what the current rate of delinquencies on HOA dues are in the neighborhood. A high rate of delinquencies on these payments means that the neighborhood may not retain it’s value in the near future.

Condition and maintenance

Here are the renovations we recommend first time home buyers look for in a potential home:While you may have watched countless hours of HGTV renovation shows, be wary of tackling the real deal. Home repairs and renovations almost always take longer and cost more money than you plan for. Look for a house that has been well-maintained over the years, and only requires smaller renovation projects – like changing out ugly lighting fixtures or painting.

• Energy efficient upgrades, like new windows
• Updated electrical wiring and panels
• Newer roof
• Newer water heater

All of these upgrades cost a significant amount of money, and if they are already taken care of, you will not have to worry about them for many years. Instead you can focus on aesthetic upgrades like landscaping or granite countertops.

Before you close on a home, be sure to hire a home inspector to look over your new home and determine what issues it may have lurking beneath the surface. This will give you negotiating power on the price of the home if there are any major issues, and also a reliable to-do list of smaller updates to complete upon moving in.

Starting the search for your new home

Buying your first home can seem overwhelming, but luckily there are a large number of resources you can use to help guide you during the process. One of these resources is our First Time Homebuyer eGuide. This guide is FREE to download and covers every step of the home buying process, regardless of whether you’re looking for a starter home or your dream home. Read the guide today and you’ll be one step closer to starting the search for your new home on the right foot.