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.
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:
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.
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.
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.
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.