“I have waited a lifetime
Spent my time so foolishly
But now that Ive found you
Together we’ll make history”
Open up the door, wont you open up the door?” – Foreigner – Feels like the first time
Nothing says generational change like the wave of first time home-buyers rifling through the nation’s bulging new and used home inventories looking for bargains. While baby boomers were still more likely to marry in their early 20s and move to the (still cheap) suburbs, Gen X and Y buyers are just starting to settle down in their late 20s and early 30s, just in time to take advantage of the bottom of the busted prices for homes.
Many of them have been patiently waiting, paying oversized rents all of these years and are looking to take advantage of the (ubiquitously advertised) $8,000 federal income tax credit.Just today, the FHA announced that borrowers who are eligible for the credit, who are using FHA loans, may apply the credit money up front, towards their closing costs, or to make additional down payments.Many renters delayed families rather than accept option arms, and for those who spent the days of dumb money saving as much of it as they can, this strategy is paying off in spades! These winners in the game of real estate roulette truly did triumph by standing on the sidelines. . .
The best and brightest new buyers are reaching out to trusted real estate professionals who are their age for referrals and advice.They are internet saavy and using sites like Trulia.com, Realtor.com, Zillow.com and of course CondoVultures.com to study the market and seek information, advice and listings. Most first time buyers begin shopping without trusted professional help and some run into the pitfalls associated with unscrupulous sales people, such as transaction brokers representing themselves while collecting double commissions or showings of homes.
I have seen buyers channeled to homes with illegal units or rooms in this scenario.Also, the agent representing both sides of a transaction has little incentive to obtain the lowest price for a buyer, many times claiming to have multiple offers which may or may not exist, while also possibly being able to refuse to present offers to the seller.
I recommend that all first time buyers request from the Real Estate professional that they represent your interests as a Single Agent and to provide a written Single Agent Notice for your records. This simple, 1 page notice engages the Real Estate agent’s services with not only exclusive representation, but also loyalty, confidentiality and obedience.If an agent refuses to act as a Single Agent, it’s a pretty good sign that they’re not committed to working for your benefit.
The next choice is not only how much home to buy, but what can you afford within the overall budget between down payment and the cost of repairs or improvements.The Miami-Dade County new construction market consists primarily of condominium units, many single family homes are therefore already existing, or have been rentals and/or foreclosures before hitting the market right now.Most single family home first timers are looking to get as much house for their buck as possible, in the best location possible.However, this raises the question of paying a higher price for move-in ready property, or a bargain basement price for distressed property.Properties with medium to high end finishes are still selling for a far higher fair market value than older existing homes with original appliances or the numerous homes where major fittings and appliances have been removed in the course of foreclosure or distress.
The concept of a starter house is an excellent idea for today’s new buyers, because they are getting the best prices at the low point in the economic cycle.I call this type of house hunt a “Value Buy”Real estate appreciation is something that happens more on a market level, rather than because of the improvement of any one house in a neighborhood.Typically, the people who spend a small fortune on improvements stay in their homes, while neighbors who spend less, move more often, but it’s those homes which set the market price.
Often times, the price of renovations is under-calculated at the outset, then the emotional decision to invest into a home kicks in, and homeowners plug thousands, though more often tens of thousands of dollars into improvements.In a normal market, improvements can be directly factored into home values, but after the period of excess, we’re in a period of deficit.Sadly, I’ve seen even experienced investors purchase property at distressed prices, shove low 6 figure sums into the property and re-appraise below purchase price! I personally recommend that first time buyers should look for homes that are move-in ready, that have upgrades or are otherwise whole and complete. How often do first time buyers take this advice, rarely.
Right now, it would be greatly to the advantage of first time buyers to take advantage of still low interest rates and make financially wise “Value Buy”. Remember to seek professional referrals from trusted sources to eliminate the simple traps in real estate sales.Request a Single Agent Notice from your realtor before you start shopping Look first at existing homes with move-in ready rooms waiting for inexpensive paint and molding improvements. Following these few simple tips can make your first time home buy into a first timer’s home run!