NEW YORK – July 28, 2017 – Competition for affordable entry-level homes in desirable neighborhoods remains intense, due to a shortage of available property. This has many first-time buyers very frustrated.
What’s worse is there’s no end in sight to the problem, says Svenja Gudell, the chief economist for Zillow, the real estate database company. “Simple demographic change is contributing to incredibly high demand, as millennials reach their prime home-buying years and begin to enter the market in droves,” Gudell says.
Competition among rival buyers is prompting some young home-buying hopefuls to consider properties they would otherwise have ruled out – like homes in rundown condition or those in neighborhoods not to their liking. But real estate experts fear this could one day lead to disappointment if they compromise too much.
“What’s the point of winning in a multiple bidding situation if you end up owning the wrong house? Errors in selection can be costly both emotionally and financially,” says Mark Nash, a longtime real estate broker and author of “1001 Tips for Buying & Selling a Home.”
Nash tells the story of one of his clients, a single man in his mid-30s, who bought a ranch-style house in the suburbs, against his inclinations.
The man was miserable with his choice. A property that would have been perfect for a family proved a poor pick for a man still on the dating circuit. Eating out, theater-going and sports bars had given way to home upkeep and garden weeding.
In despair, the bank manager phoned Nash, announcing his decision to sell the suburban house just two years after buying it.
Fortunately, the upswing in value on the suburban house allowed the bachelor to invest his equity in a condo-apartment back in the city. But he still regrets the two dull years he spent in the suburbs.
Nash urges novice buyers, or anyone considering a radical shift in housing style, to be especially cautious in selecting a property.
“Buyers operating outside their comfort zone can easily make a mistaken choice,” he says.
Here are a few pointers on finding the right property, despite competitive pressures:
Clear the air with family members about their expectations
Many novice purchasers, especially those in their 20s and early 30s, accept parental gifts to help realize their homeownership goal.
“Often, there are a lot of strings attached when the family steps in. There are big control issues, and parental influence can lead to bad decisions,” Nash says.
He’s noticed that some parents, eager to boast that their children live in a prestigious neighborhood, will encourage them to buy beyond their self-imposed limits, which can put pressure on their marriages.
Before you accept family help, you need to know if your parents think this gives them veto rights over your home choice, Nash asserts. “A heart-to-heart talk can really help you avert this problem before it arises,” he says.
Show your inquisitive side before choosing a property
Buying a home is much different from buying a car. New Honda CR-Vs, for example, are all basically alike – no matter where you buy one.
But each home is likely to have unique qualities. Even in brand-new subdivisions, floor plans and lot settings vary. And the disparities are still greater in older communities, where properties may have changed hands several times. Upkeep differs from owner to owner.
Of course, you’ll want to find a reputable home inspector to scrutinize any property you plan to buy. But even before you reach that stage, you should pose plenty of questions about the home and the community where it’s situated, says Merrill Ottwein, a real estate broker and past president of the National Association of Exclusive Buyer Agents.
“I always tell folks to walk the community before deciding whether you’d like to live there,” Ottwein says.
Local residents can forewarn you about the annoying freight trains that pass through or the jets with flight paths overhead. They can also tell you about unpleasant traffic problems and issues facing the local schools.
“Information is power, and that’s especially true when you’re selecting a home,” Ottwein says.
Don’t rush into property selection
Some longtime renters get so keyed up at the idea of homeownership that they rush into the wrong purchase, according to Nash.
“With all this excitement and newness around their plans, they stop thinking straight,” he says.
To help guard against the tendency to plunge headlong into a purchase – a temptation that’s especially strong in highly competitive markets – Nash suggests that first-time buyers look at multiple properties during a shopping tour, even if they fall in love with the first place they see.
“And don’t work with any agent who pressures you into thinking that every house you see is a ‘home run.’ Think for yourself when choosing a place,” he says.
© Copyright 2017 Breeze Publications Inc., Ellen James Martin All Rights Reserved.