If buying a home is on your to-do list, you’re not alone: Eighty-three percent of young people still believe homeownership is part of the American Dream, and 78 percent believe they can achieve it.
But while exciting, the process of purchasing a first home is fraught with potential pitfalls—some costlier than others.
Here, Alison Rogers, a licensed broker at Upstairs Realty in N.Y., weighs in on some of the highs and lows of five first-time home buyers’ experiences. From hidden home-repair nightmares to the benefits of putting down more than 20 percent, you may want to read this before you start house hunting.
The All-Star Savers
Tanner, 32, and Ashley Callais, 33, a travel site owner and interior design assistant in Austin, Texas
“We bought our first home—a three-bedroom in Austin—last March for about $300,000. We’d been longtime renters, but learning our first baby was on the way lit a fire under us to put down roots.
We each had a healthy savings account when we got married in 2012. Since then, we’ve been all-star savers. There have been periods where we’ve saved 70 percent of our low-six-figure (combined) income—thanks to avoiding debt and sticking with a strict budget. (Even after my career took off, I drove the same old Saturn from college so we could save more.) This helped us put down 30 percent on our new home.
Our monthly payment now lands at $1,400 including taxes, compared to $1,050 in rent for a much smaller place. It’s also way nicer than our old digs and in the heart of an up-and-coming neighborhood.
My one regret is not being more aggressive with bidding. Austin is a very competitive housing market; it isn’t uncommon for properties in our price range to go under contract within days. We actually lost several houses we really liked because we weren’t comfortable bidding more than asking price, which ended up lengthening our house hunt by several months.”
Expert insights: “Tanner and Ashley did a lot right—particularly putting down such a hefty down payment. Doing so lowers your mortgage payments, which means you’ll have more available income for unexpected expenses.
When it comes to bidding, I’d tell stressed-out house hunters to repeat this mantra: ‘It’s ok to lose a house; there’s always another.’ You don’t want to get so caught up in the bidding that you drive yourself to a number you regret. I suggest researching what similar houses are going for in the area, then looking at your budget and determining your top number. This gives you a built-in boundary.”
May 5, 2017
May 5, 2017
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