First Time Home Buyers Smart Strategies

Assure that your first time home buying experience is a good one. Use the same strategies that professional investors use to your advantage. Don’t let your first home purchase turn into a nightmare.

We are going to discuss a few points that will protect you now and into the future. First, it is very important that you put location above price. Why? Because unless you are one of the rarest of the rare, you will be selling that home within the next few years. Pros don’t buy to lose money.

Buy to Sell?

First time homes are also called starter homes because as income and family size increases, people move from that first home into homes are larger size. In the excitement of buying the first home, selling the home is not a prime consideration. It needs to be. You will be selling that home and the goal should be to buy a home that will appreciate in value so that you have more equity to put into your new home and cover the cost of selling. It might seem weird, but when buying that first home, buy to sell!

Two Rules of Buying for Appreciation

Rule 1 - buy where homes are appreciating. Rule 2 - always remember rule 1. Given the choice, buy less home in an area that is appreciating than more home in an area that is appreciating slowly or not at all. Buying a town home in a fast appreciating popular area is better than buying a single family larger home in an area that is rundown and not appreciating. Daytona Beach Homes for Sale appreciation has not been uniform and after the bubble burst, prices did not fall the same in all areas. Ask your real estate agent for appreciation numbers for the area. If the area is appreciating at 5% a year, then buy in an area that is appreciating faster, not slower. Buy in the fastest appreciating area that you can afford. Pros buy where they can get the fastest appreciation.

Negotiate!

Everybody involved in the purchase of your new home will have more experience negotiating than the first time home buyer. Ask your real estate agent how much inventory in months is on the market in your area. If it’s more than six months, it’s a buyer’s market and you will have more room to negotiate. Less than six months means more competition and possibly less room to negotiate, but this doesn’t mean you shouldn’t do it anyway. In the Daytona Beach Real Estate Market, home inventories are at 44 months and the average home sold is at 10% off the listing price. You can negotiate:

• Price
• Repairs
• Appliances
• Fixtures
• Furniture
• Lawn Mowers
• Sellers contribution to your closing costs

Professional investors will discount the offer price by needed repairs or required replacements like carpet, air conditioners, or anything else that they can use. Make any contract you offer contingent on a home inspection. If the inspection reveals items that need attention, replacement or repair, negotiate the repairs or a reduction in price. Also, get pre-qualified for a mortgage. You are in a much better position to negotiate if you do.

Add Sweat Equity

If you get a price reduction for repairs and replacements, and you can make the repairs yourself, do it. You are adding sweat equity that you will be able to cash out later when you sell. Yes, pros work to get reductions that are greater than the repairs will cost.

Use Assistance Programs

Many communities have first time home buyer programs that offer down payment assistance, loan guarantees and other benefits for first time buyers. A professional investor will use everything that they can. If a government agency is giving grants, they will take advantage of it. Your real estate agent should be able to point you to these programs.

Get the Right Real Estate Agent

Finally, you should find a real estate agent that is willing to explain everything that is happening during the process. If the agent doesn’t have the patience or desire to tell you what’s going on, get a new agent. You are the customer and deserve the necessary attention to make you feel comfortable with the process. The agent you select should be familiar with first time home buyers programs so that you can take advantage of all benefits available to you. As a Daytona Beach real estate agent, I’ve worked with many first time buyers and can help if you are in our market. I’ve also worked with professional investors and can offer you guidance in getting the best possible deal.

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