This series grew from a post on our blog titled "First Time Home Buyer Guide: Steps to Buying a House."
First Time Home Buying Strategy
Before you start looking, it may help to clarify your intentions for buying. This costs nothing and will help you determine what features to look for in a house and see what you can get for your money. This is a great place to start if you are trying to wrap your mind around all the steps to buying a house.
Must-Haves vs. Nice-to-Haves
You may have already dreamed up your perfect home. Great! Make your list and allow yourself to visualize exactly what this looks like. Then go through your list and identify the difference between your must-haves and your nice-to-haves. Is number of bathrooms important? Are you dead-set on a wood fireplace? Do you need plenty of storage? How important is proximity to work or the outdoors? Do you prefer to live in a happening neighborhood or on a quiet cul-de-sac? You may find your dream home is available and make an offer right away. Or you may realize that for now a starter home is wisest. Come up with your strategy for this home and how that fits into your longer term plan.
Long Term Strategies:
Consider these possible approaches - does one of them fit your circumstance right now?
With all the real estate shows on DIY and HGTV, it's no wonder so many first time buyers feel pressure to get into their dream homes on the first try. The truth is that most families who live in fancy homes with granite every-tops and nine car garages worked their ways into those by buying a smaller home, earning some equity, using the equity to buy a fancier place later, and so on. Your starter home will have enough of your “must-haves” that you would be happy to live there for now. In a few years, if your income is higher, you will be in a position to qualify for a higher loan amount. You may choose to spruce it up or put in some sweat equity that will help you sell it at a higher price than what you put into it. Plus, you will have been building equity in your home every month by making mortgage payments. Your home may appreciate in value over time just based on market trends.
Rental to be:
Others buy a place with the intention of renting it to someone else in order to bring in an extra stream of income. Is this strategy a good idea for you? If you're thinking about it, you might stop over at smartasset where Thierry Godard recently wrote about making your first home an investment property.
Some considerations: How long will you live in the house to fix it up and prepare to turn it into a rental? Do you plan to turn it into a vacation or long term rental? Perhaps the FHA loan perks aren’t essential in your case, and you don’t plan to live in the unit at all. Talk to your REALTOR about your goals when looking at this kind of purchase so we can help identify properties that will lend themselves well to your investment.
Maybe you hate to move and plan to go through the process of buying a home only once in your lifetime. You have enough saved up that you are confident you can get most of your “must haves” and enough “nice to haves” as well. If this is you, your forever home might pop up right away or you may choose to take your time really hunting.
Some people find that doing a bit of shopping helps them with the strategy points above. We can show you homes for sale in the Anchorage area to get you started! Call us today.
As for the strategy of our first time home buyer, Dustin, he had spent some time searching and tried to buy a house a couple years back. That didn’t work out, so he kept his eye on the market and waited until his perfect home popped up. Here is a video of him from the day he saw the place. He was immediately inspired to call us and write up an offer!
Ready to start shopping for a starter home, future rental, or your forever home in Anchorage? Call us at (907) 242-9282 to get started, or download our home search app!