- The 10 Things Every Millennial Needs To Know Before Buying A First Home
- 1. Hire a Professional Realtor
- 2. Look Realistically At Your Budget
- 3. Prioritize Your Wish List
- 4. Focus on Location
- 5. Don’t Sweat The Small Stuff
- 6. Go In With Your Best Offer
- 7. Gather All Your Inspection Information
- 8. Keep A Level Head When Negotiating
- 9. Don’t Tackle Every Improvement At Once
- 10. Aim For Resale Value
- Why the younger Gen Z has an edge over millennials in the housing market
- Key takeaways from the study
- Differences between Generation Z and millennials over housing
- What makes Generation Z so special?
The 10 Things Every Millennial Needs To Know Before Buying A First Home
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Right now, millennials might have a reputation of crazy twenty-somethings not quite ready to settle down. But, a recent report by the Joint Center for Housing Studies of Harvard University found that “the number of households in their 30s should increase by 2.7 million over the next decade.” Ready or not, the millennial boom is coming.
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Whether you count yourself in that demographic or are just a first time homebuyer. There are some topics in the buying process that are essential to know before taking the plunge.
We’ve compiled a list of the ten most important things that everyone new to the housing market needs to know. Look them over and keep them in mind as you start your housing search. You only buy your first home once, so let us help you make it count.
1. Hire a Professional Realtor
Let’s all admit it. Real estate agents often get a bad rap as swindlers. It’s because of that stigma – and the thought of saving a few dollars – that keeps many people from using them. However, listening to the hype may cost you more in the long run.
Your first time in the real estate market can get confusing. There’s lots of legal negotiation and large sums of money are often involved. There is no reason to add on the stress of having to navigate through the transaction alone, especially since if you decide to go it alone. Hire a professional to assist you.
A qualified professional can help you sort through the industry terms that make up the majority of contracts and inspection reports. They do the leg work of setting up showings and act as your advocate during the transaction so that you’re free to focus on preparing for your move. In the middle of all that craziness, you’ll appreciate the extra assistance.
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2. Look Realistically At Your Budget
Your budget is the first thing that you need to look at when getting ready to buy a home. After all, it determines which properties you see and you don’t want to find yourself in a situation where you miss out on the perfect house because you’re not sure how much you can spend. Or, worse yet, find yourself falling in love with a dream home you can’t afford.
Budgeting is the way to make sure that you only look at houses that you can feasibly and comfortably. Doing so will help you save time and help you get into your new property much faster.
Sit down and budget your income versus expenses. Try to settle on two amounts: One figure that shows the amount you’d be comfortable spending monthly and another that shows your absolute maximum. You can use a budget calculator to help, if necessary.
3. Prioritize Your Wish List
We all have a wish list for our for our future dream homes. Whether it’s a gourmet kitchen or fabulous outdoor pool setup, odds are you know what you want and exactly how it should look. We’re happy to tell you that can take some your wish list with you when looking at properties, just not all of it.
When it comes to looking at real estate and especially when you are looking at starter homes, prioritization is key. You may not get every item on your list, but if you narrow it down to the features you absolutely need, you’ll ly end up happy with the result.
So make two lists. One with items that are absolutely necessary the number of – bedrooms and bathrooms in a home – and another for nonessential items that would make you happy to have in a home. Focus on finding properties that check off all of the items on your first list and think of items on the second list as added benefits.
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4. Focus on Location
As for what should top your wish list, location is absolutely key. If you think about it, it is the one feature of your new home that absolutely will not change. Since you’re unable to alter it in any way, take the time to make sure that it will suit your needs for many years to come.
Before putting an offer in on a property, do your homework. Map out how long it will take you to get to work or school. Check the proximity to all essential spots grocery stores and pharmacies. Make sure you’re happy with the amount of nightlife in the area.
It may be a good idea to have a few target areas in mind before meeting with your real estate agent. That way, he or she will be able to target your home search to properties that fit your needs.
5. Don’t Sweat The Small Stuff
Once you’re finally get to start the showing process, it’s exciting and overwhelming. You’ll be seeing a lot of houses rather quickly. Sometimes it can be hard to separate one property from the other and to pick out the features you the most.
In an effort to keep everything straight, many first time buyers have a tendency to identify properties by focusing on the small details – a wallpapered dining room or some vinyl flooring in the kitchen. But, continually focusing on the small details can hurt in the long run, if you decide not to move forward on a house because of them.
Instead, every once in a while, try to force yourself to take a step back and look at the bigger picture. Is the house structurally sound? Does it require any monumental repairs? As long as those things are okay, small details wallpaper can be fixed later down the road.
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6. Go In With Your Best Offer
Real estate is one of the few areas where sale price is still up for negotiation. Unfortunately, this means that many people, especially those first-time homebuyers who may be working on a lower budget, go in to the buying process with the mindset that they can try and score a deal on their new property.
However, by doing so you may actually be setting yourself up for disappointment. If their is another offer on the table, submitting an offer that is far below the sale price will almost certainly put you the running. Even if there is no other competition for the property, a super low offer may insult the sellers and they could decide to reject it as a result.
When you’re thinking of what price you’d to put forward, ask yourself how you would feel if you received the same. If you would turn your nose up at an identical offering, consider going in a little higher.
This particular piece of advice comes with one caveat. If you absolutely love the property, go in with your best foot forward. However, if you feel lukewarm about the house, feel free to try and score a deal.
7. Gather All Your Inspection Information
It’s true. Home inspections are optional. Some people choose to skip them to avoid paying the upfront costs. However, especially when it’s your first time buying a home, we do not recommend skipping them. In fact, we suggest you gather as much inspection information as possible.
This is because inspections can often reveal hidden issues expensive repairs. Plus, since buyers are still able to walk away from the transaction during their inspection timeframe, if you find that the repairs are too much to handle, you will be able to move on to another home that better suits your needs.
However, if you opt your inspections, you are essentially agreeing to take the home in its current condition, whatever that may be. If you happen to find a major issue later down the road, it will be your responsibility. Whenever possible, get the information upfront.
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8. Keep A Level Head When Negotiating
Once you’re under contract and headed to the settlement table, every decision becomes a negotiation – who will shoulder the cost of repairs, what items will get left behind, even when settlement will be. The best thing that you can do in these situations is to work at keeping a level head.
It can be easy to get over invested in getting your way, particularly when making a decision that you are truly passionate about. But, remember that successful negotiations work on a system of give-and-take.
Stand your ground when you believe that you have a cause and try to do so in a polite and respectful manner. However, don’t underestimate the power of striking a compromise or ever conceding on issues that aren’t so important to you. You never know when that act of good will may be returned by the sellers.
9. Don’t Tackle Every Improvement At Once
This is the biggest mistake that many new homeowners make. While it’s sounds a great idea to get all of the annoying construction the way at one time, taking on too many improvements at one time is a sure way to become overwhelmed with your new home before you’ve even truly had a chance to unpack.
Instead, only focus on the repairs that are absolutely necessary to make your home livable. Then, live in the space for a few months before taking on any cosmetic fixes. Living in your home may open your eyes to better repair scenarios than you had originally envisioned.
Then, when it’s time to tackle those upgrades, take on one project at a time. Remember, presumably you’ll be living for at least the next few years, so you have time to make your mark.
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10. Aim For Resale Value
Let’s be honest for a second: It’s very unly that your first home will end up being the home you live in until you become old and gray. In a few years, you may need to relocate for a job or your family may grow.
That’s why when buying your first home you should focus on resale value. While it’s obviously important to find a home that you love, you should also focus on finding one that will appeal to others, if you need to sell it in the future.
As for what counts as resale value, think about things that appeal to the younger generation – first-time homebuyers. Things proximity to shops and restaurants, curb appeal, and neutral upgrades tend to have mass appeal.
Buying your first home is exciting, nerve-racking, and downright terrifying all in one. It’s a once-in-a-lifetime experience and we are here for you every step of the way.
We’ve compiled a list of all the thing’s that millennals – and those who love them need to know before entering the housing market. Keep them in mind as you search for your first home and beyond.
After all, you never outgrow good advice.
Millennials, what questions do you have about the housing market? What are you looking for in a home? Let us know in the comments below.
Why the younger Gen Z has an edge over millennials in the housing market
Generation Z is a huge part of the U.S. economy. This is the generation that comes after millennials, born between 1995 and 2005. Although still quite young, Generation Z is already contributing up to $44 billion each year to the U.S. economy.
A study by Property Shark shows that Generation Z, also known as iGen or the Instagram Generation, is more optimistic about owning a home. Many are even planning to buy houses within the next five years. According to findings, at least four five interviewees plan on buying homes in the next five years despite their massive student debt.
Generation Z is more optimistic about buying homes than millennials. Millennials aspire to own a 1,883 square-foot home. In reality though, they can only afford something around 812 square feet. On the other hand, Generation Z aspires to own a 2,081 square foot home. What they can really afford is around 803 square feet.
Most of the iGen respondents said that they were not willing to compromise on the square footage they get when they buy a house. This could be because Gen Z grew up in bigger houses than their predecessors, and very few of them ever had to share a room.
Also see: 3 things you can learn from Gen Z about online dating
The encouraging thing about this study is that these young adults are not all talk. The study shows that at least 100,000 of iGen members already own property despite being so young.
Key takeaways from the study
The study covered more than the home purchasing habits of the Instagram Generation. It shed light on a few things about previous generations as well:
- Generation X is more ly to choose intergenerational living patterns and to care for relatives from other older generations.
- Generation Z will compromise on almost anything as long as it cuts costs. Space however is extremely important so they are less ly to compromise on this when buying a house.
- Generation Z is a threat to millennials in the real-estate market so they are poised to present competition for good housing.
So, what exactly is driving this stiff competition from the younger Generation Z?
Differences between Generation Z and millennials over housing
We see that Generation Z is willing to compromise on most things except space. But what is it about this generation that makes them so eager to buy homes?
- They don’t care that much about amenities: Generation Z’s only major concern is space. They are willing to give up almost anything else including access to parks or a yard, and even a shorter commute.
- They are OK with buying a fixer-upper: this is probably one of the main reasons why many of these young adults are buying houses. The study shows Generation Z is more willing to take on fixer-uppers that sell for a lot less. The study also showed that almost half of all Generation Z home buyers make less than a $10,000 down payment.
- They saved for less than five years before buying their homes: 93% of the respondents who already owned homes said that they saved for less than five years to make their down payments. A possible explanation for this unprecedented speed is that this generation tends to gravitate more toward cheaper homes than millennials. That makes it easier for them to save faster for the lower down payments required. Additionally, they get a lot of help from their parents with these down payments.
- They buy homes despite student loan debt: the burden presented by student loan debt seems to be a multigenerational problem. The iGen and millennial generations cited it as a major hindrance to their home buying ambitions. Generation Z, however, is more willing to take on both burdens at the same time.
The survey also shows that most people want to own homes. The problem is that there are several stumbling blocks. These obstacles come in the form of heavy loans, credit card debt, and hefty down payments. These obstacles keep most members of these generations locked into the rental market for much longer than they would .
Read: Why so many property listings advertised as ‘bargains’ sell above the asking price
This issue particularly affects millennials. The study shows that half of millennials (born between 1980 and 1994), are still renting.
On a brighter note, most Americans remain optimistic about their prospects of owning a home in the near future. Almost 80% of the respondents said they expect to buy a house within the next five years (this include respondents from Gen X to Gen Z).
What makes Generation Z so special?
Several key factors make Generation Z members stand out:
- They are more ly to have several sources of income because of the rising gig economy.
- They are early starters. This means they are more ly to go straight into the workforce at the age of 16.
- They are more entrepreneurial, meaning they are more ly to make the money they need quicker.
- They are more ly to look into more affordable housing markets.
Generation Z is far more optimistic than their counterparts so they have higher expectations than millennials. This generation is more open to taking chances than their predecessors, giving them an edge in the housing market.