First-Time Buyers More Willing to Compromise

When it comes to space and upgrades, first-time home buyers are more willing to compromise than repeat buyers, according to the National Association of REALTORS®’ 2011 “Profile of Home Buyers and Sellers.”

While they have big wish lists too, first-time buyers seem to be most driven by finding a home that offers a reasonable monthly mortgage payment.

“Single home buyers tend to value affordability above all when they are choosing a home and a neighborhood,” says Jessica Lautz, NAR’s manager of member and consumer survey research. “They also focus more on living some place convenient to friends and family, as well as entertainment and leisure activities.”

The median age of first-time home buyers is 31, and about 26 percent are married with children.

First-time home buyers tend to rate energy efficiency high on their wish list, as well as simple, no-hassle technology use in their house, the study finds.

But “even if they like the idea of solar panels, first-time buyers are not likely to spend an extra $20,000 to have them,” says Stephen Melman, director of economic services for economics and housing policy for the National Association of Home Builders.

First-time buyers also are willing to compromise on space: The median-size of a home purchased by a first-time buyer is 1,570 square feet.

Overall, “the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room,” says Melman. “First-time buyers want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and with a smaller master bedroom and a smaller walk-in closet.”

But one thing first-time buyers aren’t as willing to compromise on: Buying a home that needs a lot of repairs.

“Buyers that don’t have any experience with home maintenance tend to be afraid of renovations, so home sellers should be sure to fix everything they can and make minor home improvements in order to appeal to first-time buyers,” Melman says.

Source: “Size Matters Most to First-time Buyers,” HSH.com and Fox Business News (Jan. 26, 2012)

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Where Did All the First-time Buyers Go?

In January, first-time home buyers made up 29 percent of the market, the lowest since the National Association of REALTORS® started tracking first-time buyers on a monthly basis in 2008.

In a healthy market, first-time buyers generally make up 40 percent to 45 percent of all purchasers. So with low interest rates and falling housing prices, why are first-time home buyers sitting on the sidelines?

A USA Today article highlighted some of the factors that have first-time home buyers skittish about the market:

Tougher lending standards: Some first-timer buyers can’t meet credit or employment history requirements, Guy Cecala, publisher of Inside Mortgage Finance, told USA Today. Lenders also are requiring higher credit scores and some want higher down payments that are shutting out more first-timers. The best loan terms usually require 20 percent down payment or more, says Greg McBride, senior analyst at Bankrate.com.

Expired tax credits: Federal incentives that included lures for first-time buyers gave a big boost to home sales in 2009 and 2010. But with those tax credits now expired, first-time buyers aren’t as eager to jump in to the housing market.

Competition from cash buyers: NAR reports that cash buyers accounted for a record-reaching 33 percent of existing-home sales in February. Sellers like cash deals because those transactions are more likely to close, says Jerry Abbott of Grupe Real Estate in Stockton, Calif. As such, competing against these cash buyers has left some first-time home buyers out.

Source: “First-time Home Buyers Getting Shut Out,” USA Today (March 28, 2011)

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How to Beat the Tax Credit Deadline

How to Beat the Tax Credit Deadline
It’s not too late for a determined first-time home buyer to take advantage of the $8,000 federal tax credit, which expires Nov. 30.

Scott Voak, a San Diego practitioner specializing in first-time buyers, helps potential buyers target homes that can close quickly. To identify those properties without touring them, contact the listing agent with blunt but important questions that aren’t likely addressed in the listing.

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Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.

How to Beat the Tax Credit Deadline

How to Beat the Tax Credit Deadline
It’s not too late for a determined first-time home buyer to take advantage of the $8,000 federal tax credit, which expires Nov. 30.

Scott Voak, a San Diego practitioner specializing in first-time buyers, helps potential buyers target homes that can close quickly. To identify those properties without touring them, contact the listing agent with blunt but important questions that aren’t likely addressed in the listing. These can include:

* Is there mold?
* A need for extensive repairs?
* Aging systems or appliances?
* Troublesome neighbors?

Buyers should factor in these questions before making an offer:

* How long has the property been on the market?
* Have there been any price reductions?
* Are there any offers written on the property?
* Do the home owners need to move by a specific date?

Other recommendations include:

* Provide buyers with as much information about financing as they need and that you can offer.
* Encourage buyers to begin the process right away.
* Make sure buyers are aware of who is responsible for closing costs since state requirements vary.

Source: Move.com, Scott Voak

Front Gate Properties, We’re selling the BEST Real Estate in Aiken, SC.