I am buying my first home, and am nervous about making the right decision. It is a buyer's market in my area, partly due to a huge amount of new construction. Prices are falling, which is great. Because I am a first time buyer, I cannot afford to buy as much house as I would like. How can I make sure I buy something which I can resell in about 5 years?
How can I make sure I buy something which I can resell in about 5 years? Unfortunately, there are no guarantees in life. But you can increase your odds by buying at the bottom of the market, which it sounds like you're planning to do. There will be always be an influx of new buyers to the marketplace who need a place to start, which is why entry-level housing tends to hold up well. But there's no guarantee prices won't take a dip now and then; however, you will likely be able to sell a starter home much easier and faster than a move-up home if and when, I should say, that happens.Everybody is nervous about making the right decision. I work with a lot of first-time homebuyers, and without exception, almost everyone of them have second thoughts and feel anxious. It's a huge step to make, but I tell you this, once you make it, you will look back at your anxiety and chuckle, wondering to yourself why in the world you felt so nervous when it was so easy. But that's hindsight for ya!Find yourself a good Realtor, somebody with plenty of experience working with first-time homebuyers, and she will help guide you through the process so it doesn't sting so much first time out. I literally drag a first-time homebuyer kicking and screaming to the closing table at least once every couple months. They're always grateful afterward, but man, some of them get they toe stuck in the threshhold and I have to push them over it at times. Good luck!elizabeth
Here are a couple pointers that I learned when I bought my home this past summer. Over time, land will typically appreciate in value, but the actual house will typically depreciate. You mentioned that there is a ton of new construction. Here is one thing to think about. Would you have a brand new house or a 5 yr old home that are identical in size, amenities, etc if they are the same price? I'd stay away from cookie cutter homes in areas with lots of new development because these homes are a dime a dozen and are essentially a commodity. Unless the home is in a prime location compared to the others, the only reason someone would want to buy your used home over another used home or a new one is it is cheaper. If vacant land for developers is still plentiful, you probably won't see much appreciation in the land value and your house will probably depreciate and 5 yrs from now it may be worth less than what you paid for it.If you can find homes in a well established neighborhood, there usually isn't an abundance of land so you don't have to worry about trying to sell your cookie cutter house when there are another 15 brand new ones on the market nearby. In my area, most of the new subdivisions don't have mature trees. All the trees are cleared adn then some young trees may be transplanted. Trees and parks tend to help keep property values higher.If you end up going with one of the new construction homes, you probably don't want something that is dramatically different than everything else. For example, say you have hardwood floors, granite countertops, oak cabinets and marble tiling in the bathrooms and entryways and every other house has carpeting, pre-fabricated white cabinets and plain jane tiling. Your house will probably be significantly more expensive than the other homes with the same approximate square footage. If most homes don't have these amenities, then most buyers won't want to pay extra for them and your house will be too expensive compared to other houses of the same size.
You have received some very good points from other posters. My only addition to their comments would be to look at the general economic conditions of the area you are looking to buy...with specific focus on the job growth & income growth components.Housing prices are very dependent on the ability of people to pay. This in turn is very dependent on the person having an income...and so on. If your 5-year timeframe indicates improved economic conditions in your area, it is likely (but not guaranteed) home prices will appreciate at or above the rate of inflation. If the projected economic condition trend line is flat then home price apprecition will more than likely also be flat. This is why it is also important to look at both job growth and income growth. In some parts of the country job growth is good but only at the low end of the wage scale. This will have a tendency to hold home prices down. On the other hand you have have slower job growth, but if the over income for the area is increasing (hard to have happen but it is possible) home prices can be enhanced.Good luck in your decision making process.Craig
Other things to look for when thinking about resale is to avoid houses on busy streets, that back to busy streets or industrial/commercial areas. Stand outside and listen for sounds of a nearby freeway or any other undesirable sounds.Check with the local police/sheriff department for activity in that neighborhood.Look for a home with a view or backing to trees, open area or field; on a culdesac, in an area of good schools. Try to buy one of the cheaper houses on the block/in the subdivision.3 bedrooms are better than 2, 2 bathrooms are better than 1. Garage is better than none; basement if they are common in the area.If a house has been for sale for a looong time, find out why (generally one visit to the home will make it obvious), and it could just be overpriced. Follow the other advise you have rec'd, and you will do fine.
Actually,You stand a very good chance of making money back and then some by buying a distressed property (comes in varying degrees from serious to slight) Get the appropriate discount to market. (A buyers-agent realtor can help you determine this) Use the home inspection report to haggle a hefty discount, put some sweat equity into the house and you'll do just fine.You should obviously have some handyman skills or good friends/relatives who will help you in order to do this. The money saved on lower payments can be put back into the house i.e. materials and labor.You stand a better chance of finding cooperative sellers in a sellers market.Good hunting!Curtis
Tasha,While it is always good think about the future, you also have to rememeber that you are going to live there, and you should at the very least like your house, if not love it!"I cannot afford to buy as much house as I would like..."Join the club! :) Be thankful that you at least can afford a house.The other posters have pretty much cover what you should look for. I would only point out that buying a house which backs onto vacant land could be detrimental, because you never know when another Wal-Mart could pop up. (If the land were dedicated parkland, or otherwise restricted, then that would be best.)Hope this helps!Dan
One of my concerns is that everything I have looked at in my price range is a "cookie cutter" home. Obviously, they are starter homes. With 3 kids, we need space. The houses with some brick are obviously worth more. Should I give up space for more value down the road with brick?
Square footage and location will be far more valuable than "some brick"IMHO.
Square footage and location will be far more valuable than "some brick"I understand brick is an attractive feature in tornado-prone areas.rad
I understand brick is an attractive feature in tornado-prone areas.I grew up in a tornado prone area.And brick is attractive because it's attractive. Not because it's any better in a tornado.Tornados will take down masonry buildings as well as stick-built ones.I lived in a masonry home, and we took shelter in the basement.And those homes with brick facades - where it's one row of brick on the exterior - they're purely for looks - they have no significant structural impact, except a hail storm doesn't dent brick. :)
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