Advice for First-Generation Homebuyers
It's impossible to overestimate the sense of accomplishment you'll have when you buy a home. The sense of accomplishment is much stronger for first-time homebuyers. That's because first-generation homebuyers' joy in ownership reaches well beyond the homebuyer. Bank of America's Head of Neighborhood & Community Lending, AJ Barkley, says:
"Achieving this goal can give the buyer and those closest to them, including their parents and future generations, a sense of pride and accomplishment."
In other words, your desire to possess a home has far-reaching consequences. Allow yourself to be motivated by the fact that you are going to become the first person in your family to buy a property. Here are three suggestions to assist you achieve your goal as you begin your journey.
1. Make Contact with a Real Estate Agent
It's critical to consult with a trusted expert early on in the home-buying process. An agent can not only assist you in finding the appropriate house, but they can also act as your professional advisor and answer any questions you may have along the journey.
The National Association of Realtors' (NAR) recent Profile of Home Buyers and Sellers polled first-time homebuyers to see how their agent assisted them with their home purchase (see chart below):
Your agent, as shown in the graph, is an excellent source of information throughout the process. They'll explain what's going on, analyze a home's condition, and negotiate a contract with the best terms available for you. These are just a few of the reasons why having an expert on your side is so important when you make one of your most important purchases.
2. Do your homework and figure out what you can afford.
The second piece of practical advise for first-time homebuyers is to do your homework so you know what you can afford. This entails organizing your finances, analyzing your budget, and obtaining pre-approval from a lender. It also entails knowing the ins and outs of house financing, including how much money you'll need for a down payment.
Many homebuyers hold the popular fallacy that you can't buy a house without a 20% down payment. As Freddie Mac puts it,
"The most damaging down payment myth—because it prevents the homebuying process from getting started—is the belief that a 20% down payment is required."
The graph below depicts how much money recent homebuyers have put down on their purchases:
On average, first-time buyers put down only 7% of the buying price on their property. That's a lot less than the 20% many people feel is required. That means your down payment and home purchase are perhaps closer than you think. As you work with a real estate professional to better understand what you'll need for your acquisition, keep this in mind.
3. Keep in mind what home means to you.
Finally, keep in mind why you're looking for a property in the first place. The majority of first-generation homeowners understand the financial and non-financial benefits of homeownership. In fact, according to a recent poll:
- According to 73 percent of first-generation homeowners, the safety and stability that comes with homeownership is becoming increasingly important.
- Nearly two-thirds of first-generation homeowners believe that establishing equity in a home is becoming increasingly important.
As AJ Barkley puts it:
"Homeownership has a special meaning for many first-generation homeowners and their families, given the collective efforts to overcome financial challenges that can often span generations..."
If you're a first-time homebuyer, being prepared and working with a trustworthy professional are essential to realizing your dream. Let's connect right now so you can begin your journey to homeownership.