Is it Time for Your First Home? A Guide for Young Professionals and Millennials Buying Their First Home

September 24th, 2013 by Hudson & Marshall

Are you a young professional trying to live the “American Dream?” For many millennials, this includes graduating from college, pursuing the career they love and making big first purchases, like buying a home, with financial stability and support from loved ones.

The first step to buying any home is to first make sure you’re ready. Buying is a commitment, so understand that purchasing a home comes with more responsibilities and upkeep costs compared to renting. However, there are several benefits including the ability to customize your space, an increased value on the home in the future, paying off your mortgage entirely and tax benefits. Once you know you’re ready, it’s time to start the process. Below are some tips to get you headed in the right direction:

“Where do I start looking?”

When starting your house search, begin by checking the selling prices of homes in your area or the area in which you want to live. There are several ways to search home values, including Zillow, Trulia, the national MLS listings website and smartphone apps such as Homesnap. Another option is to purchase a home at auction. Companies such as Hudson & Marshall specialize in conducting nationwide home auctions for foreclosed properties and offer ways to search for these homes through online auction schedules and state search maps.

“What can I afford?”

One of the best ways to learn what you can afford is to get prequalified for a loan. By doing so, you’ll learn how your current income, assets and liabilities translate into what you can afford for a mortgage. Also, when you begin looking at homes, estimate what your total monthly home costs will be— including taxes and homeowner’s insurance. Before purchasing, be sure to factor in any closing costs and any additional requirements stated in the terms and conditions of the home. Sometimes, these include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowner’s insurance or homeowner’s association fees.

If you choose to go the auction route, it’s important to understand the financial differences in the sale. One of the benefits of purchasing at an auction is the opportunity to buy a home for significantly less than the actual value of the house. Keep in mind that auction properties are sold as is, and bids will be subject to seller approval. If you have the winning bid, be ready with your earnest money — consider it like a small down payment that shows your commitment to purchasing the property. Note: the earnest money is non-refundable once the bid is accepted by the seller. While purchasing a home at an auction isn’t for everyone, it provides a unique opportunity to find your dream home.

“I’m lost. Where do I turn?”

Seeking advice from a real estate agent or colleague knowledgeable about the real estate industry can be helpful in understanding all of the processes and requirements of purchasing a home. Also, be sure to ask friends and family members who have previously purchased a home about their experience. They are a great resource and will most likely share what they’ve learned about financing, construction, inspections and more in the course of buying their first home.

Finally, while it can be a daunting task to find your first home, remember your dream house may not come in the package you originally envisioned. Take your time. Keep repairs, innovations and upgrades in mind when searching, and feel confident in your home purchase at the end. You don’t have to break the bank in order to get your “American Dream” as a millennial and young professional.

This article was contributed by experts at Hudson & Marshall, the nation’s leading real estate auction firm specializing in bank-owned foreclosure listings. For more information, visit: www.hudsonandmarshall.com.


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