First-time homebuyers traditionally buy a starter home. While the cost of entry-level real estate in Boulder County is higher than what your grandparents paid for housing, it’s still a stepping stone. Real estate experts point out the starter home serves as a forced savings account for many young home buyers. After owning a first home for at least 5 years, you will likely have enough equity in the home to afford a step-up home. Essentially, the equity translates into a 20 percent down payment on a nicer, larger and more prestigious home in an ideal Boulder County neighborhood. According to an article by quickenloans.com, there are several pros and cons to consider when buying a first home. Thirty-five percent of people buying homes are first-time home buyers, which is up from 32 percent last year.
Should you buy a resale or new construction?
One first point to consider is whether or not to buy a new construction. By some definitions, a new construction home is a luxury. Decades ago, first-time buyers did not even consider new construction. However, builders gear 31 percent of inventory homes with first-time homebuyers in mind. Starter homes, experts point out, are smaller than 2,200 square feet. Builders can easily afford to build smaller homes because they know not only millennials but retiring baby boomers create tremendous demand for small houses.
Will you need to make a lot of repairs?
Some of the ways to save time and money with a starter home include less upkeep because there is often less to mow in the yard and less to vacuum inside the home. At the same time, you will spend more money on heating and cooling costs if the starter home does not have energy-efficient and newer appliances. Talk to your real estate agent about potential Boulder County starter homes that don’t require a lot of repairs. Some of the homes flipped by investors include updates that save you money on utility costs.
Other questions to ask before buying a starter home include what kind of mortgage to obtain and how much to put down. Talk to a lender about a pre-approval letter that clarifies exactly how much money available for a home purchase. Because prices in Boulder County are considerably higher than other real estate markets in the country, consider putting down less than 20 percent. Buying a first home is an easy way to break into the home ownership business that creates wealth for individuals and families. At Laura Guerra Real Estate, we work hard to help first-time home buyers and repeat home owners find a perfect house. For tips on market dynamics and home appreciation in Boulder County, please contact us.