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Tips for first-time homebuyers in 2021

For many young or first-time homebuyers, purchasing a home can feel intimidating. A recent survey shows some homebuyers ages 25 to 40 may be unsure about the home buying process and what they can afford. It found:

  • “1 in 4 underestimated their buying potential by $150k or more”
  • “1 in 4 underestimated the increase in value by $100k or more”
  • “47% don’t know what a good interest rate is”

Because they feel uncertain, many young homebuyers have given up on their search, or worse, they’ve decided homebuying isn’t for them and never started on their journey to begin with.

If you’re interested in buying but aren’t sure where to begin, here are three key concepts about homeownership you should understand before you get started.

1. What You Need To Know About Down Payments

Saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. As Freddie Mac says:

The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.

2. You May Be Able To Afford More Home Than You Think

Working remotely, exercising, and generally spending more time than ever in our homes has changed what many people are looking for in their living space. However, some young homebuyers don’t feel they can afford a home that suits their growing needs and have decided to continue renting instead. That means they’ll miss out on some of the long-term benefits of owning a home. As an article recently published by NAR points out:

“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”

Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from renting to buying.

3. Homeownership Will Become Less Affordable the Longer You Wait

Finally, with mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, notes:

As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”

Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying powerIf you’ve been on the fence about buying a home, there’s no time like the present.

Boston Condos for Sale and the Bottom Line

If you feel overwhelmed by the prospect of starting your home search, you’re not alone. Let’s connect today so we can talk more about the process, what you’ll need to start your search, and what to expect.

FAQ for first-time Boston condo home buyers

Do Boston condo first-time homebuyers need 20% down to buy a condominium?

No. As Freddie Mac says: The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

What is the average downpayment for a first-time homebuyer purchasing a Boston condo?

According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.

Will Boston condo prices come down this year?

With mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, notes:As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”

Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying powerIf you’ve been on the fence about buying a home, there’s no time like the present.

Should I get a pre-approval before looking at Boston condos for sale?

Boston Condos for Sale & Boston Real Estate 

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Beacon Hill Condos for Sale

Ford Realty Inc., Charles Street, Beacon Hill

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Tips for first-time homebuyers in 2021

2021 has continued to be frustrating for first-time homebuyers in Boston as well as many of the metro markets in the state.  While some areas are showing signs of the market weakening popular metro areas are continuing along the same vein as 2020.  So how do you navigate the Boston real estate market as a first-time home buyer in 2021?

What Is Driving The Boston Real Estate Market in 2021?

As a first-time homebuyer 2021 understanding what is currently going on in the market is the first step in successfully purchasing your first Boston condo for sale.

We have seen exceptionally low housing inventory the past few years.  There are more buyers entering the market than there are homes for sale. 

Boston condos are selling at 98% of the list price.  Many homes are going over asking and in half the time in 2021.

What A First-Time Home Buyer Should Be Doing in 2021

The data shows that there is much competition among Boston real estate buyers.  Buyers are fighting for good homes. Let’s look at some steps you need to take to be successful.

Find A Boston Condo Buyer’s Agent

A good buyer’s agent can make the whole first-time buying experience go so much smoother.  Interview several agents and find one you will be comfortable working with.

A buyer’s agent can help you buy your first home from the very start.  They can help find a lender that is best for you and bring you right to closing.  If you ever heard the statement you don’t know what you don’t know…. It could not be truer.  But a buyer’s agent knows!

Have a Pre-Approval Letter before Searching for Boston condos

Get pre-approved before looking at homes.  Understand your finances inside out and backward.  You don’t want to put an offer in on a home and have a surprise later. 

Make sure your agent gives you a good overview of the home buying process, so you have a basic understanding of what is ahead of you.

Educating Yourself On The Boston Condo Market

Knowing what type of market you are in determines many aspects of the buying process.  It dictates how you look for homes, structure an offer, negotiate and how you renegotiate after the home inspection. 

In many markets today, or what is a hot seller’s market, the sellers are in the driver’s seat and have the advantage. 

Understand You Are Competing with other Boston Condo buyers

Understand what is happening in your local real estate market.  Many first-time homebuyers are not aware of what it takes to get a good home and get frustrated, with some leaving the market. 

You need to realize you are competing with other buyers to get home.  If you do not act quickly and step up, there is another group of buyers who will.  Buyers need to react quickly and stand out among the buyer competition.

Get Into Boston Downtown Condo Immediately

The best of homes go under agreement in 3-7 days.  If you think you like a home, you must visit it immediately.  It will be gone a week later.   Most homes are getting snatched up immediately by buyers.

Get on your real estate agent’s system that sends you listings daily.  Review daily and schedule appointments immediately.  Find out if there is an open house and when offers are due.  Waiting a week to get into a home will just mean it is no longer available.

Offer Competitive Boston Condo Offer

Many homes in hot seller markets can go well over asking.  When it comes time to write an offer step up your game.  Offer a competitive price and keep your contingencies and requests to a minimum.

Offering 10% below the asking price will only lead to disappointment.  Your buyer’s agent can help you structure a winning offer.  It is not unusual for a home to get 12+ offers within days of listing.  Make sure yours catches the seller’s attention.

The Boston Condo Home Inspection

Unlike a buyer’s market a seller’s market puts the seller in the driver’s seat.  Be very reasonable about your repair requests.  If you ask for the moon, the seller will just tell you to step aside there is another offer behind yours.

Do not accept a sub-par house.  But just like buying a used car, you need to accept some dings and scrapes.  You are not usually buying a brand-new home.

Boston Real Estate and the Bottom Line

Being prepared financially and being educated about what is ahead of you will make the buying process much easier for you to begin with.  That all starts with hiring a good buyer’s agent who can help you navigate the 2021 real estate market.  

Ford Realty – Boston Luxury Real Estate Professional – Call Today! (617) 720-5454 

We go beyond the fundamentals of effective pricing and marketing and help you make decisions to get top dollar for the sale of your home or top value for your purchase. We focus on Boston luxury condos for sale and offer a variety of comprehensive luxury real estate services in the following Boston neighborhoods, but not limited to

Boston Condos for Sale & Boston Real Estate 

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Tips for first-time homebuyers in 2021

Updated 22021

Buying a home will likely be one of the biggest and most important purchases you make during your lifetime, and it’s still part of the American dream. Investing in a home can also be a smart way for younger generations to build wealth over time.

Over the last year, we’ve seen interest rates drop to historic lows, making it possible for many people across the country to buy a home earlier than planned. And while you might be willing to make big compromises to score a home you love in a hot real estate market, there are a few important things I wish all first-time homebuyers knew while looking for their first property.

While you might win a bidding war or save money in the near term by skipping a home or termite inspection, having them done is a smart move that can save you from making an expensive mistake. Once your offer is officially accepted, schedule a general inspection and a termite inspection as soon as you can.

With the general inspection, an inspector will visit your property and spend a few hours looking at key areas of your home. These include the roof, foundation, and even smaller items like cracked tile or leaky faucets. Your inspector may recommend a specialist if they see issues with something more specific, like a fireplace or the swimming pool system. 

Though sellers may reveal termite damage upfront, an inspection is the only way to know how extensive the issue may be. While significant termite damage can be terrifying and costly to fix, having an inspection done is typically inexpensive. In addition to reporting on the state of the home and any problems, your inspector can also share preventative treatments to keep termites away in the future.

2. Don’t panic when you receive your inspection reports.

Though it’s daunting to think about uncovering a list of items that need attention after making an offer on a home you love, first-time buyers should remember that all inspections turn up a long list of issues — and it’s important not to panic. 

The purpose of having a home inspection is to show you the condition of the home and eliminate any surprises before you’re the owner. Typically, most items are minor and aren’t costly to maintain. And some might not require immediate repair. For example, I often see inspectors recommend changing the A/C filter. This is incredibly easy to do yourself, and it only costs about $10 to buy a new filter. If there are bigger problems on your report, I suggest working with a professional who can help you understand what needs to be fixed and how much it will cost.

If the inspection turns up results you’re not happy with, or if you can no longer afford to pay for the home and its necessary repairs, you can choose to renegotiate your offer or walk away. Major red flags such as mold, structural problems or other expensive issues may indicate it’s a good idea to move on. You should also pay close attention to the real estate deal-breakers and anything that presents a risk to your health or safety.

3. Your lender will help you navigate the appraisal process.

Much like home inspections, many first-time homebuyers are unfamiliar with appraisals and how to navigate them. While mortgage lenders require an appraiser to visit the home, they’ll also work with you closely during that part of the process. Having a home appraised is a quick process. The appraiser will only spend a short amount of time inside the home. Following their visit, they’ll complete the appraisal by comparing similar homes in the neighborhood. 

Your appraiser may find that the home is worth exactly what you’ve offered, or even more than what you’ve offered. In these cases, nothing will change and you’ll be set to continue moving forward with your home purchase as planned. In the event that the home is appraised for less than you’ve offered, you’ll be asked to pay the difference between the appraised value and your offer price as a cash down payment to the seller at closing. 

If you can’t afford to pay the difference, you can choose to cancel your purchase. Alternatively, you can also try to work with the sellers to negotiate the price. Your third option is an appraisal rebuttal, or asking for a correction on value. It’s important to remember that appraisals are an art, rather than science, and the exact value of a home is difficult to define. I had my current home appraised by two different appraisers within a week, and they each came up with very different values. Consulting with your agent can help provide you with clarity on the best next step.

Buying your first home is a major purchase. Working closely with industry professionals — from your agent and lender to inspectors and appraisers — will help you avoid costly repairs and financial errors. This will not only save you unnecessary stress but also set you up for happiness in your new home later on.

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Updated: Boston Real Estate for Sale 2021

Boston Condos for Sale & Boston Real Estate 

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Beacon Hill Condos for Sale

Ford Realty Inc., Charles Street, Beacon Hill

Click Here to view: Google Ford Realty Inc Reviews

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