The real estate market is often a daunting place for first-time home buyers, and it may seem like established homeowners have all of the advantages. For example, they sometimes receive favorable treatment from lenders due to having a mortgage history, and the ability to sell a home and cash in on their equity allows them to cover down payments and closing costs more easily.
However, first-time buyers are in a unique position that places them under much less pressure to buy. Several grants are available to them, and they often have access to a broader range of houses for sale compared to current homeowners. If you're a first-time home buyer, read on for the top 3 advantages you have when looking for your new home.
1. First-Time Home Buyers Are Under Less Pressure to Buy
The most important advantage you have as a first-time home buyer is that you're not selling your existing home. When people put their homes on the market and start looking for a new one, they often have to move very quickly after their current home sells. This places an undue pressure on them to buy.
When you don't have to worry about your home selling while looking for a new one, you're relieved of this pressure, and this gives you a number of advantages of a buyer. In practical terms, you can wait until you've found a home for sale that you truly love rather than one that's simply acceptable. It also means that you can wait for changes in market conditions—for example, waiting for a decrease in interest rates or waiting for a seller's market to turn in to a buyer's one.
It's also much easier for first-time home buyers to walk away from homes if the seller decides to increase the price with a counter-offer or if a home inspection uncovers severe structural problems with the home. The ability to tell sellers that you'll walk away from the deal and actually mean it is a very powerful negotiating tool that first-time buyers have in their pockets.
2. Governments Offer Exclusive Grant Programs for First-Time Home Buyers
States (and sometimes counties and cities) provide grant programs for first-time home buyers. State and local governments are always looking for ways to increase home ownership within their communities, and they know that first-time home buyers are purchasing homes to live in them rather than purchasing them as an investment property.
These grant programs typically take the form of assistance with down payment (which new home buyers often struggle with) or access to extra financing. Look up which programs are available in your area—they're a great way to reduce the overall cost of purchasing your next home.
3. First-Time Buyers Can Often Buy Smaller Homes
Finally, first-time home buyers typically don't have the same square footage needs as established home owners. While most first-time buyers are looking for a home in order to expand their living space, it's difficult to accumulate a whole bunch of junk in an apartment or small rental.
This allows you to access a broader market of homes compared to other buyers. For example, older homes with less square footage compared to newer ones may be perfect for you. There's less competition from other buyers for these homes, which means you're often in a much better position for negotiation. Once you've bought the home and established some equity, you can always sell it and up-size into a home with more space.
Overall, first-time buyers do have a number of advantages over homeowners on the real estate market, even if it may not seem that way at first. If you're a first-time home buyer, don't be afraid to contact a real estate agent and begin your home search—you're under much less pressure to buy, and you're often in a better negotiating position. You just might find a great deal on a home that you love.
After thinking long and hard about what kind of home to buy, I began talking with a real estate agent about getting a deal that I could live with for the rest of my life. I really wanted to find a home and a deal that offered pleasant terms for me and my business, so I began focusing seriously on getting things done. It was amazing to me to see just how different various real estate deals were, and before I knew it, I was making some changes that would work for my lifestyle. Within a few months, things were a lot better. This website is all about understanding and applying real estate deals.