The real estate market during the past five years was certainly scary, especially for younger and less experienced home buyers. And so, a lot of people in the Gen X and Gen Y age range sat on the sidelines. But the market has definitely bounced back, and many believe that now is a great time to buy. You just have to be savvy about it. Here are five home buying tips to help Gen X-ers and Gen Y-ers realize the American dream.
1. Have a five-year plan. You can no longer assume a home purchased today will appreciate in value within five years. If you’re unsure about your five-year plans, rent.
2. Use technology creatively. Gen X-ers and Gen Y-ers often start their home search online. Real estate listings sites, mortgage calculators and valuation tools like Zillow’s home value estimates are typically good places to start. Less obvious tools, such as Google Street View, can help, too. It once helped a client realize that the home she wanted to buy in San Francisco’s Hayes Valley neighborhood may not be as safe as she thought. Google Street View revealed that there were previously bars on the windows of the ground floor apartment.
3. Avoid information overload. Using the Internet and apps, home buyers can now access an unprecedented amount of data. Sometimes, however, it’s too much. For example, a buyer might learn that the seller stands to make a 10 percent profit in a short amount of time. Even though the profit is in line with current market values, that information might cause the buyer to make a lowball offer and end up missing out on a great house.
4. Don’t assume you can do it without an agent. With so much information online, many Gen X-ers and Gen Y-ers might think they can buy a home on their own. However, the role of the agent is no longer about finding listings. It’s about presenting the offer and getting it accepted, getting through inspections and getting the deal done. A savvy agent will know the ins and outs of any local market better than an uninformed buyer. Experienced agents will have a strong network in a local market that can give you the added edge. Finally, keep in mind that a listing agent might not even consider working with an unrepresented buyer.
5. Look for ways to increase the home’s value. Baby Boomers and preceding generations could usually count on staying in their home for many years and, in turn, their home’s steady increase in value over time. After the market downturn, however, that’s no longer the case. Because they’re so mobile, Gen X-ers and Gen Y-ers should steer clear of buying the best home on the best block. Instead, look for ways to add value. Look for homes that don’t show well, are marketed poorly or are outdated. Don’t be afraid of doing a light remodeling or making smart improvements to add value. If you have to sell your home sooner than you’d planned, you’re covered.