Purchasing your first home is exciting! There are a lot of choices to consider. This week, I welcome back guest blogger Shirley Martin, who shares her insights on this topic. I hope you enjoy this one!
Making Your First Home Purchase Choice
Whether to buy your forever home now, or make your first home investment a starter home is a big decision. There are pros and cons that will be different for everyone based on finances, the type of home you dream of being your forever home, and the availability of the homes in your market.
The first step in determining what kind of home you can afford to purchase is having an accurate appraisal. An appraisal is the estimated value of a home that is based on an inspection.
If you’re in the greater Cleveland area, contact Jamie Owen, a state-certified residential real estate appraiser at Aspen Appraisal Services. Cleveland Appraisal Blog is full of helpful information. With over 24 years of experience, he can help you with any home appraisal need professionally and expertly.
What Is a Starter Home?
A starter home is a smaller home, usually two bedrooms or fewer. Most starter homes are not in the most ideal locations. Young couples or families choose a starter home since they’re most affordable for them and a chance to build equity in order to purchase their dream home later.
When you purchase a starter home, ideally you’ll want to live in it for at least two years to build up equity but three years is ideal.
3 advantages of purchasing a starter home are:
- Price. This is important if you think your financial situation could fluctuate or you don’t have enough for a down payment on a more expensive home.
- Taxes. Property taxes are less on a smaller home with a lower appraised value.
- Less maintenance. A smaller home involves less upkeep. You can save for your dream home by not spending money on upgrades like appliances or flooring in a home you don’t plan to stay in very long.
3 disadvantages of purchasing a starter home first:
- A feeling of it being temporary housing. You know that in a short time you’ll have to leave neighbors, schools, and local businesses you may have come to enjoy.
- Repairs An older home means older roofs, appliances, and HVACs. It might be a good idea to purchase a home warranty to save you some costly repairs while you’re there.
- Resale. It’s harder to sell a smaller home in a less desirable area and you may not get the percentage out of it you wanted if the property value decreases in your area.
3 advantages to purchasing your forever home first:
- Customizing. Customizing your home without having to weigh the resale value of those upgrades
- The size you need. Having a larger home means you won’t be cramped when your family grows
- Roots. Knowing you’re there to stay allows you to put down roots.
3 disadvantages to buying your forever home first:
- Costs. The higher price will mean higher down payment and closing costs.
- Upkeep. A larger home means higher maintenance and repair costs.
- Equity. It will take longer to build equity.
As a Homeowner
Whether you’re purchasing a starter or a forever home, it’s smart to purchase a home warranty. Homeowner’s insurance only covers structural damage, theft of belongings, and injury on your property.
If you want coverage in case home systems or appliances break down, you’ll need to invest in a home warranty. This is an annually renewable contract that can cover breakdowns to your heating, cooling, electrical, and plumbing systems, along with covering appliance repairs. Before choosing a home warranty company, be sure to read reviews to find a policy that fits your needs and budget. Home warranty reviews are a good place to start.
Always hire the most reputable company when it’s time to move. Choosing a “low rate” moving company can cost you more in the long run. Take advantage of online reviews to evaluate your potential mover before signing any contract.
Buying your first home, or your first home in many years is exciting and a chance to be a part of the American dream. Whether it’s a starter home or a forever home, it will be your home, and that’s what’s really important.
There certainly are a lot of things to think about when it comes to purchasing your first home. A big thank you to Shirley Martin for sharing some of the pros and cons when making this big decision!
And thank you for being here to read articles from the Cleveland Appraisal Blog. Next week, I’ll have another article that I am working on. In the meantime, have a fantastic weekend!
This week I leave you with some funny animal videos. Enjoy!
If you’re an appraiser looking to sharpen your analytic skills, check out George Dell’s next Stats Graphs and Data Science 1 Class in August.
Have a great weekend!
I’ve just released a new episode into the world. I hope you enjoy it!
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Click here to visit their website.
Here are some links to other articles I’ve enjoyed recently! I hope you will also…
Lawn Chair Precision Shows Us Folding Chair Sanity In A La-Z-Boy Housing World – Housing Notes by Jonathan Miller
Debate on Appraising Short-Term Rentals – APPRAISAL TODAY
Part 3: Fixing an Appraiser Excess? – George Dell’s Analog Blog
6 Reasons Your Home May Not Appraise In Today’s Market? – Birmingham Appraisal Blog
Is the housing market getting back to normal? – Sacramento Appraisal Blog
Debate on Appraising Short-Term Rentals – APPRAISAL TODAY
For my readers in the CLE area… here are some articles related to news in our local area. I hope you enjoy these also…
Growing season: Spice Field Kitchen uses summer plants to teach kids about local food – Karin Connelly Rice of Fresh Water Cleveland
Park in the mall: Cuyahoga Valley National Park transforms Tower City into green oasis- Karin Connelly Rice of Fresh Water Cleveland
