In May 2016, U.S. News and World Report published a real estate article titled "Where Have All the Starter Homes Gone?" That headline highlights one of the main reasons why some first-time home buyers are skipping the starter-home stage of ownership. There simply aren't very many entry-level choices on the market.
Wary of bidding wars, steep down payments and the battle for mortgage approval, some first-time home seekers have opted to remain renters or to return to their parents' homes in order to save for a purchase later. But others who have higher paying jobs and/or sufficient savings to qualify for home loans are choosing to purchase what would have once been considered a "move-up" home.
Shortage of Entry-Level Homes
The U.S. News article indicated a lack of affordable condos, which were once a staple of the first-home market. During the 1980s and 1990s, there was a boom in new construction of inexpensive condominiums as well as conversion of older properties, such as apartment buildings, into condos.
The demand for condos was so strong that a shortage of skilled labor developed. This led to faulty construction and unhappy homeowners in some areas. Eventually, some states, such as Colorado and Washington, passed construction defect laws to protect consumers. Unfortunately, the laws caused developers to back away from condo construction and, particularly, the lower end of the market. It's the classic rock-and-a-hard-place...
Buying a home in a competitive market can be challenging, especially for first-time home buyers. Homes sell quickly when competition is fierce. Proper preparation and strategic thinking can help you through the home buying process.
Get Pre-Approved (not Just Pre-Qualified) for a Mortgage
Getting pre-qualified for a mortgage is often the first step in the mortgage loan process. After supplying a lender with basic information about your income and other financial information, that lender will typically then tell you how much money you may be able to borrow to buy a home, assuming that the information that you have supplied is accurate. Mortgage pre-qualification is a fairly simple process. However, because the lender usually doesn’t verify the information, a mortgage pre-qualification is not very meaningful when putting down an offer on a home.
However, mortgage pre-approval is the next, and arguably more important, step in a mortgage loan process. To get pre-approved for a mortgage, borrowers present financial documents to their lender. Next, the lender runs a credit check and verifies the information given. When the process is over and if the buyer is approved, the lender then supplies the buyer with a letter that states the amount of mortgage pre-approval. A mortgage pre-approval letter is much more meaningful to sellers, because the buyer is much more thoroughly vetted. To make...
You’ve decided to purchase a new living space, and you may be wondering which type of residence would best fit your needs. With all of the additional considerations that you’ll encounter during the home buying process—paperwork, escrow, navigating the mortgage loan landscape, etc.—it’s easy to feel overwhelmed.
Add to this an array of choices regarding the types of suitable residences available and it’s little wonder you’re here asking the question: do I buy a traditional home or a condo?
While only you can decide which is the best fit based on your needs, there are several pros and cons to consider when choosing either as your next home.
Square Footage and Privacy
More than likely, a condo’s square footage is going to be less than that of a house. Of course, there are exceptions, but they are few and far between. In major metropolitan areas, condominiums (and apartments) are the norm when it comes to housing. Los Angeles, for instance, has condos on the market ranging anywhere from 900 square feet to over 1700 square feet. Meanwhile, LA houses have a much larger potential upper range—giving their owners an abundance of living space.
Also, keep in mind that not all condominiums are detached or stand alone. Many are constructed similarly to apartments where you’ll have neighbors on either side of you sharing a wall. So, while you may have a large, comfortable space, you may also need to make sure you can ...
Americans are busy. In fact, Americans today are working longer hours, retiring later, and taking less vacation time now than they did as recently as the 1990s. For the busy people who would like to purchase a home in the near future, the lack of time available to focus on the home search process can be a real source of concern.
If you are one of the thousands who feel they may not have time to shop for their dream home, the following tips can offer real ways to reduce the amount of time needed for selecting the home that is just right for you and your situation.
Make a Detailed List of Important Features Before the Search
The first step in a highly focused home search process is to really know what you are looking for in your next home instead of trying to view all the homes in your price range. To do this, make sure that you drill down to get the most detailed, accurate list possible.
It should include basic criteria, such as the number of square feet, bedrooms, or bathrooms, area, and price ranges, as well as more specific information such as:
- the floor plan
- number of stories and if there is a basement, bonus room, or other space
- whether you want a fireplace and if so, what type
- type of heat
- location details, such as school district
- lot size, and exterior features, such as patios, decks, fenced yards, etc.
- number of garage spaces