4 Steps to Buying a Starter Home

How to Look for, Select, and Buy Your First HomeA starter home, sometimes known as an entry-level home, typically refers to a relatively dressed-down home with basic amenities and an attractive price point. No matter what city, suburb, or town the buyer lives in, these homes are generally in high demand because of their practical benefits. So while buyers may face some initial competition, the appreciation of these homes tends to be consistent. Those getting ready to buy a starter home in Carver County may want to consider the following four steps.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Start with Finances

It's tempting to start looking at open houses just for fun, but it's better to start with finances. Starter homes are generally more affordable, but even they can still be expensive if buyers are looking in a hot market. For those who aren't sure if they're ready for a home, it may be a good time to get a prequalification letter. These letters are less involved than a preapproval letter and give buyers a general idea of what they can afford. Or, buyers can look online to get a quick summation of their price range. Doing so can drive the home buying process and dictate how buyers approach the next steps.

Select a Neighborhood

Here are a few key questions to ask when selecting a neighborhood:

  • Will buyers be expanding their household in the near future?
  • What kind of amenities would the buyer like to have (e.g., parks, shops, community gardens)?

Even for buyers who only plan to stay in their home for a few years, even one major compromise can have an effect on the quality of life for the owners.

Get a Real Estate Agent

Those ready to take the next step should start looking for professional help. A real estate agent can be the key to selecting a property that will fit the basic needs of the buyers without overspending. Those buying starter homes should have some degree of flexibility when it comes to where they live, but a real estate agent is the key to determining what a deal-breaker is. For example, they can give you a better idea as to which homes are likely to appreciate over time, which can make it easier for the buyer to select the right property. It's also important to know which states, and more specifically areas, are currently seeing property price increases. For example, in Minneapolis, home values have gone up 3.3% over the past year. Similarly, Northern Virginia Home Pro says that Amazon's HQ2 has prompted similar housing price spikes in the Northern Virginia area.

Work Out the Details

When buyers find their perfect starter home, they will need to work out an arrangement with their lender, negotiate the price and terms of the home, and then finalize the paperwork and close the deal. This complicated process can vary by state, which is another reason why a real estate agent can be so important to this process. The paperwork alone can be an endless and complex process where one mistake can delay the process for weeks. Having professional help can be crucial for a first-time buyer to get everything right.

There are so many advantages of a starter home, including their universal desirability. But just because the home itself may be bare-bones doesn't mean the home buying process is as straightforward as the property is. From finances to negotiations to getting the keys, buyers need to do their homework and seek out professional help that can help get them from one step to the next.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

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