REALTOR’S GUIDE TO GETTING YOUR DREAM HOME
- Sep 9, 2016
- 2 min read
If you believe some of today's headlines, young professionals like you just aren't interested in buying a home. You’re either too broke, too busy working, or too much of a nomad to plant roots in a community. But the numbers tell a different story.In fact, millennials represented the largest share of homeowners, responsible for 35% of recent home purchases (via Realtor.org). No other generation showed as much buying power when it comes to real estate. Moreover, as a group, they have been gaining clout in each of the last four years.
How can you get into your dream home when housing markets are hitting new highs? We asked three millennial realtors, who are also homeowners, for advice on where and how to buy a first home. Read on for five tips they say will make you a smarter shopper.
1. Build a budget
Though you know you can probably afford a home—even one in a hot market—don’t overlook the importance of creating a budget before hitting the open houses. Ignore that, and it’ll be like trying to make a gourmet meal in your new Chef’s kitchen without first pulling and mixing the ingredients.
“A lot of people call a mortgage broker and find out they’re approved for $450,000. Soon enough, they’re out looking at $450,000 homes,” says Jim Streff, a Chicago-based SoFi member, who has been selling real estate in the Windy City since graduating from the University of Iowa in 2011 with a degree in finance. “They’ve got to consider the bigger picture —other financial goals—and then perhaps look at $300,000 homes instead.”
So, lay out your expenses before you start shopping: list your debt, recurring bills, everything you owe on a monthly basis. Now figure your total guaranteed monthly income. Finally, subtract your expenses from your income. Whatever remains is the amount you can afford on a monthly mortgage loan payment. But don’t plan to spend that much; leave wiggle room for unexpected expenses. Also think ahead about legal and closing costs, moving expenses, that funky mid-century living room collection you’ve been eyeing, and of course, your monthly savings goals.
For more information about steps to get your dream home, click here.
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