Fourth in a series
A roller coaster of emotions can come with buying a home. From stress and nervousness over things like finances and location to sadness and nostalgia in leaving the past behind to feelings of relief and joy as you grasp a fresh set of keys to your own home. The waves of emotions are normal, but to young professionals looking into purchasing their very first home, these feelings can be intimidating and sometimes overwhelming.
So as you look toward that next step in buying a home, keep in mind what real-estate agents, especially those who work primarily with millennials and Gen Zers, advise to keep first-time homebuyers from getting lost in this pit of raging emotions.
The first thing you should keep in mind is that most financial advisors recommend that when looking at housing prices your monthly housing expenses should be no more than 28% of your gross monthly income. Additionally, you should be spending no more than 36% on total debt that includes housing, and things such as student loans, car expenses, credit card payments, etc.
Framing the buying process
Sherman Milton III, Florida Heritage Real Estate Group, is a 29-year-old millennial who mostly works with his own generation. The three tips he gives his clients right off the bat?
- Be aware of your financing and what you can afford;
- Keep an open mind;
- Don’t ballout on your first home.
“For my millennial clients, the main issue that I find is financing,” Milton says. “They tend to need some help with their credit, for one, and then we all have students’ loans. Depending on the status of those loans, the amount of loans we have taken out that can make it difficult for us to get financing or to qualify for what we want to qualify for.”
You want to make sure you have your budget in mind before looking so you aren’t disappointed in what you realistically can afford, he says. If you find yourself in this scenario you usually have to choose between two things.
You could either move out a bit further from your desired area to find cheaper options or you could find a way to come up with extra cash by getting an additional job, paying off some loans, or receiving a “gift’’ such as a downpayment from an immediate family member.
Finding the right team
Something equally as important within your search is who you decide to work with, says Justin Ricke, Lombardo Real Estate Agent.
“The people you partner with make the difference in so many ways, from the mortgage loan officer, to your realtor,” Ricke says. “Those are factors you can control, and there are plenty of factors outside of our control with all the moving parts and conditions that it’s going to be stressful.”
“Do your research, make sure the lender that you’re working with comes with high regards, and I would say the same for a realtor. Make sure you’re working with someone who this is their career. This is not a gig for me, it’s not a part-time job, this is my career, it’s my craft and I take it very seriously,” Ricke says. “That would be a part that I say is very vital.”
His advice? Come up with a list of what you need
in your first home, what you can’t compromise on. This could be living in a pet friendly neighborhood, safety ratings in desired neighborhoods, a certain number of bedrooms, or a location that makes commute less of a headache, etc. Then be willing to check out whatever your agent wants to show you that may not necessarily check off all of your wants
but does qualify based on your needs. In theory, you won’t find what you probably envisioned to be that “perfect house.”
Your first home should be basic, something that you could potentially put some small, cosmetic renovations into to help you increase the value on that home. Agents say you’ll thank yourself for this decision in the future when you decide it’s time to relocate and you potentially come back and make a profit.
The market is on fire
Another thing to keep in mind is the status of the housing market.
Tampa’s housing market is hot right now, with interest rates at around 3%, a lot of individuals are looking into buying a house to save money in the long run as opposed to renting.
“It is very aggressive scenario right now with buying a home,’’ Ricke points out. “You have to be prepared for multiple offer scenarios. You have to be prepared to sometimes go above what the listed price is. …’’
“More than likely, you might to have to put in a little extra and that’s just the market conditions right now, it’s the reality of the situation that we’re in. That’s not what it is 100% of the time, but it’s the rule more often than it is the exception.”
But no need to rush
Comfortability throughout the process is crucial; you don’t want to rush this tremendous investment.
“Yes, time is of the essence in today’s marketplace, but you should feel comfortable about doing it. People should take the time to explain things to you, and please ask lots of questions, don’t just sign off on the paperwork and after you close be like, ‘Oh I don’t even know what I did’,” Ricke says. “That’s terrible, you’re going to have buyer’s remorse almost instantly because you didn’t ask any questions.”
There’s no set path to follow when it comes to purchasing a home, when possible your agent may try to negotiate for you, other times you might have to submit an offer above the original asking price.
All in all, the waves of emotions that come throughout this whole process will be worth it when you’re standing in front of your brand-new home and reaching over, grabbing your new keys.
“That excitement, I can’t describe it, it’s just a feeling you get when you’re at closing because these are first time home buyers, this is their first house their purchasing and it’s a struggle for a lot of them,” Milton says. “If you look at it, a lot of folks don’t buy their first house until their like late 30s and 40s so when you’re 29-, 30-years-old and you’re buying a house, you’re like #bossmove.”
Shaping the future
Tampa is one of the nation’s top 10 markets for real estate investors, according to surveys by PwC and the Urban Land Institute. Several billion-dollar projects are in the works by both private developers and by local governments aiming to enhance local living experiences.
Millennials are moving here for opportunities they can’t get elsewhere, says Tampa City Council Member Bill Carlson.
Millennials are being tapped to “take important leadership roles in our community at a young age,” Carlson says. “Tampa Bay is a place where you can make a difference and take a part in setting our vision for the future.”
Tampa’s expanding airport and seaport as well as its growing tech ecosystem and expanding workforce
driven largely by healthcare and by local colleges and universities are all factors in attracting a younger generation.
Related stories in the series: