It’s a fact of life that inventory shortages affect every real estate market segment. These shortages are hitting the entry-level segment the hardest. A lack of inventory makes it harder to find starter homes for first-time buyers. Here are some strategies from Realtor Magazine that will help you find more starter homes.
Redefine Deal Breakers
Every first-time buyer has a list of amenities they expect their starter home to have. But these expectations can lead first-time buyers to dismiss affordable options. First-time buyers must realize some items on their list are actually “wants” and not “needs.” For example, a basement or guest room is nice, but is it necessary?
Location can also price first-time buyers out of the market. First-time buyers often find better prices away from the city center. Some first-time buyers might be unwilling or unable to live farther away. If that’s the case, ask them to consider a townhouse or condominium instead of a single-family home. Fixer-uppers can also give first-time buyers more budget-friendly choices.
Sometimes you have to create your own starter home inventory. Don’t be afraid to knock on doors, send letters, or post on social media to ask owners if they want to sell. Keep an eye out for fixer-uppers that aren’t on the market. Some owners might be more willing to sell if they can list their homes as-is instead of spending money on repairs.
You should also reach out to owners who put their homes up for sale, but the listings have expired. They might be willing to relist with the right motivation.
Get Creative With Financing
First-time buyers should get a mortgage preapproval before shopping for a home. Still, their financing package might not be enough to buy a starter home in a higher-priced market. The state of New York offers down-payment assistance and other programs. Some first-time buyers might be eligible for a Federal Housing Administration (FHA) grant. Other first-time buyers might consider HUD-owned properties. Help is also available for military veterans and rural buyers. Remember that conventional lenders often offer incentives to first-time buyers. A good
relationship with your local lenders can keep you in the loop when it comes to creative financing.
Inventory shortages result in bidding wars. Sometimes a seller is willing to accept a lower offer if the buyer makes certain concessions. For example, sellers appreciate buyers who waive closing cost help. If a buyer is willing to speed up the closing timeline, that can attract a seller’s attention. Sellers also appreciate it when a buyer is willing to pay for major repairs. If a seller doesn’t have to take responsibility for repairs, it makes up for a lower offer. As you can see, there are several ways to expand starter home inventory for first-time buyers. It’s up to real estate professionals to be creative. Think outside the box, and don’t give up. At Lake and Mountain Realty, we can offer solutions for inventory shortages. We can also help first-time buyers find starter homes. Contact us today to get started on your journey to home ownership.