Homebuying Tips for Generations X and Y
According to a recent survey, people who belong to the Generation X and Generation Y demographics haven't been deterred by the housing market downturn at all. A Better Homes and Gardens Real Estate poll found that 75 percent of Gen X and Gen Y respondents believe owning a home is a key indicator of success, while 69 percent said the recent housing downturn made them more knowledgeable about homebuying than their parents were at their age.
And it turns out that members of generations X and Y are more motivated to buy a home than some older generations give them credit for. The survey revealed that they are willing to take second jobs (40 percent said they would) or move in with their parents (23 percent) in order to buy into the American Dream of owning a home.
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The real estate market during the past five years was certainly scary, especially for younger and less-experienced homebuyers. And so, a lot of members of Generation X and Generation Y sat on the sidelines. But the market has definitely bounced back, and many believe that now is a great time to buy. You just have to be savvy about it. Here are five homebuying tips to help generations X and Y live the American Dream:
1. Have a five-year plan.
Unlike the boom years, don't assume a home purchased today will appreciate in value within five years. If you're unsure about your five-year plans, it's better to rent.
2. Use technology creatively.
It's well-documented that Gen X-ers and Gen Y-ers start their home search online. Real estate listings sites, mortgage calculators and valuation tools are typically places a buyer starts. But, once you're in the market, there are tons of online resources. Less obvious tools, such as Google Street View, can help, too. It once helped a client realize that the home she wanted to buy in San Francisco's Hayes Valley neighborhood may not be as safe as she thought. Google Street View revealed that there were previously bars on the windows of the ground-floor apartment.
3. Beware of information overload.
Using real estate apps and the Internet, home buyers today have an unprecedented amount of data available. Sometimes, however, it's too much and can cause the buyer to shoot themselves in the foot. For example, a buyer might learn that the seller stands to make a 10 percent profit in a short amount of time. Even though the profit is in line with current market values, that information might cause the buyer to make a low offer and kick themselves a month later for missing out on a great house.
4. Don't assume you don't need a real estate agent.
Because so much information is online, many Gen X-ers and Gen Y-ers might think they can buy a home on their own. However, the role of the agent is no longer about finding the listings. It's about presenting the offer and getting it accepted, getting through inspections and getting the deal done. A real estate transaction can go 50 different ways now. A good agent will steer a buyer on the right path. A savvy agent will know the ins and outs of any local market better than an uninformed buyer with a full-time job and family. It's their business to be in the know, and it's what they do all day long. Experienced agents will have a strong network in the local market that can give you the added edge. Good agents like to work with other good agents. Finally, keep in mind that a listing agent might not even consider working with an unrepresented buyer.
5. Look for opportunities to increase the home's value.
Baby boomers and preceding generations could more or less count on staying in their homes for many years and, in turn, see their homes steadily increase in value over time. After the market downturn, however, that's not the case. Because they're so mobile, generations X and Y in particular should steer clear of buying the best home on the best block. Instead, look for ways to add value. Look at homes that don't show well, are marketed poorly or are outdated. Don't be afraid of doing light remodeling or making smart improvements that will add value. If you have to sell your home sooner than you'd planned, you're covered.
See more on Zillow:
3 Reasons Why Buyers Shouldn't Go It Alone
Don't Buy the Best Home on the Block
10 Things That Make a Home a Good Home
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