What to do if you’re a young, sin­gle home­buyer

Daily Press - - Real Estate - By Ellen James Martin An­drews McMeel Syn­di­ca­tion

A sin­gle woman of 29 says she plans to buy a city condo one day. But first she in­tends to get her ca­reer mov­ing, travel abroad and pay back her nearly $200,000 in stu­dent debt.

Ash­ley Dixon, a cer­ti­fied fi­nan­cial plan­ner for an ad­vi­sory firm fo­cused on mil­len­nial clients, isn’t sur­prised by this young woman’s in­ten­tions. Many of her clients in the same age group share her sen­ti­ments.

“Sin­gle mil­len­ni­als would still like to have that ‘for­ever home.’ But first they want to put all the loose pieces of their life to­gether,” says Dixon, who’s af­fil­i­ated with Gen Y Plan­ning, an ad­vi­sory firm fo­cused on clients in their 20s and 30s.

Al­though many young adults de­lay a home pur­chase, Dixon in­sists they’re just as mo­ti­vated as their par­ents were to own — par­tic­u­larly once they com­mit to a job and metro area they like. Re­search from the Na­tional As­so­ci­a­tion of Re­al­tors in­di­cates that many mil­len­ni­als as­pire to own prop­erty as soon as they’re fi­nan­cially able.

Dixon ad­vises her sin­gle clients to be even more con­ser­va­tive than mar­ried pur­chasers with dual in­comes. That’s be­cause sin­gles rarely have a sec­ond in­come to fall back on if they can’t meet their mort­gage pay­ments.

Here are a few point­ers for sin­gle buy­ers:

Avoid max­ing out on your mort­gage

Among home­own­ers who faced fore­clo­sure dur­ing the down­turn were many who used an ad­justable-rate mort­gage, or ARM. At the in­tro­duc­tory “teaser rate,” they were com­fort­able han­dling the pay­ments. But once their ARM ad­justed up­ward, they were in trou­ble.

Mer­rill Ot­twein, a real es­tate bro­ker who spe­cial­izes in re­lo­ca­tions, says many past prob­lems with ARMs were the fault of lenders who failed to fully ex­plain all the terms. But in other cases, bor­row­ers were to blame for overex­tend­ing them­selves. He says nu­mer­ous own­ers might have avoided fore­clo­sure had they taken a tra­di­tional fixed-rate mort­gage.

Con­sider a prop­erty a room­mate might share

You may be one of those young sin­gles who longs to be free of room­mates. Even so, Ot­twein says it might be wise to choose a prop­erty suit­able for a rent-pay­ing room­mate, just in case.

“Just know­ing you have the right sort of house to share can re­lieve a lot of home­owner anx­i­ety,” says Ot­twein, a for­mer pres­i­dent of the Na­tional As­so­ci­a­tion of Ex­clu­sive Buyer Agents.

Sin­gle buy­ers who wish to keep open the op­tion of hav­ing a room­mate should make sure they choose a prop­erty with an ex­tra bed­room and at least two bath­rooms.

“Lo­ca­tion and floor plan are the key fac­tors,” he says.

Look for en­ergy ef­fi­ciency

Mar­garet Smith, a cer­ti­fied fi­nan­cial ad­viser, says that many young sin­gles are un­pleas­antly sur­prised by the size of their util­ity bills in their new homes. But she says more young buy­ers are now shop­ping for en­ergy-ef­fi­cient hous­ing.

To es­ti­mate the en­ergy costs of a prop­erty, she rec­om­mends buy­ers ask the cur­rent own­ers for copies of their util­ity bills, ide­ally go­ing back two years or more.

Also, Ot­twein rec­om­mends you ask your home in­spec­tor to as­sess the en­ergy ef­fi­ciency of any prop­erty. Have the in­spec­tor check for en­ergy-ef­fi­cient win­dows, as well as in­su­la­tion through­out the home.

Keep your friends in mind

If you’re like most sin­gles, hav­ing a vi­brant so­cial life is a top pri­or­ity. Smith says you don’t have to live in the same neigh­bor­hood as friends. But you won’t want to lo­cate your­self so far away that your only reg­u­lar con­tact is through so­cial me­dia.

“There’s lit­tle worse than buy­ing a home where you’re stuck out in the mid­dle of nowhere, stranded from your net­work of friends,” she says.


Young, sin­gle clients should be more con­ser­va­tive than mar­ried home­buy­ers with dual in­comes, one ex­pert said.

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