Millennials — adults born between 1980 and 1998 — may face more hurdles to homeownership than Gen Xers or Boomers did in the past. However, thanks to historically low interest rates and the ability to adopt a smart buying-strategy, homeowner-ship in Hawaii is, in fact, attainable.
Here are Locations’ top 10 tips for prospective homeowners (of any age!):
- Find a full-time, ‘great’ real estate agent.
A good real estate agent will find you something. A great real estate agent will understand your needs, educate you on the homeowner-ship process, and help you land the best home for you in Hawaii’s competitive market.
- Get your finances in order.
If your credit score is less than ideal or you have outstanding debt, pay down what you can — without signing up for any new credit cards — and hold off on big purchases, like a new car.
- Get pre-approved for a loan.
You won’t know how much of a home you can comfortably afford until you talk to a home loan officer. In the current market, sellers require purchase offers to have a pre-approval letter attached.
- Set your down-payment budget.
Many first-time homeowners are surprised to learn that a 20 percent down payment is no longer necessary. Home loans are available with 10 percent, 5 percent, 3 percent or even zero percent down, if you qualify.
- Prioritize what is important to you.
Consider your lifestyle and priorities. “Many Millennial buyers enjoy the convenience of metro Honolulu,” said Scott Higashi, CEO of Locations. “While a condominium in the urban core may cost you more initially, you may be able to go without a car and save time not being stuck in traffic. Younger buyers, in particular, take advantage of being able to walk or bike to work.”
- Think beyond the purchase price.
If you’re looking at a condo or townhome, be sure to check out the maintenance fees, as they can vary quite a bit. If you’re considering a single-family home, especially an older home, be sure you’re financially prepared should your home need repairs or new appliances.
- Have your home inspected.
As part of the Purchase Agreement that protects new homeowners, you have the opportunity to retain a professional home inspector to check out the structural components of your potential new home. While you may be tempted to skip this step, you should always have a professional evaluate the property to avoid costly repairs later.
- A first home doesn’t have to be a ‘forever’ home.
With a median price of $750,000 in May for a single-family home, Millennials may need to adjust their expectations for the type of home they can afford.
“Your first home can be your stepping stone to building equity and wealth, so when you’re ready for that bigger home in five to 10 years, you’ll be in a better position,” explained Higashi.
- Don’t wait for the perfect home.
There is no “perfect” home. Since your first home will likely not be your last, don’t waste time trying to find the perfect one because waiting in a market like Hawaii’s is expensive.
- Attend a Future Homeowners Seminar.
Get free, expert home-owning advice from a Locations real estate professional — you’ll have a leg up on your competition when you’re armed with a sound strategy.
For more tips for first-time owners and to sign up for a Future Homeowners Seminar, visit www.locationshawaii.com/seminar.