A survey captures in excruciating detail the ordeal faced by first-time homebuyers across the country as they deal with housing shortages.
Whether it’s missing days of work, spending free time checking listings or losing out on multiple homes, first-time homebuyers are sacrificing a lot to get their first home, according to a report from Open Door.
Almost 80% of first-time homebuyers missed out on two days of work during their search for a home, while 39% had trouble coming up with enough money for a down payment for a house. Almost all homebuyers had lost out on a home on which they’d bid, with some buyers putting in offers on ten or more homes, the survey showed. At least 37% of homebuyers said they had been outbid by other buyers.
The report surveyed over 1,000 first-time homebuyers in the United States.
Bidding wars, cash offers and low inventory have all led to a market that makes it increasingly difficult for first-time buyers to land a home, experts explained. Rising home prices also make it less affordable for many, forcing buyers into townhomes, condos or farther away from city areas.
“It’s a struggle when you have high property values for someone to get a home,” said Doug Leever, mortgage sales manager with Tropical Financial Credit Union in Miramar, Fla. “A lot of first-time homebuyers want to get into a home like their parents did, but because of the values out there, its hard.”
And higher home values can mean higher property taxes, something that first-time homebuyers should remember to budget for.
“A first-time Florida homebuyer should not look at the previous owner’s assessment and annual tax liability as a measure of what they can expect, especially in this market,” said Daniel Hudson, a partner with Berger Singerman, a business law firm in Fort Lauderdale.
Filing a homestead exemption could help them save money, he added.
A big issue for first-time buyers is that they aren’t experienced with what they need to look for in a home and how the process works, especially in this real estate market. With houses being snapped off the market in record time, buyers don’t have the luxury of counter offers, something first-time homebuyers don’t understand when they get into the market.
“They are more hesitant to make offers,” said broker Patty Da Silver with Green Realty Properties in Copper City, Fla. “And in this market you need to make your best and highest offer up front.”
Stephanie Barner, 33, said she looked at seven homes and lost out on one offer before she landed her two-bedroom, one-bathroom home in Tamarac, Fla. The process was stressful, though she found some relief with a realtor who helped with the search: Barner squeezed in showings on her day off and spent her extra time checking listings on various apps during the day.
For her home, she offered about $5,000 over asking, for a final price of $245,000, and chose a home that had good structure, but needed small updates on the interior.
“I was really nervous at first because I didn’t know what to look for in a home,” Barner said, but adds advice for newbies like her: “Just don’t get discouraged.”