Smart Moves by Ellen James Martin


Escalating home prices in many metro areas have brought new urgency to the quest for first-time homeownership among young adults who worry that, as renters, they're losing ground financially.

"The problem is there's a huge trend toward everyone wanting to live urban. Because of that, a lot of affordable housing is getting sucked out of close-in neighborhoods where young people want to buy," says Jane Fairweather, a top-selling real estate agent in the field for more than 20 years.

In especially popular urban neighborhoods, she notes, builders are even tearing down older homes to make way for new, higher-end properties.

"In many prime areas, the entry-level house is going away," she says.

One proven approach to housing affordability for first-timers is to accept a property in "as is" condition. The best choice is a place that requires only cosmetic improvements, such as painting, that buyers can do themselves immediately or minor improvements, such as new kitchen flooring, for which they could hire contractors in coming years.

"You may need to take a house you don't like now but that you can make into your dream place going forward," Fairweather says.

Here are a few other pointers for homebuyers:

-- Take your time before making a final selection.

Even an alluring, well-priced property isn't a good deal if it's poorly located, says Michael S. Knight, a longtime financial adviser affiliated with the Garrett Planning Network (

Knight urges homebuyers to make sure they consider neighborhood alternatives before settling on one area or property.

"Often people select a neighborhood too quickly," says Knight.

To help with your due diligence, he says it's smart to talk with an agent who specializes in the sale of real estate in each neighborhood on your short list.

Which communities are most likely to hold or gain value in the future? Ashley Richardson, an agent affiliated with the Council of Residential Specialists (, says access to high-quality schools is one critical factor.

"Strong schools anchor property values," Richardson says.

What's more, she says buyers of all ages want to live in an area with quick access to stores and restaurants.

"Look for a neighborhood with a nearby Starbucks or other coffee shop. Many people love to take a Sunday morning stroll for coffee," Richardson says.

How can you quickly tell if an area you're considering is pedestrian-friendly? One way is to visit a website that rates communities with "walk scores." In many cases, this website will also give you a neighborhood's "transit score" and "bike score."

-- Hunt for a deal from sellers who are highly motivated.

Richardson recommends that buyers searching for a good deal consider homes that have languished unsold for multiple weeks, usually because they were overpriced when they first hit the market.

"After about three months, many people are exhausted with the selling process and the need to keep their place clean all the time. At that point, they become much more flexible on price," she says.

Some of the most motivated sellers are those who've already moved. If a property is nearly vacant, or there are no clothes in the closets, you can normally assume its owners have moved. To learn more, pose polite inquiries to neighbors living near the place.

"Stop by on a weekend when you're likely to find local residents out in their yards. Tell them you like their neighborhood and would appreciate knowing more about for-sale properties there. If you're polite, most people will try to help you," Richardson says.

-- Search for a property suitable for your future needs.

In some up-and-coming areas near vital cities or town centers, property values are ascending nicely. But even there, Tom Early, a real estate broker who was twice president of the National Association of Exclusive Buyer Agents (, advises against buying for the short term.

"It's true that most real estate markets have strengthened in recent years. But from a financial standpoint -- and due to high transaction costs -- it's always safer to buy a place where you could live comfortably for at least five to eight years," says Early.

-- Check out nearby market values before committing to a purchase.

Once you've narrowed your focus to a single home in a desirable neighborhood, you may feel ready to make an immediate bid. But before doing so, Richardson says it's wise to obtain information on recent sales in the area.

"It's not only sellers who should review the numbers on comparable home sales. Buyers also need statistics about recent sales for like properties to avoid offering too much," she says.

To assess the current market value of a property you wish to buy, ask your agent to give you numbers on at least three similar homes in the same community that have sold recently -- the fresher the data, the better.

What if you're competing with others for a place in a highly desirable neighborhood? In that case, Richardson says you may wish to add a small monetary sweetener to increase your odds of beating rivals.

"Just $1,000 to $2,000 might make all the difference, and that amount will be inconsequential over time. But don't go overboard, or you'll regret it later," she says.

(To contact Ellen James Martin, email her at