Smart Moves by Ellen James Martin

TIPS FOR FIRST-TIME BUYERS

If you've lived in a cramped apartment for years, your sense of excitement is likely palpable as you start the search for your first home.

But real estate specialists caution first-time homebuyers against making a hasty decision.

"The odds are that every single-family house you visit will seem huge compared with your apartment," says Tom Early, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

"It's not inconceivable you'll find the absolute right house on your first outing. But before you commit, you'd better compare and contrast your options," Early says.

He suggests all purchasers consider resale potential before making a property selection.

"As they move across the age spectrum, young adults are very likely to make a second and third home purchase. That's why they must be super aware of resale values," Early says.

Here are a few pointers for buyers:

-- Look for a community that should appeal to future buyers.

A poll recently conducted by the National Association of Realtors and Portland State University offers clues about emerging homebuyer preferences. The survey found that young adults age 18 to 34 strongly favor living within walking distance of shops and restaurants. They also favor short commutes and public transit.

"If you can afford a house in a vital, walkable urban area or town center, more power to you. You'll be investing in a place that's likely to hold its value or appreciate nicely in the future," Early says.

-- Seek a place with your future lifestyle in mind.

First-time buyers sometimes make the mistake of expecting to keep their property for just a few years before moving on.

But Early, a longtime real estate broker who specializes in helping buyers, strongly advises clients to buy with a time horizon of at least five years, due to the high transaction costs associated with selling one house and moving to another.

Young buyers should also consider their personal plans when selecting a house.

"If you're thinking of having kids in the near future, for instance, it's a good idea to pick a house with extra bedrooms and play areas," Early says.

Even if you end up not having children, choosing a property suitable for a family with kids will help increase buyer interest when it's your turn to sell.

-- Resist the lure of an offbeat property.

"You don't want to buy a contemporary in a neighborhood full of colonials," says Mark Nash, author of "1001 Tips for Buying and Selling a Home."

The problem with what Nash calls "the odd-man-out house" is that it could be hard to sell when the time comes.

"We live in a society where housing is increasingly homogenized. Most people feel safer about their investment if the place they buy looks like all their neighbors' homes," he says.

-- Create a list of priorities to better evaluate your housing choices.

"Nearly everybody has to make trade-offs when they buy a home," Early says.

Early's more than three decades of experience have taught him that purchasers who write down their priorities are less likely to err.

Before you go home shopping, Early encourages you to compose two lists. One should itemize "must have" home features and the other should be a "wish list" including features you could live without if trade-offs must be made.

-- Don't buy the biggest house in the neighborhood.

Some buyers are unaware that it's a bad idea to choose one of the biggest houses in a neighborhood. But Early explains that the so-called "king on the hill" house is unlikely to gain as much value as an average-sized place in the same area.

Granted, the biggest house will likely appreciate --assuming it's located in a popular area. Still, its owners will get less of a boost in value on a per-square-foot basis than will the owners of a smaller house. That's because the median home will set the standard for the area.

-- Make your home inspector's report part of your home-selection process.

An increasing number of buyers are covering the cost of a professional home inspection to help identify potential defects in the property they've selected. Realtors applaud this trend and generally support the involvement of independent home inspectors.

But agents also note that occasionally first-time buyers will go forward with a home purchase despite an inspector's report that outlines worrisome faults.

Early says that buyers who encounter major problems with a property, such as trouble with the foundation or unsafe electric wiring, are often well advised to simply walk away.

"You've got to let go emotionally of any house that's a serious fixer-upper—unless you're extraordinarily handy," he says.

-- Resist pressure to make a hasty decision.

As Early says, a good real estate agent will listen attentively to buyers when they express housing needs and preferences. The agent should also show diligence in pre-screening properties that seem well suited to the buyers' needs.

But buyers should be wary of any agent who tries to pressure them to take a particular house, especially one they're ambivalent about.

"The right agent is one who respects your time, your money and your priorities," Early says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)