Smart Moves

Tips for Young, Single Buyers

After divorce ended her very brief but unhappy marriage, a filmmaker felt more celebratory than sad. Without a spouse to challenge her plans, she could finally fulfill her dream of owning a small cottage on a creek near Annapolis.

Given her substantial savings and solid salary from an academic medical center, the filmmaker was able to purchase a compact but stylish contemporary house with waterfront views and boat access. The closing went smoothly, and the woman’s move won the admiration of both family and friends.

This true story doesn’t surprise Andrew Cherlin, a sociology professor at Johns Hopkins University. A half-century ago, he says most Americans bought a home only after marrying, and those who didn’t wed first were considered “weird.”

“Fifty or 60 years ago, if you weren’t married, people thought you were mentally ill. People thought marriage was the only way to live a successful life,” says Cherlin, an expert on the demographics of marriage and divorce.

Of course, not every unattached person who aspires to homeownership can fund a purchase solo. Nowadays, two healthy paychecks are often necessary to cover the cost of buying in many prime neighborhoods. Compounding the affordability problem, a shortage of inventory -- especially in the starter home segment -- continues to push up prices.

Arlen Olberding, a certified financial planner who counts a number of young singles among his clients, says it's often wise for people with unsettled career plans to postpone homebuying. For example, many singles who expect to make a near-term job change or to soon head back to graduate school should delay.

“Solo buyers are more vulnerable to potential foreclosure if they encounter a layoff,” says Olberding, who’s affiliated with the National Association of Personal Financial Advisors (napfa.org).

Here are a few pointers for single buyers:

-- Choose a place within your financial “comfort zone.”

Merrill Ottwein, a veteran real estate broker, cautions all buyers -- but especially young singles -- against taking on a mortgage that feels uncomfortably large.

“Decide on your affordability target right from the start, before you go home shopping. After that, don’t let your real estate agent or lender inch you up above your comfort zone,” says Ottwein, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

Although lending standards remain stringent, he says it’s still very possible to obtain approval for a mortgage that’s larger than you can reasonably handle. That’s because lenders only see the big picture, and don't factor in all the daily expenses of modern life.

“Being ‘house poor’ is an awful way to live, and can cause lots of fear and anxiety,” Ottwein says.

-- Look for a home a roommate could share.

If you shared dorm space back in college, you may be in no mood to share the home you buy with a roommate who pays you rent. Still, Ottwein encourages young singles to seek a property that would be attractive to a potential housemate -- should they one day need rental income to help offset their mortgage payments.

“Also, a house with two or, ideally, three bedrooms will be easier to sell when you decide to do so,” he says.

What type of home works best for accommodating a roommate? Ottwein suggests a place with a second bedroom suite that includes a private bath, so a roommate could live more independently. Also, an outside entrance to this second suite is ideal.

-- Choose an energy-efficient property.

After moving in, many first-time buyers are surprised by the size of their home upkeep expenses. They hadn’t expected to spend so much for everything from electricians’ bills to mulch for the garden. The size of their energy bills also comes as a shock.

Obviously, some costs associated with homeownership -- such as taxes and insurance -- are unavoidable. But home shoppers can more easily contain their energy expenses by choosing a property that’s well insulated and has substantial, double-pane windows.

“Unless you buy an energy-efficient home, you’ve got a big risk for rising power costs looming ahead,” Ottwein says.

He encourages first-time buyers to educate themselves on the topic of energy efficiency housing by going online. One website that provides information on the subject, energystar.gov, is sponsored by the U.S. Department of Energy, along with the U.S. Environmental Protection Agency.

Also, make sure you ask the home inspector you hire to evaluate the energy efficiency of any property you plan to buy in advance of a final commitment for its purchase.

-- Don’t let homebuying constrain your social life.

You don’t have to live in the immediate vicinity of your friends to stay in touch. But if possible, you’ll want to avoid buying a property many miles from your closest friends, even if that’s the most affordable option.

“Buying a nice house is a wonderful goal, but so is maintaining friendships that can last a lifetime and support your happiness and well-being,” Ottwein says.

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

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