What pops into your head when you hear the term “millennial”? Is it a joke about avocado toast or skinny jeans? If you are a millennial, are you tired of the jokes already?
When I hear the term “millennial”, I think of first-time home buyers. According to NAR’s 2020 Home Buyer Generational Trends Report, 86% of Younger Millennials and 52% of Older Millennials were first-time home buyers last year; that’s more than any other age group. It makes sense – Millennials are in their mid-20’s to early-30’s with many things in life getting started: careers, families, investments, et cetera.
As you may know, being a first-time home buyer can be stressful and scary. In fact, about 40% of Americans say buying a new home is the most stressful event in modern life (and 30% admitted they shed a few tears while buying their first home). Many say that going on a job interview, hosting Thanksgiving dinner, and applying for college are all less stressful life events than buying a home. This doesn’t surprise me – buying a home is often the largest purchase you will ever experience in your life!
So, how do you get through it? First, do not believe the memes that say Millennials will never be able to own a home, and second, learn about what is involved in the process so when the time comes you know how to prepare and what to expect.
What do you need to have prepared before you start the process?
- Prepare your credit
- Prepare your savings:
- $$ for a down payment
- $$ for home and termite inspections
- $$ for closing costs
- $$ for moving costs
- $$ for the unexpected (broken plates during move, new paint for home, caulk, etc.
- Take time to get clarity on what you really want.
What should you expect before you start the home search?
- Hire an Agent!
- Lenders require a large amount of financial information before they can approve you for a mortgage. You’ll need:
- A credit report
- Financial statements
- Paystubs
- W-2s
- Investment and retirement paperwork
- See all paperwork for the process pictured below
- Know how to pick the “right” house
- Expect competition. This is a Seller’s market which means many homes for sale have multiple offers you’ll be competing against.
- You may consider waiving contingencies (inspection, appraisal, etc.)
- Resist the urge to spend more than you can afford on a home; you don’t want a monthly mortgage payment you can’t pay.
- Anticipate it may take longer than you expect it to. In fact, 38% of first-time home buyers said the whole process took much longer than they thought it would.
What should you expect after you are under contract?
Preparing for closing is not just about waiting. You’ll need to complete a few things before you close:
- Have your home appraised
- Lenders require appraisals because they can’t loan out more money than a property is worth.
- Complete home and pest inspections
- An inspector provides you with a report that lists everything that needs to be repaired or replaced on your property
- Lock in your loan
- Closing usually happens between 20 and 30 days after you ratify a contract, so expect to work on your patience
For all my Millennials out there (and all other home buyers), the process can be a bit scary, but knowing what to expect, and having a great Agent who will guide you and help you along the way, can make all the difference. It’s true, many of my first-time home buyers shed tears, too, but they are tears of JOY! Let me see you through the process and help you realize your dream of home ownership.
Warmly,
Arynne
PS: Not sure if you’re quite ready to move to your next home just yet? No problem. The sooner you start learning the ins and outs of this process, the better. Click here to book a real estate possibility call with me today.
