First-time buyers, I’m sorry to be the one to tell you this, but your first home will (more than likely) NOT be your dream home.
We’ve all dreamed the American Dream of owning our very own home. For many, that dream has morphed into the HGTV dream, which includes sparkling countertops and appliances in an open-concept kitchen, plenty of outdoor space for entertaining or for a dog and kids to enjoy, off-street parking and yes, a walkable location in the heart of the action. Who wouldn’t want these things? I know I do!
It’s easy for us, as buyers, to get ahead of ourselves and:
• search fruitlessly for a home that doesn’t exist;
• stretch your budget to an uncomfortable level to keep up with your idea of what your first house or forever home should be;
• or put off buying until you can afford to buy “The Dream House” when you are making more money down the line, get married, have kids, or whatever it is you are using to justify the decision to wait to buy a house.
I see this scenario time and again with many of our first-time buyer clients. They beat themselves up because they can’t afford their dream house, so they wait. Interest rates go up, the market improves, then they are in the same boat a few years later when they come back to explore buying the next time around.
I’m here to tell you some advice that might be hard to swallow for my fellow millennials. If you can realistically afford to, pull the trigger and buy a home that is comfortably within your budget to get your foot in the door of homeownership. Yes, even if that house is smaller than you imagined, has avocado green tile and mustard yellow appliances, or isn’t in the exact neighborhood where all of your friends are renting.
Why you ask? It’s simple. Homeownership is proven to be one of the best ways to set yourself up for a strong financial future, especially in the relatively stable D.C. metro area. Instead of writing a rent check to your landlord, you can pay a similar amount for a mortgage — with a big chunk of that payment going to pay down your equity. You are basically paying into a built-in savings account for yourself. Not to mention, you will start seeing a much better tax break from Uncle Sam.
Some may argue that you should wait and save until you can afford a house that you will be in for many years to come – and maybe you should. It really depends on your individual situation. But for most first-time buyers, the reality is that they will NOT be in the same house for many years to come. Maybe they know they will leave the area, or know they will want to have kids (or more kids) and need more space or a different school system, or know they will be making a lot more money down the line. The point is, people’s lives, needs, tastes, preferences and finances change over time – and their homes usually change with them.
So, brace yourself and buy a house that’s a sound financial investment, even if it isn’t that sexy first home you envisioned. Get your hands dirty and make it yours. In a few years, you’ll have paid down your mortgage enough to buy something a little bit bigger and a little bit better.
My advice? Be different. Be smart. Be a homeowner and set yourself up for financial freedom in the future.
Allison Goodhart DuShuttle is lead agent for The Goodhart Group, Alexandria’s and McEnearney Associates’ top-producing real estate team. In 2015, she was nationally recognized by Realtor Magazine, being named to its “30 Under 30” club. Reach her at 703-362-3221 or email@example.com.