First-time Home Buyers: How to Buy your first home without it being a Financial Sinkhole

First time Home Buyers How to Buy your first home without it being a Financial Sinkhole

First-time Home Buyers: How to Buy your first home without it being a Financial Sinkhole

One thing that the housing and mortgage crash that began in late 2006 made clear was that a home isn’t going to be a financial investment in the future.  While your parents or grandparents may have purchased a home decades ago and they’re sitting on major equity, that’s going to be much more of a rarity in the future.

Lifestyles have changed, and employment isn’t the decades-long home it used to be.  People are moving around more, and employees change jobs and even careers much more frequently now than in decades past.  With different estimates giving from 5 years to 8 years for a home purchase to break even after transaction costs, there’s less chance of people sitting in a home and building up substantial equity.

If a home isn’t going to be a financial retirement asset, then why buy one at all?  There are a great many reasons for ownership over renting, and with low-interest rates, buying is often a better short-term financial decision as well.  The more important consideration for the first-time homebuyer today is how to buy that home they want and not let it be a sinkhole for their cash assets.

New versus Existing Home

If you’re working with a builder who will give you a multi-year warranty on the major home components, then it could be a point in favor of buying a new home.  However, keep in mind that today’s appliances often don’t start having problems for years, often 7 to 10 years in the future, so a two-year builder warranty on the appliances isn’t really a big concession, especially when the appliance manufacturers are providing at least one year of that warranty.

If the builder is willing to provide a strong material and labor warranty on major structural components, such as roofs, then it could be a selling feature. You’re not going to get this with the purchase of an existing home.  Many home sellers will purchase a third party warranty policy for repairs to make their home more appealing to buyers.  However, there are restrictions, deductibles, and service charges in most cases, so it’s important to read the coverage.

The existing home, depending upon the age, could have deferred maintenance issues, and will just naturally have more repair requirements in the first five years of ownership.  Of course, if the neighborhood and other home features are what you want, just be sure to consider and budget for the repairs that will be coming in the future.  Consider any appliance or major heating and cooling equipment to be at risk of failure if they are 8 years old or older.

The Perfect Home versus the Smart Buy

Especially for first-time homebuyers, the excitement of finding that “just-right” home with every feature and all of the current bells & whistles can result in poor financial decisions.  Can you pass up a couple of features to save thousands of dollars?  Every dollar you save on that mortgage payment is several thousand dollars you’ll save in payments over the years.

Have more than one home you like before you make an offer.  You want to be in a stronger negotiation position because you have another option waiting, so you can walk away.  Getting that price down a bit will make many thousands of dollars difference over the years.  Don’t be afraid of bouncing several counter-offers back and forth to get the best deal.

Keeping these tips in mind can help you to buy a home you’ll enjoy for your lifestyle, but you’ll also have some money left over to save and for other investments.

Are You thinking of buying a Home in Tampa Bay?

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In the meantime, check out these 1 click searches:

Welcome to Avila, Tampa's premier guard-gated golf and country club community! This stunning custom villa is situated in Sedona, a private enclave within Avila. The bright, open floor plan features 4 bedrooms and 3.5 baths, with the fourth bedroom serving as a separate guest cabana complete with a full bath. Upon entering through the iron gate, you'll find yourself in a tropical paradise, featuring a spacious screened outdoor lanai area with a charming wall fountain. Past the double French door entry and foyer, you'll be greeted by a large formal living room with a gas fireplace and a formal dining room, elegantly defined by impressive columns. The updated kitchen and breakfast area open up to a spacious family room, all overlooking the breathtaking lanai and guest cabana. Off the living area, a large primary suite offers dual closets, dual sinks, a vanity area, a shower, and a soaking tub. Upstairs, two additional bedrooms share a bathroom.
 Additional features include a separate golf cart garage, a private fenced backyard, RH chandeliers, a water softener, and surround sound. Enjoy the Florida lifestyle in this fabulous home, conveniently located within 25 minutes of Tampa International Airport, downtown, and the beaches, and just steps away from Publix! Built in 2000. $1,300,000 Pending

16614 Sedona De Avila Tampa, Florida

4 Beds 4 Baths 3,057 SqFt 0.220 Acres

LOCATION! LOCATION! LOCATION! This perfect 3 bedroom 2 bath home on a corner lot in the heart of Westshore Tampa is one you do not want to miss out on! Circular brick driveway provides plenty of parking in front of the home.  Front door opens up to a spacious mud room that features french doors that lead to large courtyard and huge fenced backyard that includes a storage shed. Split floorpan allows lots of privacy in this home.  The oversized primary bedroom leads to primary bathroom and indoor laundry room. The perfect kitchen features stainless steel appliances and lots of cabinet space.  The living room located off the kitchen is so cozy and leads to the bedrooms and bath on the other side of the home. Located minutes from the areas popular dining spots, International Mall, Westshore Plaza, entertainment and more!  This location is highly sought after for school zone offering schools such as Plant High School. Minutes from I275 and Gandy Blvd making travel quick and convenient. This is a wonderful home that is a MUST SEE. Call today to schedule your private showing. $549,000 Active

4401 W Sevilla Street Tampa, Florida

3 Beds 2 Baths 1,240 SqFt 0.110 Acres

Welcome to this absolutely outstanding move-in ready pool home, located in the stunning community of Magnolia Trace. Low HOAs and NO CDD! Upon entering this breathtaking home you'll be greeted by large open floor plan with exceptional high ceilings throughout and a flood of natural light throughtout. This gorgeous home offers a floor plan with just over 2600 sq. ft, of living space, 4 bedrooms, 3 baths, with a bonus office facing the front of the building, and a 3-car garage. With the master bedroom featuring an amazing en-suite with bathtub, his and her sinks, seperate shower, private toilet, walk in closet and private access to the pool. The interior of the home features high ceilings throughout large open floor plan which makes it amazing for guests, extended family members to come and enjoy special days! This home has numerous upgrades such as, new roof (2022), exterior/interior paint (2024), new luxury laminate flooring in office (2024), and vinyl fencing/ wood fencing. Along with the master bedroom having private pool access the guest room bathroom also has private access to pool which also features amazing double doors coming from the dining area with vaulted ceilings entering directly out to the pool with waterfall and screened lanai with two outside entrances to left and right of the home! This home is truly one-of- a- kind! It is located near top rated schools, New Tampa Library, parks, shopping centers, New Tampa Little League Complex, nature trails, and easy access to I75. This home won't last long so please schedule your private showing today! $545,000 Active

10557 San Travaso Drive Tampa, Florida

4 Beds 3 Baths 2,626 SqFt 0.180 Acres

This is a great starter property in the still up and coming Seminole Heights area, where the apartment can make a portion of your payment, or a great two unit rental investment for the investor. Perhaps a builder wants to demo and build two brand new.   Great for a short commute to downtown Tampa.   Exact SF responsibility of Buyer to verify the information as the County Records sq ft indicates both home and apartment combined.  County records show home 1073 SF, apartment 468 SF.  Home has central heat/air, apartment has wall unit.   As well as the records show a 3 bedroom 2 bath.  Home is a 2 bed, 1 ba and apartment is a 1 bed, 1 ba.  Lots shows as 76 1/2 feet wide by 140 deep.  The rear does open onto the alley with a fenced in rear yard.  Can be opened appropriately to serve as a drive way entrance for the Apartment, utilizing just the front for the home.   Both units are currently rented (Month-to-month, with a 30 day or less evacuation plan in place).  The home and apartment are on separate electric and water meters. $474,900 Active

1307 E Norfolk Street Tampa, Florida

3 Beds 2 Baths 1,458 SqFt 0.250 Acres