With your June wedding coming up, the presents are probably coming in. Most likely, they include some pretty hefty checks. Now our area Realtors are advising you on the best ways to put those cash gifts to good use, in helping you buy your first home. And thanks to this current buyers market, you could hardly find a better time to do so. Heres what these experts had to say:
They decided to downsize the wedding …
Martine Irmer, Long & Foster, Old Town Alexandria
I have clients who opened a special account when they got married and asked the guests to deposit money in it, to help them buy a house. They even decided to downsize the wedding, so they could get more for their bank account. They did that instead of registering for gifts, because they had many of the things they needed anyway.
They were really pleased with the result: $7,000 in escrow to buy the home.
They are now out of the country in the military, but they will buy the house when they get back. Their parents also gave them some money, so they can use the $7,000 for closing costs, and they will be looking for a $450,000 home. We can get them into something really nice, like a two-bedroom condo or a cute little brick townhouse in Old Town, near the Metro.
It may be too small for a family … but when they are ready they can sell it for a bigger house. It is always easier to buy your second home, because you have credit established.
The earlier you can buy something …
Bonnie Rivkin, Coldwell Banker, Alexandria
It is a good idea if you start a home (buying) fund, with friends contributing to it instead of buying gifts. The earlier they can buy something, the better off they are, because once you have bought a home, it is easier to move up.
The first thing they buy could be a condo at $300,000 to $350,000, with two bedrooms and one bath, or even one bedroom and bath. It might not be brand new, but it is available in this market. If you want to look in Alexandria, there are places in Old Town and near Landmark Mall. It depends on where they work and how you plan to get there: If they need to be near the Metro, for instance.
I think you should plan to stay in your first home for two years at least, because you can get the tax deduction on your resale profit, up to $500,000 for a couple.
They should start by finding a really good mortgage broker who deals with several banks and can help them shop around.
The best time to buy …
Weichert, Realtors, Alexandria
The best time to buy is between Thanksgiving and New Years, because home sales are always slower during the holiday season. Historically speaking, sales drop by 30 percent on September 1, then another 35 percent on October 1 and then down to almost nothing the week before Thanksgiving.
During that time, they should be saving their money … unless, of course, the right house comes along and then they should not pass it up, because it may not be on the market again. They should also be looking to see what is available and deciding where they want to live.
If they plan on having a family, they should look for a place with better schools, so they can help themselves financially by avoiding another move, when the children reach school age. Even if they dont have youngsters, the good school district will help sell the home.
If they do have children, he added, they should look especially hard for the best elementary schools. He explained, They will probably have more money by the time the kids are in high school, so they can better afford a move-up home.
Based on his own 35 years of experience, he also said, They should also shop around for a good mortgage broker and a Realtor who is experienced in negotiating for them.