What Exactly is a Starter Home

Everyone needs to start somewhere, and for most people looking to purchase a home for the first time, that likely means you will be looking at a starter home.

But, what exactly is a starter home? To be fair, the term “starter home” can be representative of both a vague and broad explanation of a home typical for a first time home buyer. Traditionally in real estate a starter home is 1-2 bedrooms, although 3 bedrooms are also common. The home will also likely have 1-2 bathrooms. The home is generally smaller, with fewer than 1,300 square feet. However, these are the general characteristics. What really makes a starter home a starter home is affordability for the majority of home buyers.

Currently, on Long Island, a starter home would be considered around the price-point of $250,000 or less. Of, course this is highly variable according to the economy, season, and many other factors not-withstanding the home itself. However, as of the writing of this article, $250,000 is a good starting point.

Starter homes can come in as many styles as you can imagine. Older parts of Long Island may offer Victorian homes, and new developments may offer townhouses or condominiums.

With an economy which is becoming more stable, growth into major metropolitan areas has increased as people are trying to relocate closer to where they work, or find a home that is in what I like to call a “personal hub”. This means that the home is within a couple blocks of schools, work, and a shopping center.

For a homebuyer looking at starter homes this can be both positive and negative. If you are looking at finding a starter home within the center of an urban area such as New York City, you may have difficulties, as affordable starter homes are scarce. However, a new trend within cities in the U.S. has begun to re-zone previously commercial areas into residential, specifically focused on new starter home developments.

However, as a new home buyer, many opportunities exist in suburban, and older areas that offer both unique and affordable single-family starter homes.

Some things you may want to think about when looking for a starter home are:

·         Affordability: Many people can’t wait to buy a home. However, as seen with the housing bubble, many people stepped into the role of home ownership well before they should have. Anytime you make a large purchase such as a home, make sure you are financially able to purchase a home. Getting your personal finances in order and going through the pre-approval process are two important steps.

·         Maintenance Costs: In addition to affordability you should look at potential maintenance costs of the home. As the home will be in the lower price-range of many homes you may find a lot of “fixer-uppers”. To many people this is appealing. You have the ability to put your personal touch on the home, as well as add some sweat equity. However, it is important to weigh how much these costs will be, and assume those costs with the overall purchase price. You don’t want to buy a home and find you don’t have the money to fix it.

·         Location: Location is always important. From proximity to work, resell abilities, and if the neighborhood fits your future plans.

·         How long you will live there: The number of years you are planning to live at the home is important. This is mostly in regards to your future. For example, if you are planning on having children in the next year, but your home has only one-bedroom, the home may not be suitable to your needs. However, if you are not planning to have children for the next five years, then that same one-bedroom home may be ideal.

·         Room for growth: Is the home equipped for an expanding family, or is there room to physically add onto the house to adjust for a growing family or needs.

·         Does it have universal appeal: As a starter home, you may not be looking at living in your home for more than five years. Having a home with universal appeal helps your home become more saleable when you are ready to sell. So the question you want to answer is: Does my home have universal appeal, or is there enough to add universal appeal while I am living here?

·         Investment potential: The good thing about a starter home is affordability. With that, you may want to consider turning your starter home into an investment rental property once you move to a bigger home. If this is important to you, you may want to find out current rental trends and restrictions to see if this is a possibility in the area where the home is.

The Fair Housing Act – What Your Real Estate Agent Can and Cannot tell you

Have you ever asked your real estate agent specific questions about a neighborhood, or perhaps asked which neighborhood is better, only to be met with an awkward glance before you were directed to go to the community’s website?

There is a very good reason your real estate agent didn’t answer your questions, and it isn’t because they were being rude, or didn’t know. The reason your real estate agent didn’t answer your questions and won’t answer them is because of the Fair Housing Act. The Fair Housing Act was put in place to prevent “steering” of home buyers to certain areas and neighborhoods.

All real estate agents will be well-versed in what steering is, ad all real estate agents should take the Fair Housing Act very seriously.

What your agent cannot tell you

While many people think steering is solely directed at race, there are many more protected classes involved, and agents should be forthright in saying what they cannot advise you on. Whether the information would be based on opinion of factual data, it is up to the home-buyer to seek out the information on their own. An agent cannot inform, advise, or suggest to you on any of the following:

• Race
• Color
• National Origin
• Religious Preference
• Sex
• Familial Status
• Handicaps

In addition, and subject material which can allude to or possibly broach on the subject should be avoided. This would include almost any demographics available. The agent will also not provide information on preference of areas or neighborhoods. 

What your agent can tell you

The laws are in place to ensure that all home buyers have the ability to make a reasonable and conscious decision, without the bias of a third-party swaying them in any direction. Most subjective questions will not be answered by your agent. However, a good agent is not only fully aware of their limitations, but will have done their own homework and can provide you with links, information, and suggestions on where you can find out the statistics yourself.

Remember that buying a home is a collaborative relationship between you and your real estate agent. The agent is responsible to help find a home that fits your basic house criteria, and arrange to view the home as well as purchase the home. However, they cannot offer advice or suggestions that could lead to steering you to, or away from a home or neighborhood. 

5 Things to Consider when Deciding on the Right Neighborhood

Every home owner has their own take on what neighborhood is right for them. Some homeowners may want historic charm, while others want a family-oriented, and some may want both. Depending on your interests, you likely want to find a neighborhood that appeals to you and holds your personal values and tastes. For many people, the neighborhood is as important, if not more important than the home itself.

However, choosing the right neighborhood can be more difficult than actually choosing the home. While many of the neighborhoods highlights can be found out with a simple drive-around, other aspects will require a bit of digging.

Here are some tips to help you make the most of choosing a neighborhood:

You and your interests

Every neighborhood is different and there are literally hundreds of options in the Long Island area to choose from. So, when you are searching it only benefits you to choose a neighborhood that offers amenities based on your family’s needs and interests.

• Children: Children play a big role in where you live. So, making decisions based on schools in the area. How close do you want to be to an elementary school or high school? Do the schools offer courses or extra-curricular activities for your children? 
• Types of homes: For many people the type of home makes a difference. Do you prefer a home that is 100+ years old, or do you prefer to live in a newer development?
• Like-minded neighbors; Do you want a quiet retirement neighborhood, one that is family-oriented, or a younger neighborhood, more vibrant neighborhood?
• Parks and trails: If being outdoors means a lot to you, then a neighborhood with several parks, and hiking or biking trails may be something you want to look for. In addition, are waterways, lakes, and rivers.
• Special Interest Amenities: Another factor to consider is, does the area have interests more specific to your taste. For example, if you play tennis, is there a tennis club nearby? Do you enjoy going to the theater, or museum? Are you looking for a neighborhood with art galleries?

Neighborhood data

All cities publish information on each neighborhood and community. It is illegal for your real estate agent to offer advice, information, or suggestions on each neighborhood, or offer advice on what neighborhood would be better for you. However, this information is public and accessible to all home-buyers. Some data and statistics you may want to review are:   

• School information
• Crime statistics
• Park and recreational areas
• Neighborhood associations
• Tourist attractions, local attractions, and restaurants

The drive-thru

What was your first impression when you drove through the neighborhood and can you see yourself in the neighborhood. You may need to use your imagination a bit to visualize what living there would be like.

Does the neighborhood offer unique restaurants and services you would use? Do rush-hours affect the neighborhood? Do people smile and wave? Is it more congested than you expected, or is it too quiet for you?

Few things can help you determine a potentially new neighborhood better than driving through it at different times of the day.  

Proximity

You will likely have to travel outside your neighborhood for a variety of reasons. Work, visiting family and friends, or recreational activities. How does the location fit with all these activities and are the neighborhood’s amenities good enough that you are willing to forego close proximity, if need be?

Affordability

Lastly is affordability. Simply, can you afford to live in the neighborhood you want to live in, or are looking at houses in. You should look at not only home prices, but also travel time, local taxes, utilities, and everyday prices. For example, depending on what grocery store you shop at, you may be paying a premium of 30% or more for the same item you might buy at a less expensive grocery store. You are more likely to shop at the closest store to you, than drive twenty minutes down the road. These smaller purchases may not seem like something to look at now, but in a few months when you realize you are more willing to spend money than sit in traffic to get your food, you might second guess your initial thought on where you purchased your home.