It’s just past noon on an icy-cold Sunday in January, and Ric Phillips and Kathleen Brady are huddled with their real estate agent in the parking lot of a cluster of townhouses in Mundelein. Far from their apartment on Chicago’s Lake Shore Drive, they are busy considering how far they also might be from their current lifestyle if they buy one of the units in the northern suburb.
The distance that Ric and Kathleen have come is far greater than what the odometer on their dashboard indicates. As first-time buyers, their journey began long before they left home. For that matter, it started before they found a real estate agent or looked at their first property. And while much of the ground they covered to get here doesn’t appear on any area map, real estate professionals agree it’s the route that all first-time buyers should take.
Regardless of where the road to homeownership may end, shopping for a home begins with establishing priorities. What are the issues that first-time buyers need to consider before they set foot out the door in search of their dream home? (See “Math test: Do your finances add up to a home? In last Friday’s Your Place.)
Area real estate agents cite these priorities: location, size, type, style and price range. It’s the degree of importance shoppers assign to each, these experts say, that will determine where first-time buyers eventually hang their hats.
“Location is one of the very first things buyers need to consider,” says Dianna Lehnen, an agent with Prudential Preferred Properties in Naperville. “Is being close to your job a priority, or is having the lifestyle you enjoy more important? Maybe the home itself is most important,” Lehnen continues. “You might be willing to drive an hour or two to work, or even take the train, because you’ll probably get more house for your money the farther out you go.”
Most first-time shoppers have definite ideas of which areas or communities they are willing to consider. But for those who don’t, Bob Parris of Coldwell Banker in Evanston offers a checklist. “Figure out where the center of your activity is located,” says Parris, who is Ric and Kathleen’s agent. “Where are your friends and family? Where do you work, eat out and shop? Consider the ambience of various neighborhoods or communities, such as the average age and typical lifestyle of the residents. Go where you’ll be comfortable.”
Marissa Manos, an agent with Baird & Warner’s City North office in Chicago, agrees. “In my experience, most first-time buyers have been single and they want to keep their single lifestyle. They want access to the things that are important to them.”
Deciding what’s important to you is central to determining the size and shape of the home you’d like to buy. Lehnen suggests that shoppers sit down and make a list of the features they desire. “Do you want a garage, a formal dining room or a fireplace?” she asks. “Put all of the things you’d like in a home that are within reason and prioritize them. Maybe you’ll decide the garage is more important than that fireplace you always wanted.”
“Many buyers come to me with a wish list. Whether or not it’s realistic. . .,” Manos cautions. “People sometimes wind up with something very different than they think they are going to buy when they first come in.”
Merle Kirsner-Styer, an agent with Kahn Realty in Highland Park, says first-time buyers also should consider the particular demands of their daily routine. “Buyers need to identify how they live,” she says. “For example, every morning my husband gets up hours before I do. So we wanted a place where, when he leaves the bedroom at 5:30 a.m., he doesn’t need to come back in–one in which his closet and the bathroom would be outside the door.”
Knowing the number of bedrooms and bathrooms you think you absolutely need, as well as all of the amenities your heart desires, doesn’t necessarily help to answer a key question: What type of home is best for you? Would you be happier in a condominium or in a single-family house?
“Condos and townhouses charge assessments to pay for the outside maintenance,” Lehnen points out. “If you really enjoy working outside and doing lawn work, why pay $120 a month for someone else to do that when the money could be put toward the principal of your mortgage? Similarly, there are many young professional people, both couples and single buyers, who don’t want the responsibility of doing exterior maintenance. Maybe they need to consider a townhouse, when they thought they wanted a single-family home.”
The amount of maintenance work you’re willing to do affects not only the type of home you eventually buy but also, to some extent, its style. The agents agree that for many first-time buyers this issue moves the preference for either vintage or newer construction out of the realm of pure aesthetics. Or, as Parris would ask his new buyers: Do you want something in older condition to fix up and make money, or do you want everything perfectly pristine?
Kirsner-Styer notes that for younger buyers even the definition of what’s vintage is changing. “For me, a vintage house is something built around 1920,” she says, “but that’s not the way young people today see it. For buyers who weren’t born until the mid-1960s or later, something built before they were born, even if it’s only from the 1950s or early 1960s, is considered old.”
Speaking of time . . . One question first-time buyers need to answer in the home-shopping process requires little deliberation: When does your current lease expire? How much in advance of that date should you begin to look in earnest for your new home?
“That depends,” Manos says. “If you’re looking for a needle in a haystack, you should probably start a year before. But if it is something that’s readily available, such as a nice condo at a realistic price, you probably only need about four months–two months to look and, after you’ve made the offer, another 60 days to close. That’s why people start looking after the first of the year if their leases will expire at the end of April.”
Lehnen agrees. “Some people think they need a year to look, but they don’t.”
What buyers typically do need is to secure financing–and not after they’ve already picked out a home and made an offer. Unfortunately, some first-time shoppers soon learn that they have just as much chance of finding a needle in a haystack as they do of purchasing a realistically priced condo in the area they want. Usually, it’s the realistic price that proves to be the obstacle.
If the going rate for a three-bedroom condo in a given location is more than the bank says you can afford, the best time to find this out is before you’ve wasted time measuring the kitchen or coveting the view. That’s why real estate agents recommend that first-time shoppers be “pre-qualified” before the shopping begins. It can be done over the phone with a lender or mortgage broker at no obligation. This way, you know how much a lender will allow you to borrow.
“First-time buyers,” Lehnen says, “might see a house for $50,000 or for $150,000 and think, `Wow, I can probably afford that.’ But they often have no idea of what the payments are going to be. You really need to get the horse in front of the cart before you start going to look at things.”
The experience of shopping for your first home is one that you’ll never forget. Years from now, like most homeowners, you’ll still be able to describe with uncanny detail the interiors of places you’ll see during the next few months. With one notable exception, these are places you’ll probably never set foot in again.
Next Friday: The hunt begins.
