Should Your First Home Be Your Dream Home?

When you think of buying your first home, do you dream about things like an amazing outdoor kitchen? A large chef’s kitchen with a 10-foot island to host the perfect holiday dinners? Or maybe a primary suite with a fireplace in the bedroom, and a spa-worthy bathroom. Swoon, on all of the above please!

While it’s fun to think about all the nice or grand things we want in our first home – and many are probably the reasons why we are looking to buy our own home in the first place – it’s important to think about *if* your first home should have all those dreamy attributes.

You see, first-time homebuyers can have a lot of odds against them in the first go-around of buying a home. The Charlotte market is competitive, and many first-time buyers are working on a budget. Very few homes (whether it’s your first home or not) will have EVERYTHING that you want. I like to say that 80% will satisfy your wants and needs, 10% you’ll be able to change (carpet, paint, etc), and the remaining 10% you’ll just have to live with. We call it the 80/10/10 Rule.

So, what should you look for in a home as a first-time homebuyer?

1. Neighborhood: Find an established neighborhood that has all the amenities and future attributes that you will need. Planning on a family in the near future? Look for neighborhoods with park and pool amenities, and check out what other parents have to say about the local school districts. Not looking to start a family at all? Check to see if your new place is near all the things you love to do. Is it close to work? Close to your favorite shops and restaurants? Is it by the light rail or a greenway?
2. A little fixer: Find a home where you might need to put in a little sweat equity. Find a home with good bones and a great layout, but may have some improvements that you can make yourself, or can afford to hire out. Also, don’t be afraid of a 203(K) FHA loan. This will gives you a great chance to purchase the home for a little less, but give you instant equity gain of your home’s value after the repairs / upgrades have been made.
3. The price: It is important to stay on budget and have enough money set aside for unknown repairs and everything else that comes with owning a home. Your first home will teach you a lot of lessons on managing money and prepare you for buying your next, upgraded home. Did you know that average equity gain of a homeowner in 2021 was $57,000?

Focus on the goal of getting a home that you can add value to, and use the leverage of that home to help you upgrade to your next home. Your dream home could be just a few years away.

Start looking for your next home here.