Strategies for buying entry level homes

Lately I have been getting a lot of requests from prospective home buyers for lower priced “entry level” homes in the Boston North Shore and Merrimack Valley area.  Even though home prices are well of the market highs, buying a quality home in the entry level price ranges can be challenging.

Some of the challenges that my clients are facing are that many of the properties that match their requirements, often 2 or 3 bedroom, 1 to 2 bath smaller sized single family homes in their price ranges of $200k to $300k often need a great deal of “TLC” to get them to move in condition.  The nicer homes in this price range tend to go under agreement quickly and the remaining inventory is often a large percentage of REO (bank owned) homes being sold “as-is” and often needing substantial rehab or short sales that require “third party” bank approval.

If a bank owned home is in a nice area and the price has dropped to an attractive level, there tends to be a lot of competition for the home and often multiple bids.

Pursuing short sales can be very frustrating for all parties involved, and this is especially true for first time home buyers.  I always inform my clients on the challenges of buying a short sale, especially regarding the differences in timing compared to a “regular” home sale.  It can take a long time for banks to respond to offers and a short sale transaction could take several months to complete.

I think that the keys to success in pursing these diamonds in the rough, which are out there and going under agreement every day, is to:

1) as a buyer, make sure you have your financing pre-approved and ready to go and

2) work with a very responsive buyer’s agent who will send you information as soon as a new home comes on the market and will get you, the buyer, information on the home as soon as questions are asked and will show the property to you as soon as possible so that an offer can be presented and hopefully accepted before another buyer locks up the property with an accepted offer to purchase.

If you have been frustrated as a first time home buyer or as a buyer of a lower priced entry level home, stick with it and your patience and efforts will eventually be rewarded.  You can do it!

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