NEW YORK – Even as home prices rapidly escalate, many first-time home buyers – a group economists long feared would be priced out of the market – are finding they actually have advantages over repeat buyers: more flexibility in the transaction and access to a greater variety of financing options. Flexibility is particularly helpful when shopping for a home in today’s competitive market, characterized by commonplace bidding wars.
Many repeat buyers require offer contingencies, such as selling their current property before closing on a new purchase. But offers with fewer contingencies are more attractive in a multiple-bid situation.
“Anyone in a position to make an offer without a home-sale contingency is going to be better positioned than those who are waiting to free up cash,” Dana Bull, a real estate professional with Sotheby’s International Realty in Boston, told Apartment Therapy.
First-time buyers also may be less stressed, given that they’re likely to focus on one transaction at a time rather than buying and selling simultaneously, Bull adds.
First-time buyers also have access to grants and down payment assistance programs that are unavailable to repeat buyers. While repeat buyers have the advantage of using the equity from the sale of their previous house, first-time buyers find assistance programs that may offer thousands of dollars in savings.
“You may be eligible for grants or specialty programs that cover some or all of your down payment amount, reducing the upfront cost of buying a home,” Andrina Valdes, chief operation officer of Cornerstone Home Lending, Inc., told Apartment Therapy.
First-time home buyers comprised 33% of existing-home sales in January, up from 32% a year earlier, according to NAR data.