Buying A Home - Entering The Real Estate Market With A Starter Home by Sarah P. Shimanski

If you're considering buying a home, you probably have a wish list of the ideal features you want your new home to have. But as you browse the local real estate market, your heart sinks as you begin to realize you'll need to lower your expectations for your new home. Instead of a spacious home with a perfect view, you may have to settle for a cracker jack home with a view of your neighbor's wall.

Even though you may have to sacrifice some features, it doesn't mean you can't use a little creativity to get into an affordable home. Be on the lookout for an up and coming neighborhood. Telltale signs include homes being remodeled or new landscaping being installed. You can usually get in this type of community at a reasonable price. Also follow where the artists go. It's not uncommon for artists to change a rundown community into a desirable one.

One main advantage of buying a starter home is the ability to get into the real estate market and begin building equity. While a starter home may not possess every feature you want, it gives you the opportunity to build equity for a better house in the future. This technique is suitable for homebuyers who anticipate a rise in income in the future. While being able to save money can help you buy a better home, you can still use the equity from your starter home to move into a larger one. Despite the advantages of owning a starter home, there can be drawbacks you need to know about:

1) Puts A Strain On Your Budget - Buying a home can put a dent in your savings. Besides the initial down payment, you'll incur additional costs such as: closing costs, appraisals, property inspections, agent commissions, and moving expenses.

You might be misled to believe that buying a home with less square footage will cost significantly less. Unfortunately you'll find the price difference to be minimal due to the high cost of land in some communities, especially in nicer areas.

2) Get The Right Mortgage - If you can, be sure the mortgage you're applying for doesn't have a prepayment penalty. This gives you freedom to sell your home anytime or pay the loan off early. If possible, find a loan with low or zero points as this will keep more money in your pocket.

3) Be Prepared For Tough Times - Real estate market conditions can change at any time. If the market value of your home depreciated in the next few years could you survive selling the property at a loss? This also means you may not have any equity to move into a larger home. Being prepared for a down time in the market helps you survive until the market improves.

In spite of these precautions, many homebuyers follow this strategy to get their foot into the real estate market. Not only do you enjoy the pleasures of home ownership, but you'll gain experience in being a homeowner.

If you're searching for the perfect starter home in Southern California, check out these local Anaheim Realtors and Anaheim Hills Realtors to help you find one.