Homebuying tips for millennials

There is no escaping the millennial generation. Classified as those in the 18-35 age range, millennials represent the largest living generation, surpassing baby boomers. As history has proven, generations have different life experiences and mindsets while growing up.

For instance, the Greatest Generation are those who grew up during the Great Depression and went to fight in World War II. Their children, the baby boomers, reaped the benefits and worked in an expanding U.S. economy. Today, the baby boomer generation holds great influence, with a large majority or politicians and business executives belonging to this generation. 

However, businesses are focusing more of their attention on millennials. This includes real estate agents looking to generate leads, but difficulty exists. One of the most impactful life events of this generation's time was the economic downturn that started in 2007. The bursting of the housing bubble was the biggest catalyst to the Great Recession, and the effects have scared off potential millennial homebuyers.

Maximum Exposure Real Estate writer Bill Gassett said this generation has not looked into purchasing real estate the same way previous generations have. He cited numerous reasons why: unemployment, high student debt, tighter mortgage credit and the housing collapse. As a result, many millennials are renters, a stark contrast to their parents and grandparents who were homeowners in their 20s and 30s.

Despite those factors, millennials are in excellent shape to buy a house due to record low interest rates. Before you buy the first house you see, there are a few things to remember as a millennial homebuyer.

Location matters

Have you ever wondered why some houses are more expensive than others? Chances are, the surrounding neighborhood is a huge factor. You may be able to get a cheap house on the outskirts of the city, but you will likely have difficulty selling it later on, Gassett wrote. According to New Home Resource, you'll want to create a shortlist of neighborhood qualities you'd prefer. For instance, do you want to be located near public transportation and parks? Or would you rather live in a downtown area with a bustling night life? You should also consider the distance from your job. If you are buying a house with your partner, both jobs should be accounted for.

Gassett also recommended taking a look at crime statistics and neighborhood school ratings, which are especially important if you'll be raising a family.

Find the right agent

Millennials may take pride in getting things done on their own, but they will need the help of experienced real estate agents. It is up to you to find the agent that can help you the most. You'll want to interview a handful to pick the one you can trust. Most millennial homebuyers will be going through this process for the first time, so an agent will give you most of the information you need to know.

According to Gassett, you should ask brokers tough questions while also obtaining references. Think of this part as your chance to conduct the job interview. Take your time and choose carefully.

Parental advice is handy

Your parents are also an excellent resource to lean upon during the homebuying process. They've likely done this at least once, if not a few more times. Go over important financial terms with them and discuss mortgage rates. Elderly advice doesn't have to just come from your parents, either. You can talk with grandparents, mentors, older friends and coworkers. Be sure to ask them about the many benefits of owning a house, such as tax breaks and the ability to build equity.

Parents may also be able to help you out with a down payment. You may obtain a more favorable mortgage if you have a higher down payment.

Budget properly

Buying a house is not only about a down payment and monthly mortgage payment. You need to factor in short- and long-term costs. For instance, you'll likely have to pay fees before moving in. These costs will range from home inspection services to hiring an attorney to review the contract. Gassett wrote that other costs may include home maintenance and new furniture and appliances.

Stay patient

In an age where instant gratification is nearly universal, the homebuying process takes time. You can't, nor shouldn't, rush through it. Conduct thorough research on real estate agents, houses and neighborhoods. You'll benefit from carefully navigating through this experience. After all, this is a house you'll be buying, which is arguably one of the biggest life-changing moments anyone will go through. Over time, you'll eventually settle on a house you want to put an offer on, and if all goes well, it will be yours.

Millennials are hesitant to enter the housing market as buyers. Given recent events and personal debt, some within the generation may not believe that the present time is actually very favorable to first-time homebuyers. While the housing market is favorable toward buyers, millennials will still need some advice throughout the homebuying process to avoid making rushed decisions.