Single Buyers

You’ll encounter special joys and hurdles when you’re alone in the deal. These 5 strategies will smooth your path to buying.

By Marilyn Lewis of MSN Real Estate

Solo homebuyer? You're not alone (© Paul Bradbury/OJO Images/Getty Images)

© Paul Bradbury/OJO Images/Getty Images

If you’re single and thinking of buying a home, you’re in great company. Solo buyers made a quarter of all U.S. real-estate purchases last year, according to the National Association of Realtors’ Profile of Home Buyers and Sellers 2012. Twice as many single women bought homes as did single men. 

Buying a home as a single person is much like buying with a partner. You shop, select and finance a piece of property, as all buyers do.

But there are distinct differences when you’re alone in the deal. All the joys and burdens are yours alone. The research, the shopping, the financing and, eventually, the bills and upkeep – yep, all yours. While that probably sounds obvious, there are implications you may not have considered.

Even if you are not a parent, shopping only in highly rated school districts will most likely ensure the resale value of your purchase.
Getting a mortgage alone
Many solo buyers face challenges. The recession has been one of the biggest. In the early recession years, single homebuyers enjoyed a boost from federal first-time-homebuyer tax credits in 2009 and 2010.

But by 2011, the recession hit solo buyers hard. “Single-income households are more reluctant to make big-ticket purchases in times of economic uncertainty,” according to the NAR’s Profile of Home Buyers and Sellers. Home purchases by singles fell an “unprecedented” 7% between 2010 and 2012.

Homebuyers: A snapshot

The biggest hurdle for singles is qualifying for a mortgage. One bonus: Singles aren’t dragged down by a partner’s credit score, loans or credit card debt. Couples often get stuck with a higher interest rate because of one member’s low credit score.

Couples, though, usually have an advantage.  Not only do they have two incomes but also, when sharing overhead, “one plus one usually equals more than two, as many expenses are joint and not duplicated.”

Difficulties in qualifying sometimes lead buyers, especially younger ones, to ask parents or other relatives for financial help.

We have seen people choose to continue renting as a result of not wanting to involve any other parties in a purchase and pay more rent than they would if they purchased.

Shopping solo — the triumphs
Single shoppers are alone with all the decisions required to buy a home. That can be harrowing. But there’s also a special sense of accomplishment to buying a home alone.

You will also will be the one who gets the choices and all of the decisions. You don’t have to worry about someone else and what they like or don’t like.

Despite the exhilaration, buying solo can be nerve-wracking without a confidant and sounding board. To compensate, we work with singles closely to make sure they feel confident with their decisions.We find that we become more involved, like a friend.

Shopping solo — the difficulties
Unless you have made or inherited a fortune, a single buyer has fewer options than a couple with dual incomes.

When home shopping, it can be harder to feel confident in your choices when you’re in it alone. To help with the uncertainty, singles enlist friends and family as consultants. Which seems to be a smart tactic, but it can prolong the buying process as each additional person is brought in to view a chosen home and weigh in. And this person may not always know exactly what is right for you and your situation or the market you are looking in. We at the Johnson Team will intensely interview you, and we will be at each home that you view to see your reactions. They may not have been. We also have the expertise, which most friends and family do not have.

Often single clients who, after viewing homes, fall in love with one in sought-after area. Excited, the client ask a friend to take a look. The friend may be critical of the price, due to lack of knowledge of the area and the buyer gets cold feet and backs away from the deal.Even though for their situation it would have been the perfect situation.

Complex calculations
Some singles worry that owning a home will send a wrong signal to potential mates, making them appear too settled, real-estate agents say.

Solo buyers hoping eventually to find a partner face a complex set of calculations. How much do they take the future into account? Should they buy enough space for two people? Or one? Some buyers are deterred from a purchase as a result of fearing that it might keep them single, some hold off, ultimately wanting and hoping to take this big step in life with a partner.

It’s impossible to plan for an unknown future, at some point you may consider to quit waiting and make choices. You may never get married. Who knows? But does that have to deter your from the dream of home ownership? And think of this once you do meet your soul mate, many single buyers who outgrow their first homes often keep them as investments. We counsel them to try to keep their current home as an investment property and rent it out. It’s a big step toward helping create long-term financial security. We have connections in the rental world that can make this a real option for your future.

5 smart strategies

  1. Get a grip on your finances. What you can borrow and what you can afford are two different things. Before buying, understand your expenses in detail. You may want to get a financial planner to help you know how much you can safely spend. Do this before shopping, so you won’t fall in love with a home you can’t afford. Be transparent about finances with your real-estate agent and lender so they can help you avoid taking on too much debt.
  2. Come in under budget. Since single buyers have fewer financial backstops, it’s smart to buy a home priced below what you can afford, so you’ll have a comfortable cushion.
  3. Find an agent you really trust. Your agent may become your mother confessor, father figure and financial adviser. Get referrals from your network and spend time interviewing candidates. Don’t hire anyone you don’t really like and trust. We want to make sure you are comfortable with us as your agent.
  4. Stay flexible. Be willing to exchange dreams for reality. You may need to let go of your fantasy home or neighborhood and buy a smaller home now, trading up later.
  5. Get a roommate. Single buyers often bring in a roommate to help cover costs, rents are often so high that many times the roommate almost covers the mortgage payment.

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