Valuable Tips for Every First-Time Homebuyer

Valuable Tips for Every First-Time Homebuyer
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Dear Monty: I live in the Washington, D.C., area, where home prices are always higher than in other parts of the country, and I hope to move closer to the city. I work as a freelancer and have about $150,000 saved up. I think I will have to get a modest condo if I buy now. Suppose I move farther away from the city or have a bunch of roommates or renters. Single-family homes around here are typically $600,000 to $1,000,000, and even townhouses are like $500,000.

I might find getting a mortgage hard because I'm a freelancer. I'm currently not paying rent, but I'm 39 and want to own my own place. Would it be better to get the modest condo (which I might not like) now before prices and interest rates go up? Or should I keep saving (despite my less-than-optimal yet affordable living situation) until I can afford the more expensive house? What about buying a place where I might be somewhat overextending my resources and then renting out the basement (or living in the basement and renting out the rest)? I don't have prior experience with real estate, so I don't have that much of a sense of how feasible or risky that would be for me.

Monty's Answer: The riskiest part of achieving your goal is depending on someone else to decide for you. I cannot tell you which one of the options that you are considering is the best for you. Consider investing the time to educate yourself about all the options and how the real estate process works. There are numerous books about homebuying you can order online. I can point you to some resources where you can obtain the education you need to be prepared to proceed with confidence based on your knowledge. Real estate is not rocket science. You will feel enlightened by investing an hour a day for two weeks. You will know the basics.

Information Sources

No. 1: There are many methods to gain real estate knowledge quickly. Check out online bookstores like Barnes & Noble or Powell's Books. There are free online websites like Khan Academy or Dear Monty. An internet search for first-time homebuyer classes in D.C. will reveal many options.

No. 2: Type "mortgage lenders with no W-2 requirements" into the search bar, and many options appear.

No. 3: You did not mention fractional ownership, but reviews several companies that offer fractional ownership.

No. 4: explains rent-to-own and covers the pros and cons for both buyer and seller.

No. 5: is a site that offers renters accommodations around the world. D.C. is likely a location tourists want to see where hotel rooms are costly. Using a property manager to handle Airbnb details could address your roommate question.

Not all sources of real estate information are accurate. There is less-than-optimal data in books, websites and magazine articles. Often, data is misleading or even wrong. Some authors have significant conflicts of interest, are inexperienced or are collecting fees when you click on their published links. Look for sites that disclose link compensation. Dear Monty does not accept or pay fees of any kind.

Richard Montgomery is the founder of PropBox, the first advertising platform to bring home sellers and buyers directly together to negotiate online. He offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or
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