Solo homebuyer? You're not alone
You'll encounter special joys and hurdles when you're alone in the deal. These 7 strategies will smooth your path to buying.
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CORRECTION, April 29, 2013: Carl Toll is a Denver homeowner. His name was spelled incorrectly in a previous version of this article.
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. (Bing: First-time-homebuyer checklist)
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.
Master of his domain
Carl Toll, a single, 36-year-old network technician, bought his 1,600-square-foot Denver home in 2007, after a bad roommate experience soured him on the rental life.
"This isn't working out," he decided after the housemate moved out without telling him. "I want to be the master of my own domain."
Shopping and purchasing were pretty easy, he says. He thought through each aspect of his purchase carefully. He wanted a low-maintenance home: "I didn't want to have to replace water heaters and furnaces right off the bat." So he looked for something built recently.
He's not a parent, but he shopped only in highly rated school districts to help ensure the resale value of his purchase. He has enjoyed the house, the neighborhood and the sense of independence that owning his own home gives him, he says.
Getting a mortgage alone
Toll's experience was smooth, but 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.
Stacy Erickson, a 29-year-old professional organizer, bought her 700-square-foot co-op apartment on Seattle's Capitol Hill in 2009. "That was a really good year for people like me," she says. "I was able to borrow some money for a down payment and then pay it all back with the tax credit."
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.
The biggest hurdle for singles is qualifying for a mortgage. "In most cases that I see, it is more difficult for a single buyer to purchase than a two-person household," says Craig Tashjian, vice president at Fairway Independent Mortgage in Needham, Mass.
One bonus: Singles aren't dragged down by a partner's credit score, loans or credit card debt. Tashjian says couples often get stuck with a higher interest rate because of one member's low credit score.
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Couples, though, usually have an advantage, says Marcus McCue, executive vice president at Guardian Mortgage Co., which operates in Texas and Michigan. 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.
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"I 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," New York real-estate agent Brad Malow says.
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.
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"I was the one who had to come up with all of the financing without support from a spouse or partner," Erickson says. "However, I was also the one who got the choices and all of the decisions. I didn't have to worry about someone else and what they liked or didn't like."
Homebuying is a means of self-expression, particularly for singles, says Jennifer De Vivo, an Orlando, Fla., real-estate agent. "It's a way for singles to express their lifestyles and values. They are able to focus on the exact communities, home styles and features that cater to their individuality with much less compromise."
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Despite the exhilaration, buying solo can be nerve-wracking without a confidant and sounding board. To compensate, singles often work more closely with their agents. In the best cases, they form a tight bond.
"I find that I become more involved, like a friend," says Jerry Grodesky, managing broker at Farm and Lake Houses Real Estate Inc. in Loda, Ill.
Watching the satisfaction that single buyers get from tackling one of life's major milestones on their own is rewarding for an agent, Malow says. "I have to say that the closings with these buyers just thrill me."
Anyone looking to buy a home should educate themselves, because this will likely be the biggest purchases of your life! To avoid becoming a future, foreclosure statistic, set a price that you are comfortable with, not what the bank, broker or agent says you "can qualify for." This means do not buy more house than you can pay for and still pay your other financial obligations (food, utilities, insurance, taxes, etc.). I got an amazon ebook ("stuff I told my kids about how to buy your first house") for my son to get some basic info BEFORE he sees anything with a real estate agent. It is less than 3 dollars and free to borrow for prime members. Well worth it in my opinion.
Bought a house at 30, at a ridiculously low interest rate. Pretty much the same for me as scribe514044's first paragraph.
Have been with a wonderful woman for just about 3 years now. Most likely getting married next year. Life is pretty freaking good right now.
Holler atcha uncle.
I bought land and built a simple cabin as a young man with a single income. It has served me well as colladeral for several house purchases over the years. Now 20 years later I am able to say I have both my house in town and my cabin payed off because I only bought what I could afford
I bought my first home when I was 29. I'm now 31, meaning I've had the house for almost two years (will be two years in August 2013). I'm glad I made this decision. Sure, it has cost me some money. I've had to dip into my savings. The house I bought was a bit of a fixer-upper. However, thanks to the housing crash, owning a home in my area can in some cases be cheaper than renting. My mortgage payment is lower than most of my renting friends' monthly rent payment. So even though I've had to do some repairs, I'd bet I'm probably paying just as much, maybe less, in the long run, as my renting counterparts.
That bit about owning a home scaring off potential mates is silly, I think. Why is "appearing settled" such a bad thing for a single person. Owning a home shows that you can commit to something. It shows you can take care of yourself. Besides, like that guy that the article quoted, you may never get married. You can't put your life on hold waiting for the right person. I am single, and I am going through life's milestones on my own as of right now. If a nice young lady wants to join me, then that'd be great. In fact, I'd love that. But I can't just sit an wait on it.