6 Tips for Buying a Starter Home in Boston
By Sean Creamer on July 26, 2024
Whenever first-time buyers face eyebrow-raising home prices, starter homes become a popular topic at the kitchen table.
Boston’s real estate market can be challenging; the city’s iconic neighborhoods host some of the most desirable homes in Massachusetts. The urban landscape and opportunities in the city make it an appealing destination for many. For buyers seeking affordability, Beantown isn’t always as cozy and sweet as its iconic restaurants and pastry shops.
First-time home buyers often feel overwhelmed by the high prices and competitive landscape in Boston's real estate market.
But starter homes, coupled with tools such as commission rebates, can make affordability more achievable for Boston buyers.
Below, the Prevu Real Estate team breaks down everything you need to know about buying a starter home in Boston, from choosing the right one to saving money when you buy.
Buying a starter home in Boston
- What is a starter home in Boston?
- How do I choose the right starter home?
- Working with an experienced agent
- Use commission rebates to save money
- Get a mortgage pre-approval
- Prepare a detailed budget
What is a starter home in Boston?
A starter home is typically a smaller, more affordable house that fits the needs of first-time homebuyers. In Boston, these properties often comprise condos, townhouses, or small single-family homes.
The primary benefit of a starter home is often the price. Consequently, it can be challenging to find one in Boston’s most highly-desired neighborhoods, such as Downtown Boston or Seaport District. That said, it shouldn’t mean certain areas should be crossed off the list. While a single-family home in Beacon Hill may be outside your budget, a smaller condo may just fit the ticket.
Many Boston suburbs offer ample green spaces, providing outdoor recreational areas and parks that enhance the lifestyle benefits of living in these towns.
If location isn’t a dealbreaker and you just want to ditch the rent check and become a homeowner, starter homes can be an ideal option because of their flexibility.
You can branch out to the greater Boston area and explore towns with an easy commute to Boston, or you can stay in Beantown and consider fewer square feet for better amenities. Additionally, consider the availability of public transportation, which can make commuting more manageable.
How do I choose the right starter home?
Choosing the right starter home is about balancing your needs and preferences.
Even though you’re taking your initial steps on the homeownership ladder, it’s still a good idea to ensure the first house you buy aligns as much as possible with your lifestyle.
If being a stone’s throw away from Boston’s impeccable Italian restaurants has always been at the top of the list, explore every option available in North End. Even though the neighborhood can be expensive, you may get lucky and find something that works for you.
Additionally, homes near the Charles River are highly desirable due to their proximity to recreational activities like kayaking, fishing, and hiking.
Starter homes, although typically smaller, should nonetheless offer enough space to accommodate your current needs. Think about your requirements in terms of bedrooms, bathrooms, and storage. If you have a lot of furniture and need a ton of space to store your belongings, don’t force yourself into a home that can’t sustain that.
Depending on your budget and the options you’ll have available, it may come down to prioritizing certain features over others.
If you dread long commutes, it can make sense to sacrifice amenities for easy access to public transit. On the other hand, if proximity to Boston’s waterfront or restaurant scene is something you’ve always dreamed about, you may consider buying a small apartment instead of a single-family home as a trade-off.
Work with an experienced agent for first-time home buyers
There are three crucial benefits first-time buyers should know: you gain access to a professional who knows the Boston market inside-out, you have someone with experience to help you through negotiations, and you have someone who can put money back in your pocket when you buy.
The ideal buyer's agent should be able to enrich your starter home journey; this means they’re easy to contact, always available to answer any questions, and can keep you up to speed during every step of the transaction. They can also save you time by streamlining your home search and directing you to the listings that match your preferences and budget.
You will have to interview multiple agents to ensure the right fit. The key things we mentioned above can be good guidelines as you interview potential brokers, but if you want to narrow it down to the essentials, ask how many years of experience they have, how they handle communication with a client, and whether they offer commission rebates.
Use commission rebates to save money
Even though starter homes usually come with the added benefit of affordability, they can still be an expensive investment. Working with a real estate agent that offers commission rebates can help make that expense more manageable.
Commission rebates are essentially a portion of your buyer agent’s commission fee given back to you as savings. Modern brokerages like Prevu Real Estate invest in online tools and salaried agents to flip the script on the traditional approach to buying a home.
For instance, Prevu currently offers the largest rebate in Massachusetts, potentially allowing buyers to get back up to 1% of their home’s purchase price via its Smart Buyer Rebate.
To draw up a clearer example: if you found the ideal starter home in North End and purchased it for $1,000,000 with Prevu, you could receive up to $10,000 of your purchase price back as a rebate.
That extra cash can be vital to offset expensive closing costs, fund a relocation, or kickstart a furnishing budget for your new home.
Get a mortgage pre-approval
When you’re ready to search for a starter home in Boston, put one item on your to-do list above all else: a mortgage pre-approval.
Many first-time homebuyers will have many details to worry about as they shop for a home; the last thing you want is to be at a disadvantage when you’re ready to make an offer.
Mortgage pre-approvals are essential in today’s real estate market. They give sellers the piece of mind that you are a serious and qualified buyer who won’t back out of the deal at the last minute because of financing woes.
It will also give you a clear understanding of how much you can afford, allowing you to aim for a property that comfortably fits your budget.
Prepare a detailed budget
There’s more than the down payment to worry about when budgeting for a home purchase.
Most buyers will focus on the down payment as the primary milestone on their homebuying journey, and with good reason. But if you want to ensure as little stress and headache as possible, you need to diversify your budget.
Closing costs, unexpected expenses, and potential fees, such as escrow and attorney fees, are all necessary to consider when setting that hard-earned money aside. This is where a mortgage pre-approval can come in handy.
Not only can it make your offer stronger, but it also helps guide your budget.
Once you have a clear idea of what your mortgage lender is willing to offer, you can break down your budget into specific categories: down payment, closing costs, cushioning in case of competition from other buyers, and an emergency fund for any unforeseen costs.
