Pioneer Press: February 16, 2006

Tips for first-time homebuyers in the city

By Warren Barr

As the spring home buying season approaches, many first-time buyers will decide they are ready to take the step into home-ownership.

Many entry-level buyers focus their home search in the city because of the social and recreational amenities, as well as shorter commutes to downtown jobs.

Most importantly, the city offers a wide variety of housing types (including condominiums, lofts and town homes) that meet the needs of many first-time buyers. In addition, many city homebuilders cater to this market segment with reasonably priced homes.

Following are some key points to help guide first-time buyers in their new-home search in the city.

1. Choose the Right Neighborhood – The first aspect to consider is location. Determine how far you are willing to commute and if you want to be in a quieter residential or more bustling commercial area. Typically, signs of a good neighborhood include well-kept public parks and existing housing, access to major transportation, and new retail and residential growth. The South Loop, West Loop, the Northwest Side and Bridgeport are examples of great neighborhoods for first-time buyers with a variety of affordably priced homes.

2. Scope Out Your Transportation Options – Many new homes put residents in proximity to the “L”, major CTA bus routes, a Metra train station and/or major roadways, such as the Kennedy and Lake Shore Drive. Confirm the distance to the nearest transportation route you plan to use on a day-to-day basis to ensure you are comfortable with the walk or drive in any type of weather.

3. Ensure Entertainment Is at Your Doorstep – A walkable lifestyle is increasingly popular with all types of homebuyers, including first-time buyers. Investigate the neighborhood to see if retail, restaurants, recreation and nightlife are within walking distance or at least within an easy cab ride. The ability to walk to venues helps alleviate the hassle of finding parking on busy city streets.

4. Seek Out Efficient Floor Plans – The next important decision is the type of living space you can afford. Typically, lowest-priced options, followed by town homes and single-family homes. Condo’s and lofts often offer studio, one, two and three-bedroom designs. Look for floor plans that maximize every square foot of space. For example, some condos are designed without hallways, which can create larger living spaces. Others offer built-in desks to serve as a home office area, or wireless Internet access that allows residents to use a laptop computer from anywhere in the home.

5. Investigate What Comes Standard – Many first-time buyers don’t have a lot of extra money to spend on upgrades. However, many builders today include features such as stainless steel appliances, granite counter-tops and hardwood flooring in the base price of the home. First-time buyers should be sure to compare apples to apples. One new-home community might offer a lower base price, but may charge a lot for upgrades. Another community might offer more standard finishes and a higher base price, but may be the better deal in the end.

6. Check Out On-Site Amenities – Another way to save money is to look for developments that offer on-site amenities such as fitness centers, business centers and hospitality rooms, as well as bike storage and individual storage areas. A fitness center might allow a buyer to forego a gym membership, while a storage unit can eliminate the need to rent space off-site.

7. Look For Pre-Construction Pricing – Another major way to trim the cost of a new home is to purchase during the pre-construction phase of a new community. Prices of new homes typically increase substantially after construction begins and the supply of homes decreases.

8. Work With a Realtor – The assistance of a Realtor can be extremely valuable for buyers who are unfamiliar with the home-buying process. Realtors can also guide you to the neighborhoods and housing types that meet your needs. And, they receive a comparable commission whether selling you a resale or new-construction home, so they can help you explore every housing type.

9. Ask About Special Deals Through Preferred Lenders – Many homebuilders work with preferred lenders in order to quickly and seamlessly provide mortgage financing to homebuyers. Using a preferred lender can make buyers eligible for special incentives, such as free upgrades and rate-lock programs.

10. Consider Resale and the Potential for Appreciation – First-time buyers should look for a home with potential for appreciation in value, such as a location in an emerging or popular neighborhood. Also, selecting finishes like countertops and flooring in neutral shades will have greater appeal at the time of resale.

In sum, carefully incorporating your lifestyle into your new home purchase, taking into account such critical needs as transportation, recreation, entertainment and your budget, will ensure a smoother step into homeownership.

Warren Barr is president of Renaissant Development Group, which is currently developing six projects in Chicago and Milwaukee involving more then 2,000 residential units, including Vision on State, a new community of 253 condos in the South Loop. He can be reached at (630) 571-3400 or wbarr@rendevgroup.com.