New Hampshire’s housing market got some national attention this year. Realtor.com reported Manchester is one of the hottest housing markets in the country, but it also noted that New Hampshire is overall one of the least affordable states for housing.
“New Hampshire used to be the place you moved up to from Massachusetts to get a much bigger house, more affordable,” said Paul McLaughlin, the Homeownership Program manager at Neighborworks Southern New Hampshire. “But there's not a lot of affordable houses out there right now. The prices just keep going up.”
For our How To New Hampshire series, we decided to ask him what first time homebuyers should know in a hot housing market.
Tip 1: Take a homebuyer education seminar
These seminars are offered by homeownership counselors certified by the U.S. Department of Housing and Urban Development – basically people who aren’t selling you something who can teach you about the homebuying process. They cover everything from budgeting, to finding a mortgage lender and closing on a property.
“It's required for a lot of down payment assistance programs and some loan programs,” McLaughlin says. “So it's really the best way to start and get that expert advice from people who aren't there making a marketing pitch.”
Certified programs in the state are offered by Neighborworks Southern New Hampshire, Affordable Housing Education and Development (AHEAD) in Coos County and The Housing Partnership on the Seacoast. There’s a cost to attend the seminars, but McLaughlin says there are discounts or waived fees depending on someone’s circumstances.
Tip 2: Make a budget
Once you take a homebuyer education seminar, McLaughlin says certified counselors like Neighborworks can work with you on your budget one-on-one. When making your budget, think about what you can afford in the long run, not just right now.
“A lot of folks out there say, ‘Hey, I can buy for what I can rent.’ And yes, your mortgage may be less than your rent, but your housing payment is probably going to be more once you factor in taxes, homeowners insurance, future maintenance costs,” McLaughlin says. “A lot of people forget — if you're buying a 20- or 30-year-old house, chances are you're going to need new heating systems, new roofing. And those things aren't cheap.”
Tip 3: Take advantage of available financial assistance
McLaughlin says homeownership counselors will tell you about financial assistance programs for homebuyers in the seminar you attend. That includes New Hampshire Housing’s mortgage programs which can help with down payment assistance and closing costs.
Tip 4: Remember that it’s ok to wait and save
McLaughlin says even with these resources, some people take his homebuying seminar and realize they still need to save more before they can afford to buy.
“A lot of people do come out of it and say, ‘You know what? It's not the right time’. I still consider that a success story because you didn't get into something that you couldn't afford,” McLaughlin says. “We don't want to just create homebuyers. We want to create sustainable homebuyers. We don't want them coming back to us because they're going into foreclosure and they couldn't afford the house.”
Tip 5: Work with an agent
If you continue looking for a house, McLaughlin advises working with a real estate agent. Homeownership counselors can help you find someone who they recommend and has a license.
Agents help you find properties in your budget and the area you’re interested in, as well as help you narrow down what kind of home you’re looking for. Remember to ask them what homes in the neighborhood you like are actually going for, because they often close well above the listed price in the current market.
And the negotiating is best left to the real estate agent once you find a home you like.
“A licensed, certified Realtor is really going to help you get through that process of negotiations,” McLaughlin says. “That's not easy. People are very personally attached to their homes, and negotiations can get heated between folks. Sometimes you're better off letting someone else handle that.”
Tip 6: Don’t skip the home inspection
New Hampshire’s housing stock is, well, old. So if you find the right home and decide to place an offer, McLaughlin says to always follow through on the home inspections. Otherwise your dream home could become your nightmare.
“It's not typically required, but it's highly recommended because we've seen people come back a year or two later saying, ‘Gee, I didn't know what I got into,” McLaughlin says. “Or they're calling some of the home inspectors out there and saying, ‘Hey, can you do a post-purchase inspection? I need to really see what’s wrong with the house that I bought.’ So buyer beware.”
