A Millennial’s Guide to Buying a Home on Bainbridge

The Market

September 19, 2023

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Empowering you in the world of real estate is my foremost priority. Navigate through this space to gain fresh perspectives on the ever-evolving market, invaluable home care advice, and proven tactics to boost your property's appeal. Here, we pave the way for your informed homeownership adventure.
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Adam Foley

Published in the Bainbridge Review

Growing up, I was the odd one out. While my Bainbridge Island-bound peers were eager to escape what we affectionately called “The Rock,” and dreamt of more-exciting destinations, I felt a deep desire to stay.

Yes, I experienced the excruciating boredom of restless adolescence – enduring endless afternoons loitering in front of Town and Country. But I also grew to cherish the squish of mudflats between my toes, adventures through Grand Forest and the indescribable magic of island life.

While most of my generation managed to escape, many found themselves drawn back when it came time to raise their families. Life here, with its exceptional schools, idyllic nature and tight-knit community, suddenly didn’t seem so bad.

However, the rising cost of homes (the current BI median price is around $1.49 million) has become a formidable obstacle, making it difficult for them to return. My generation finds itself caught between a rock and a hard place—pun intended. (I’m a dad now, so dad jokes are permitted.)

But it can be done. Here’s how:

In the search for affordability, many home buyers sort their Zillow search from lowest to highest. Yet, the lowest-priced homes often trigger intense bidding wars, dramatically inflating prices. An effective tactic is to keep an eye out for homes lingering on the market due to overpricing, unnoticed by the competitive crowd. Savvy buyers can capitalize on those opportunities. Offering under-asking on an overpriced home can often result in a better price than the bottom-of-the-market home.

Also, don’t be afraid to ask your parents for help. It can be humbling, but, achieving your dream of owning an island home doesn’t necessarily mean groveling for money. Co-signing with a family member can enhance your loan capacity and lower the down payment. To alleviate discomfort in seeking aid and bolster your case, remember these facts. Millennials confront a daunting housing market, paying over twice the sum Baby Boomers did for homes on a national scale, even after adjusting for inflation. Moreover, millennials earn 20% less than their boomer counterparts did at the same life stage, as indicated in a recent report from the nonpartisan think tank New America titled “The Emerging Millennial Wealth Gap.” Co-signing can help bridge the generational wealth gap.

Meanwhile, scraping together a 20% down payment for island prices can feel as impossible as spotting Sasquatch during your morning jog in the Grand Forest. (Though Islanders might debate this feasibility.) With Federal Housing Administration backing, bid farewell to the hefty down payment, requiring just 3.5% of the home’s price. Your credit score needn’t be perfect; eligibility starts at a score as low as 580. On the flip side, FHA loans come with an upfront fee and a recurring mortgage insurance premium.

Also, all-cash offers are a common phenomenon in the real estate market on BI. For millennials with limited finances, seeking a personal loan from family and post-purchase refinancing to repay the loan is an option. However, that hinges on ensuring the home’s eligibility for refinancing. There can be no significant issues like roof leaks or foundational problems. Consult a loan officer before utilizing the all-cash loophole.

If an all-cash option isn’t feasible, boost appeal differently. Obtain preapproval for a mortgage to exhibit financial stability. Also, consider waiving specific contingencies you’re comfortable with. For instance, if a seller’s pre-inspection reveals no major issues, think about skipping a separate inspection. Boosting your earnest money deposit as a sign of goodwill can underscore your commitment. Lastly, ponder increasing your offer. The historical home value appreciation in Bainbridge could offset any disparities.

To outmaneuver the market, explore inventive solutions. Off-market deals present unique opportunities beyond conventional methods. Delve into seller financing, lease-to-own arrangements and other unconventional avenues. These opportunities arise through referrals, personal connections, local agents and direct owner communication. While finding a seller may involve some trial and error, relationships hold influence in local real estate. Spread the word—perhaps a family friend is suddenly interested in selling. If you’re set on living on the rock, but worry about affordability, embrace creativity, ask questions and don’t hesitate to reach out.

A lifelong Bainbridge Island resident, Adam Foley is a local real estate guide supported by Realogics Sotheby’s International Realty

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