What a Starter Home Must Have

Five Things Your First Home Must Have - You've decided it's the right time to buy. Here's what to look for in your starter house to make sure it's the right one and to maximize its resale value. These days, the term "starter home" is a little misleading. It implies a temporary home soon to be traded in for a bigger, fancier model. But because there's no end in sight to the real-estate market's troubles, moving up to a new home won't be easy or quick. Honestly, you should plan on staying in a home seven to ten years.

What constitutes a good first home is more important now because first-time homebuyers have become a larger share of the market. In 2010, first-time buyers made up about 50% of the total homebuyers in the U.S. market.

The expiration of the recent federal government's first-time-homebuyer tax credit makes the decision to buy a little tougher now. But if you decide the time is right, here are some key things to look for in your starter home to make it the right decision for your family and to maximize its resale value when it comes time to sell.

Household Budget - An affordable price on a first home is one of the biggest priorities for first-time homebuyers. Unlike a trade-up buyer, they don't have any equity to roll into the purchase of their next home, so coming up with a down payment and the financial aspects of buying a home especiallt your 1st home. Make sure the house is within your budget. A lot of people try to push it and go for the maximum dollar amount they qualify for, trying to keep up with the Joneses.

Ten Year Plan - Because you'll probably be there longer than you think, your first home should be able to accommodate not only the family you have now but the one you plan to have over 10 years. Have that conversation. If you're just getting married, ask, 'Do we plan to have kids? How many kids do we plan to have? How many bedrooms are we going to need?'". The biggest bit of advice most give for a starter home is to really think about what your future looks like.

Because a starter home is usually a smaller home, in today's market especially you don't want to overpay for features and amenities, or remodels, that you're not going to be able to recoup later. Quality of space is also important. While you want to have at least two bedrooms, a lot of bedrooms aren't going to be much help if they're too small to be useful.

Location, location, location - Everyone's heard the old cliché "location, location, location," but what does it really mean for first-time homebuyers? Three years after the implosion of the housing market, the keyword is "stability,".

How to find a stable neighborhood - where yards are maintained, where there's not a lot of 'for sale' signs, where there's not a lot of 'for rent' signs, where you have longer-term people living in that neighborhood because those are the ones that are going to get you the best return later.

Characteristics of a prime location that all homebuyers seek.

A neighborhood with well-maintained, attractive homes.
A location convenient to local amenities.
Proximity to work.
A quality school district, especially for first-time homebuyers who plan to have children.

History of proper maintenance - Whether a first home has been properly maintained can have a huge effect on your housing costs in the future. A few key areas of the home can give you a general idea of whether the previous homeowner was diligent about maintenance. If you see these issues, consider looking elsewhere.

Rotten trim on the exterior.
Dirty air-return ducts or a dirty filter in the heating and air-conditioning system.
A crumbling roof or damaged gutters.

But while a spot check of these features can help you narrow down prospective first homes, a thorough inspection is essential before closing.

Recent updates in key areas of the home - First-time homebuyers on a limited budget may not get a totally up-to-date home. If you have to choose, prioritize these updates:

Energy-efficient windows.
Updated electrical wiring with sufficient outlets.
A new roof and a new water heater.

When a lot of folks go into a starter home, they don't want to have to put a lot of money into it because they know it's not their home for life. If you look at what the big budget items are that may come up during the next seven to 10 years and know that you're in good shape on some of those, that's definitely part of the checklist.

There are some rooms in a prospective first home where recent renovations help resale value the most. Bathrooms and kitchens are the most important pieces of the puzzle when buying a house. If they have those renovated, or if the house is new or been updated by the previous owner, those are things that give it the most attraction when you go to sell your house later.