TV shows make home-buying look so easy. You look at three houses and choose the one you like best. In episodes with a bit of extra drama, you might need to go back and forth with a counter-offer or two.
Real life is a bit more complicated. There are a lot of terms and concepts you need to know about, and it's important to understand the basic process as well.
Don't worry, we have you covered! Here are the basics you need to know about Mason City real estate as well as first-time home-buying in general.
What You Need to Know About Mason City Real Estate
If you're looking to make your home in a small city, Mason City is the place to go. If you're ready to start your home search, though, you'll want to know more about the real estate market in the area. Get started with these helpful facts.
Mason City Has Low Home Costs
If it's affordability you're looking for, Mason City has it in spades. The median home value in the city is $88,000. Compare that to the median home value for the US as a whole, which is $220,000, and it's clear that Mason City is a great value for your hard-earned cash.
Of course, keep in mind that the median value reflects all of Mason City. Some neighborhoods have higher home values and others are lower. Make sure you find out the home values you can expect to see in the specific neighborhoods where you want to live. Base your expectations off those numbers, not the city's overall median.
Homeownership is High in Mason City
Throughout the country, 63% of American households own their homes. In Mason City, though, the homeownership rate is 74%.
In general, people who plan to stay in their home longer will buy instead of rent. With such a high homeownership rate, you can see that Mason City is a stable town of long-time residents. It's a great place to feel like you're part of a community.
The high numbers in homeownership are also a hint about how easy it is to buy a house in Mason City. Low ownership rates sometimes happen when a market is challenging to enter for first-time home-buyers, so they choose to rent instead. The high homeownership in Mason City sets it apart as a homeowner-friendly area.
Expect to Drive for Your Commute
Every homeowner-to-be has their own set of criteria they want in a home. For some people, their wishlist includes a home with plenty of activities and businesses in walking distance. Some home-buyers also want a home that's accessible to public transit.
It's important to note that those options aren't widespread in Mason City. 95% of the residents commute by car rather than walking or public transit. If you want to live in a walkable neighborhood, recognize that your options will be limited.
Don't get us wrong: Mason City does have public transit. While there's no rail system, the city does operate several bus routes. Still, the routes are limited compared to many larger cities.
If you will be reliant on public transportation, don't assume that it will be easy to access from any home you find. Focus your house search on homes near or along the bus routes.
Home Prices are Rather Steady
As with any other housing market, the home prices in Mason City go up and down over the course of each year. Compared to many other markets, though, their variation range has been rather small.
The home market was at its lowest in recent years in 2009 when the median home value was around $79,000. Since then, we've seen an overall increase in our current median value which is $88,000.
For the most part, this is good news. It means that Mason City's market isn't as volatile as many others in the country. The risk of you buying a home and then seeing the value take a dramatic nosedive is small.
Of course, this comes with a caveat that no one can tell the future. Anything can happen in real estate, but the data of the past suggests that you can expect a safe and stable home value.
The Market Has Seen Better Days
With that data on home values in mind, it's important to note that compared to other areas of the country, the Mason City housing market is slow. The experts at Zillow give it a score of 1.8 on the ten-point scale for market health.
While that sounds like bad news, the details paint a good picture for home buyers. One factor to note is that homes in Mason City tend to sit on the market for a long time. That means it's a buyers' market, so you'll enjoy low competition in your home search.
Another aspect of the health index is the number of homes in foreclosure. While it's always sad to see a foreclosure, it does benefit you as a buyer because it means you could find a home in a short sale or foreclosure for less than it's worth.
Tips for First Time Home Buyers
As important as it is to know the market you want to buy in, it's just as important to know about the home buying process in general. Here are some tips that can help any first-time home buyer.
Fire Up That Savings Account
Buying a home is something you need to plan for far in advance. You need to save up a down payment as well as closing costs which could be just as high as your down payment is.
It's best to save up 20% of your target purchase price as a down payment. If you can cross that 20% threshold you won't need to purchase mortgage insurance, which is one more expense you can cross off your list.
Even if you can't meet 20%, the higher your down payment is, the less you'll pay in interest over the life of your loan. Having some patients and taking the time to save up could save you thousands of dollars down the line.
Start by sitting down and defining your savings goal based on your target home price. Divide that up and create a set amount of money to set aside each month. You should think of this as a mandatory piece of your budget, just like every other bill you pay.
If you just decide to "save whatever's leftover" each month, chances are that you'll find yourself with fewer "leftovers" than you think.
Research Your Options
Getting a mortgage isn't as clear-cut and simple as you might think. For first-time home-buyers in particular, there are many types of mortgages and mortgage programs available.
Some types of mortgages will allow for a lower down payment than conventional mortgages do. They may help you get a lower interest rate too. Some prospective buyers even qualify for programs that will provide grant money toward their down payment.
This is why it's so important to take your time and do your research before you buy a home. You don't want to miss out on opportunities just because you didn't know they existed. A local real estate agent can help you find out what you need to know in addition to online research.
Get a Credit Check-Up
Along with developing a savings plan, another of your earliest steps before buying a home should be a credit check.
Your credit is one of the largest factors in whether you're able to qualify for a mortgage at all, along with the interest rate you'll be able to get. In other words, a poor credit score could cost you thousands of dollars in interest or it could prevent you from buying a home at all.
Start with a free credit report that shows you your credit score from all three major credit bureaus: Experian, Equifax, and TransUnion. Find out what factors may be lowering your score and make a plan to address them.
Some ways to improve your credit score can be quick, like paying down credit card debt. Others can take many months or more than a year. It's also important to find out how to avoid lowering your credit score, like applying for new credit cards. The earlier you start being vigilant, the more likely you are to have a strong score when it's time for a mortgage.
Imagine falling in love with a house and then losing out to other buyers because they have secure funding and you don't. Or worse, imagine negotiating and reaching a deal but watching it fall through because you can't get the mortgage you expected.
This happens too often to track, but it's completely preventable. The key is getting pre-approved for a mortgage before you start shopping for a home.
With a pre-approval, a lender will assess your credit, income, and other factors to determine how much they would lend to you. This tells you how much of a home you can buy while also making you more attractive to home sellers because it can make the sales process smoother.
Note that preapprovals are usually valid for two or three months. Don't get yours until you're serious about looking for a home, and recognize that you might have to renew your pre-approval if it takes too long to find your future home.
Buying Your First Home Like a Pro
Buying a house can be a nerve-wracking process, especially for a first-timer. There are ways to make it easier, though. Getting up to speed on Mason City real estate can go a long way toward helping you set your expectations and streamline your search.
To get started, begin your Mason City home search online today.