Definition of Experienced Buyer
Unlike a First Time Homebuyer (link to FTHB definition), an Experienced Buyer has been through the home buying or selling process before and has owned more than one home at some point in their life, whether by owning multiple properties at once or by moving from one property to another. While First Time Homebuyers are new to the process, an Experienced Buyer has been through the real estate transaction, is considered a repeat buyer, and understands what it means to acquire and maintain a home for personal or investment purposes.
History & Origins
As you hit more personal goals and phases in your life, your real estate journey evolves and you become more experienced along the way. Everyone starts out as a First Time Homebuyer, with all the learning curves that come with understanding the home buying and selling journey. From there, a time may come when a First Time Homebuyer needs to move to a new property, whether for reasons of job change, family obligation, acquiring another property for investment purposes, or other logistical factors.
Once a buyer has moved from their first to second home, they have become an Experienced Buyer, with more practice and expertise gained during the real estate transaction. Experienced Buyers understand the benefits of owning versus renting a property, and how homeownership can help set down roots in a community that can be beneficial in the long-term.
Real Life Applications
While Experienced Buyers may have been through the process before, they still need professional assistance in securing a loan and finding the right property to fit their needs. The loan qualifications for repeat home buyers are almost exactly the same as they are for First Time Homebuyers. However, the process will largely depend on whether an Experienced Buyer intends to keep their current home and purchase an additional property, or sell their current home and purchase a new property, or take on an assumable mortgage.
Buying a second home, a vacation home, or an investment property requires a different loan approval process. Experienced Homebuyers may choose to invest in a property for business purposes, and decide to become a landlord and rent out their property for extra income. Experienced Buyers may have more confidence in the real estate transaction and be more inclined to move if the market is in their favor and they could get more for their money by selling.
The Last Word
Experienced Buyers have been through the process before, but there are always new developments and variables in the market. If you own property already but find that you’re ready to take the next step in your home buying or selling journey, be sure to talk to a professional to ensure you are educated on the present real estate climate to help you make the best choices for your current situation.