Due to new career options and financial independence, more married and single females than ever are having children later in life, getting college degrees, and transforming the nuclear household structure. Happy households look different for every family these days as more women are taking on a bigger role in their family’s financial decisions than before.
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While females are taking on more financial responsibility than their male counterparts, such as buying up more property, there is still more to be done within the housing market specifically.
Single females are buying more property than single males but are receiving less back on their initial investment. The 2019 National Association of Realtors’ housing trends report showed that single females made up 18% of homebuyers with single men following at 8%. That being said, a Yale study found that single females pay around 2% more when purchasing a house, but sell it for 2% less.
While 2% might not seem like much, after factoring the cost of a mortgage, single women are losing roughly $1,600 per year on average compared to single men.
Why does this gap exist? Dominant factors include the negotiation process and market timing. We’ll explore how to combat these below.
When it comes to negotiation, assumptions have led to women being discredited as good negotiators. However, a recent study examining salary negotiations found that women do “ask” as much as men yet don’t “receive” at the same rate. Some of the reasons behind this are due to biases made against women prior to the negotiation process. As a result, women need to come to the bargaining table armed with more information and be better negotiators than males to achieve their desired outcomes.
A National Center for Women and Retirement Research (NCWRR) study showed a direct correlation between a woman’s personality characteristics and her financial habits. Assertiveness, openness to change, and an optimistic outlook were the qualities that led to better financial choices in the study. These qualities can be incorporated into negotiation and buying decisions when purchasing a home, car, or other assets.
There are various strategies women can use in different financial situations to negotiate for the best price. The tactic you choose should be tailored to your specific situation. When it comes to house pricing negotiation it’s best to come well equipped with links to comparable listings, sales and specific data.
When it comes to home buying and selling, timing and influencing factors can also make or break an outcome.
On average, there are 473% more single-mother households than single father ones. And when children get in the mix, knowing when to walk away can become harder than it seems. If there is a strong demand for a property, then it will be harder for an owner to meet you at a lower offer.
On the other hand, many sellers want to get their property sold quickly. If this is the case, you can use their urgency to your advantage, promising to move forward quickly but at a reduced price. In the Yale study, on average, single men timed the market better than single females, so understanding when to move on a property can play a large role in achieving a better return on investment.
5 Home Buying Tips For Single Females
To help women overcome the financial barriers present in the gender housing gap and encourage smart money choices in general, we’ve listed 5 home buying tips below that can be extended into shaping up the state of your personal finances.
1. Build credit prior to making large purchases
Feeling confident when entering a negotiation or making a deal is crucial for getting the best return on your investment. Before mortgage, loan or home shopping, get a free credit report from one of the bureaus to make sure everything is in order. If you see any issues on your credit report, you will want to make sure they are fixed before moving forward. If you have poor credit, consider building it up before entering the home buying process.
2. Do your research
Do your research before deciding on an offer price. If a property has been on the market for a while, find out why. Learn about the actual rental market in the area where you are purchasing. Would rent cover a high mortgage payment? Also, look into whether the current owner has a mortgage or not. If the owner does, there might be room for negotiation.
3. Find comparable options
Learn the “story” of the house or object you are looking to purchase in order to find comparable rates. The story of the property impacts the value of it as well as investment potential. Find detailed comparable sales that were on the highest and the lowest end of the market.
4. Examine markets for growth
Examine other markets that indicate investment potential. Looking at the unemployment rates in the surrounding area is crucial for evaluating your property investment. You can gauge areas with a low unemployment rate and high population growth to ensure your investment is low risk.
5. Look past aesthetics
It might seem obvious but not looking past external beauty, like landscaping and paint quality are a recipe for disaster when home buying. In order to identify a home’s true potential, you need to focus on factors around location, growth and the structural layout of the property. Ignore any desires of buying “your dream purchase” to make yourself feel good. Instead, use your purchase to invest in your future and for long-lasting growth. Any home can be repainted and passing on a house for its aesthetics can cause you more in the long run.
For even more insight on the women’s housing gap, check out the visual below for eight additional tips around home buying like knowing your worth and learning when to walk away.