First Time Home Buying Secrets - Plan and Consult

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Transcript:

Anyway, do the needs list first. Two-car garage gotta have it. So many miles to UT, gotta have it. Put your needs down first because that’s your process of elimination. Then your wants and that’s the, “oh, it’d be nice to have.” It’d be nice to have trees. It’d be nice to have this or that. Just start picturing your house and the things that it’d be nice to have. It’d be nice to have a high-end kitchen with vaulted ceilings and lots of light. Wants are things that it’d be nice to have. And what we as realtors do is try to accomplish as many of the needs and a few of the wants if not all of the wants. The world of real estate is a matter of compromise. There’s all sorts of compromises that are made. But usually you’ll forget what you compromised on once you’re in that home. Believe me, there’s nothing like waking up after that first night in the house that you call home. There’s nothing like it when you get into it.

Discuss your timing. That’s a really important factor. If you’ve just signed a lease to rent a place and you’re planning on building your dream home, it’s going to take you a long time to get that accomplished. It’ll take you 6 to 9 months to build it depending on how big it is and depending on the builder. If you’re going to be building, you want to start about 6 to 8 months out before you need to move into the house so that gives you enough time to find the right neighborhood and the right builder and then that gives them 6 months to build it. If you’re going to buy a resale home, one that already exists, or a speculative home that’s one from a builder, you still want to plan about 90 days out. That gives you 30 days to buy the house and it gives you 60 days to go through the process and closing on it. So the time frame goes on a little longer. Also, this is the biggest thing about mortgages. With you buying this house as a real estate investment, how long do you plan on keeping the house? Real estate is a medium to long-term investment. In other words, you’re going to do well if you hold onto it for 4, 5, 7, 10 years. You’re going to do great. Mark my word, you’re going to do great. If you’re planning on moving in a year or two and you’re not planning on keeping that property, you’re probably not a really good candidate to buy a home because it’ll cost you too much to buy it, too much in closing costs, and then too much to sell it. So keep in mind that real estate is usually a medium to long-term investment. It also effects what kind of mortgage you get.

You want to discuss your finances. You want to discuss this as husband and wife and if you’re single, that’s fine too. You’ll want to discuss things with your accountant. You’d be surprised at how little it does take to get into a home if that’s the route that you want to go. And then there’s all kinds of benefits for putting a lot more money down. I had a lady who bought a house who works at IBM. She sold her IBM stock at 140 last summer. She turned around and took that money and she bought herself a piece of real estate in Millwood. She took that 20% down and she got a really good deal on that house. She only paid $212,000 and it appraised at $235,000. Now did she do alright? Yes. So look at your finances.

Finally, look at your credit. Kenton and Dominick will run your credit at no charge. They’ll get your credit score and if you need it, we have credit repair people. Their job is to get that FICO score up. FICOs are ruling the roost right now.

Next step is Consult. This is cool because I have GoToMeeting. You know what that is? That’s where you get on the computer and I can show you stuff like this over the computer. I’ve been selling homes and taking people through neighborhoods through GoToMeeting. In other words, we don’t have to even sit together, we just look through each other’s computer. They look at their computer and I look at my computer and we have a computer meeting. It saves on gas, saves on time, but most of the time, we’re going to meet face to face and do a one on one meeting to discuss your situation and consult. Consultation is the key. Because most lenders and realtors are perceived as what? Salesmen. But once you get past a certain number of years in the business, you get past that and you raise the level of professionalism. You reach the level of lawyer or doctor and it gets to the level of consultation. What I mean by consultation is asking questions and letting the client answer those questions, then coming back with reasonable alternatives, just like when you go to the doctor. What does a doctor do when you walk into his office? He asks you questions. Where does it hurt? How have you been feeling? What does your CPA do? He asks you questions. So you want to look for a consultant, not a salesperson. By the way, it’s really important to know who the realtor represents. Who does the onsite agent at DR Horton represent? They represent the builder, DR Horton. The sign that’s sitting in the yard of a home that says for sale, who does that realtor represent? The seller. What’s his responsibility or his duty? To get the seller the most money. So should you be dealing directly with the seller or the seller’s agent? Their job is to get them the most money. So what you really want to do is work with a buyer’s agent. What’s funny about that is that the buyer’s commission is already worked into the price of every single new and resale home out there, except for “For Sale By Owner” and we still work with them. That’s what’s really important. If you buy a house and don’t use your own representative, you’ve thrown away the fee that was already built into the price of the house. You didn’t get a better deal, you actually got a worse deal. Builders always have money that they call “leave on the table” because they know there’s going to be some negotiating involved on the sales price of the house. Sellers always price it a little higher than they’re going to accept. The seller’s agent cannot tell you that the seller will take less for the property. My job as a buyer’s agent is to find out any little thing that I can about the property that will get my client a better deal. That means if I go to the closet and I see nothing but men’s clothes on one side and nothing on the other side, I think there might have been a divorce and that this might be a motivated seller. My job as a buyer’s agent is to represent you so just make sure that you have your own representation when buying a house. That’s probably the most important thing in this. I see so many people who tell me that they bought from the builder and they got a great deal. I say, “oh, you paid what for it?” and it was too late because they bought it. Most agents represent the seller and it’s best to find a buyer’s agent.