How to Buy a Home

E184: Interview: How a 20-year-old Found the Right Realtor and Bought His 1st Home

This young man from Idaho had a goal: buy a home. After getting tired of paying rent, Quade decided he was going to do something about it. After educating himself about the home buying process, he got in touch with a unicorn team who showed him that he was qualified for way more than he thought, eventually leading him to his very first home at 20 years old!
Here are some takeaways from today’s conversation:
Paying forwards vs. paying backwards
Tools to help you budget wisely
Possibilities with home equity loans
Don’t get caught up in the increased monthly payment
Episode Highlights:
[01:25] How It All Started
Quade had always been interested in finances and loved to listen to financial podcasts at work. After getting sick of paying rent and watching the money go down the proverbial “drain,” he decided it was time to see if he could buy a home. After getting in touch with a unicorn team, he was approved and purchased his first home within a few weeks, even though he was still paying rent. Quade knew it was worth it to “double pay” because having a mortgage meant more value than paying on a lease, so he followed a well-planned budget to save up for the 3% down payment and closing costs. Also, it made sense because paying rent, you pay ahead for your month, but with a mortgage you pay backwards for the previous month. This can give renters-turned-owners some breathing room.
[20:30] Homeowner at 20
The average age of first-time home owners in the US is 36 years old, so Quade is ahead of the game! He purchased an older home that he can renovate and resell, hopefully giving him a boost into the real estate industry that he’d like to get into. He didn’t need to spend too much time finding the right neighborhood because he knew exactly where he wanted to be, so his unicorn team helped him prepare financially to be able to get into it. 
[32:12] Don’t Get Caught Up in the Expenses
Instead of being afraid about the expenses associated with buying a house, listen to David. If you are paying for rent and also looking to save, it might be helpful to change your perspective on how this really works. You aren’t taking on a new payment, necessarily. You’re replacing a monthly payment for a different type. By paying for a mortgage, even an increased one, you’re really combining your old rent payment and old savings payment. 

E183: Home buyers getting punished for good credit scores? Shownotes:

If you haven’t heard, the government is giving people with good credit scores higher interest rates when it comes to getting a home loan. WHAT? Why are they punishing good credit? 
Well, as usual, David Sidoni is here to give you the REAL story behind those clickbait headlines, and it’s not quite as bad as it sounds. But, keep listening so you know what’s up and how it affects you. 
Here are some takeaways from today’s conversation:
An overview of GSEs and how they work
Who will be affected by loan level price adjustments
A look at the numbers and data (of course)
Why this isn’t exactly the subsidy it sounds like
Episode Highlights:
[02:26] What’s Going On?
So, these headlines tell you that the government is the one behind all this. Well, not exactly. It’s a government-sponsored enterprise (GSE), which, in this case, is supervised by the Federal Housing Finance Agency and is run like a for-profit business. Weird, right? They’re called Fannie Mae and Freddie Mac and they are the ones that give out the loans. BUT it gets wilder. These loans, although the organizations are advised by a government-appointed director, aren’t backed or insured by government money. And it’s these ones that are facing the good credit score punishment, not ones that ARE backed by government money, so FHA, USDA, and VA loans are safe. 
[11:11] So, What Should You know?
So, those with higher down payments and higher credit scores usually pay less, but with this new policy, you’ll still pay less than people with low down payments and low credit scores, but the difference isn’t that big. So, it’s not as good for lower score people and not as bad for higher score people. Now, upfront fees for loans from Freddie and Fannie will face some changes called “loan level price adjustments.” These will tweak interest rates for many home buyers (remember, not those backed by government funds). 
[21:31] Is This a Subsidy?
To get to the point, it’s not exactly a subsidy. It’s not really a Robin Hood situation where you’re taking from the rich and giving to the poor. It’s really just minimizing the cost difference in the spectrum. But, as a business, this really just doesn’t make any sense because it doesn’t even the playing field the way it should. But don’t be too concerned about this, because if you’re getting ready to buy a home, this could change by the time you are ready. 
Resources:
How the US Is Subsidizing High Risk Home Buyers at the Cost of Those With Good Credit - New York Post
Setting the Record Straight on Mortgage Pricing - FHFA

E182: Interview: From ZERO Credit Score to Homeowner

David Sidoni sits down with How-to-Buy-a-Homie Weston from Nashville, TN, to talk about his home-buying experience. Now, Weston was in a unique position - he’s newly married, 30 years old, and had absolutely NO credit score! What?! Listen to his incredible home-buying journey.
Here are some takeaways from today’s conversation:
Building a good credit score
What happens when your credit score tanks
Being willing to go with plan “B”
Finding the right lender
Episode Highlights:
[01:31] Research, Confidence, and a Good Plan
Despite having no credit score, Weston was determined to buy a home. As a man who thrives on knowledge, he started diving into research to learn the best way to buy a home, eventually coming across David’s podcasts. He put David on 2x speed and devoured as many episodes as he could! The biggest challenge he faced was building a good credit score because he had NO credit. So, a month before he and his wife got married, he opened up a credit card to try and build good credit. But, he left his fear behind and jumped into the process. After connecting with his unicorn team, he was stunned by how attainable buying a home was, despite his unique situation. 
[13:08] Buying a Home During “Doomsday”
Everyone thought the world was going to end at the beginning of 2023 because interest rates were so high. But, that’s the exact time that Weston and his wife bought their house! They were lucky enough to be in an ideal scenario when the previous owners were more willing to negotiate. They were also prepared for full renovation projects - which many other people were looking at, too, in their area - but found that many of the prices were rising in their area because of that high demand. So, they needed to switch their gears and look for something a little more move-in ready.
[24:04] The Importance of Finding the Right Lender
When looking for a lender, it was tough for Weston to find one that would communicate well with him. But, getting in touch with a unicorn realtor led him to a lender that communicated like a dream. When it comes to making the biggest decision of your life, making sure your lender is engaged, wants the best for you, and knows their stuff is VITAL to ensure your process goes smoothly. 

181: INTERVIEW - From Apartment Life to Real Homeowner

David Sidoni sits down with How-to-Buy-a-Homie Corey from Dallas, Texas, to talk about his experience transitioning from an apartment to buying his very first home! Check out their conversation as they discuss the differences between condos and apartments, reverse-budgeting, house flippers, and so much more.
Here are some takeaways from today’s conversation:
The right approach to budgeting can help you save and pay off debt
Buying a home can mean compromising on your wish list
Beware of house flippers and their wild markups
Your unicorn team is your advocate in negotiations
Episode Highlights:
[0:30] Planning and Saving
Before buying a house, Corey knew he needed to tackle some student debt. So, he used the reverse-budget approach to save enough money for a down payment while knocking out student loan payments. The reverse-budget prioritizes long-term savings over a traditional budget's focus on month-to-month expenses, allowing you to save more money quickly. Reverse-budgeting allowed him to knock out debt quickly and get into a good position to buy a home. It worked so well for him, in fact, that he was approved for a loan within 72 hours!
[12:16] Picking the Right Place
After his record loan approval, Corey was ready to start looking at homes. He and his unicorn team picked out some neighborhoods that would suit his preferences and then started visiting. After viewing about 15-20 places, Corey settled on a condo in one of his favorite neighborhoods. While he did compromise on some things, such as his own yard, he was able to enjoy so many other amenities that he wasn’t able to enjoy at his old apartment.
[16:43] Your Relative Happily Ever After
While looking for homes, Corey didn’t have to face too much competition. But he found that investors are very likely to purchase homes in middle class neighborhoods and give them a quick “flip” for profit, often marking up the homes for way more than they’re worth. But, having the right unicorn team can help you sniff those homes out by looking “under the hood,” if you will. Veteran realtors know where to look to make sure you’re getting a good deal and warn you about the duds before it’s too late.

E180: Online Mortgage Calculators Are GARBAGE - Here’s Why

There are TONS of online mortgage calculators where you can type in your numbers and find out what mortgage you can afford. Sounds cool, right? Well, David checked them all out and the bottom line is that they are not accurate. In this episode, he gives you some truth bombs about the one-size-fits-all approach to buying a home. If you want a hint, think Chutes and Ladders. Sound familiar?
Here are some takeaways from today’s conversation:
Why mortgage calculators are wrong
Target shopping vs. flea market shopping
Preparing to buy no matter your situation
PERSONAL finances
Episode Highlights:
[1:30] Don’t Listen To Everything on the Internet
In the age of instant answers online, it can be super tempting to try and calculate what mortgage you’ll be approved for through an online calculator. But, wait! These mortgage calculators really only have 4 or 5 data entry points in order to calculate that number, which is totally NOT going to give you an accurate reading. These calculators don’t factor in taxes, 1099s, or marital status, or so many other things that could make all the difference, meaning that your answer could be off by $100,000 (over or under)! If you base your plan on a calculator number, it could take you down a chute and farther away from your goal.
[10:20] The Flea Market Approach
Some people might think that getting a loan is like going to Target where everyone spends $100 and gets the same end result. You’re all buying and it’s all equal and everyone has a loan of up to $400,000 buying the same goods. WRONG. Buying a home is like buying at a flea market. It’s not cut and dry, everyone is a different buyer buying from different sellers. It could be really great or it could be really sketchy - it totally depends on the buyer and the seller. 
[17:25] Your Relative Happily Ever After
Forget the 5 data entry points on your loan calculator: it’s important to talk to a professional because there is no one-size-fits-all approach to buying a home. And maybe you’re not ready to buy a home right now - that’s okay! Perhaps you’re living the nomadic lifestyle or it just doesn’t make sense to purchase a home because of your job. That’s totally fine. But talking to a professional allows you to prepare for whatever the future holds.

E179: FREE 1st Time Home Buyer Money - Too Good to be True?

Is there free money out there to help first time home buyers with their down payments? Um, YES. You just have to know where to look. So, stop looking at the clickbait-y headlines and listen to David Sidoni because he’s going to tell you all about it. 
Here are some takeaways from today’s conversation:
What’s in the news isn’t always true
Tax credit vs. free money
Loan modifications only help existing loan holders
If a program sounds too good to be true, it probably is 
Episode Highlights:
[2:46] An Analysis of the “News”
Headlines have been popping up all over the news featuring some great programs that will finally give first-time home owners the break they need… except the programs aren’t really all that great. David has some bad news: this is really just clickbait. 
[5:05] Biden’s Not-so-great Bill
In April 2021, the Biden administration announced a bill that would give a $15,000 credit to first-time home buyers. But, now it’s two years later and it’s still a bill and not a law, so, no money yet. But, this wasn’t even money that would help you buy - it was a tax credit that would help you AFTER you already purchased the home. 
[8:23] What HUD Had To Say
The U.S. Department of Housing and Urban Development announced that the Federal Housing Administration was going to increase 40-year terms for some loan modifications in an attempt to offer some post-COVID recession relief. Okay, pretty good, right? Well, somehow the headline got morphed into “FHA Approves 40-year Mortgage For Certain Home Buyers in May!” Well, isn’t that NOT the truth? This was not for home buyers, this was for loan modifications for existing homeowners. 
 
[10:39] CA’s Empty Pockets
The state of California announced a program that was giving away free money to home buyers. Crazy! So this was actually true, but the catch is that the loan program ran out of money in just two weeks and now it’s on hold again. Also, it sounded amazing, but there were so many catches that it applied to only a very certain number of people and may cost homeowners in the long run. 
Resources
https://smartasset.com/taxes/first-time-homebuyer-tax-credit 
https://www.hud.gov/press/press_releases_media_advisories/hud_no_22_070 

E178: Interview with Margaryta – Single lady with a goal to buy her first home by 30

Margaryta had a goal: she was going to buy her first home before she turned 30. After an unsuccessful experience with an Instagram realtor, she decided to pull out the big guns and work with a UNICORN TEAM. Now, Margaryta is enjoying her first home and we are so excited for her. 
Check out her conversation with David Sidoni as they discuss her home-buying takeaways, lessons, and advice.
Here are some takeaways from today’s conversation:
Research your realtors before working with them
Work with your lenders to get better rates
Check out your desired neighborhood at all hours of the day
Invest in a home warranty or homeowner’s insurance
Episode Highlights:
[3:09] Instagram vs. Reality
After living in a rented home in Washington D.C. for many years, Margaryta decided to work with an Instagram realtor to help her accomplish her goal of buying a home of her own. But, instead of accomplishing her goal, Margaryta backed out of the deal because her realtor showed her that she was just another sale, not a person looking for a great place to live. But, after getting in touch with a unicorn realtor, she got some great advice and found the home she was looking for!
[15:25] Margaryta’s Biggest Takeaways
In her first year of homeownership, Margaryta had to replace her water heater and her HVAC system! Unfortunately, if she had invested in a home warranty to help mitigate some of these costs, especially after the appraiser warned her during the appraisal that those costs would come up soon, she could have been more prepared. So, while a home warranty might seem like a wasted expense, there are moments just like this that make it all worth it. It also shows the importance of having professionals view your home to make sure you know all the ins and outs. 
[22:11] The Epilogue
While Margaryta’s interview was fantastic, there was so much more helpful and inspiring info that came after the official recording. Margaryta is actually from Ukraine and moved to the U.S. at 19 years old and made the goal for herself that she would buy a home by age 30. Now, with the war in Ukraine, her mother needs a place to stay and she has a home that she can share with her. How incredible!

E177: How to win in BIDDING WARS in 2023 – Part 3

Alright, folks, David Sidoni is here for the last part in his three-part mini series about BIDDING WARS. Check out this final installment to learn all about getting loans, making your offer stand out to sellers, and how to navigate buying a newly built home. 
Here are some takeaways from today’s conversation:
Why waiving an appraisal could speed up the process
How you present the loan in your offer
How to sweeten the deal without changing the price
Why buying new homes is just as challenging
Episode Highlights:
[0:59] Loan Tricks You Want to Know
One way to sweeten the deal and get ahead in the bidding process is by waiving the appraisal. This happens after the sale and is really for the lender to make sure they don’t overpay for this home. But, you can use this little bureaucratic hoop to help you make sure you get the home and not overpay in the war. But, this can get pretty complicated, so it’s VITAL that you check with your unicorn team first. 
[17:37] Offer Profit Elsewhere
When it comes to making a great offer, price is not the end-all be-all. Instead, think about other ways that you can make your offer stand out and give them more profit all without changing the purchase price. A seller doesn’t get all the money from a sale - they have tons of fees here and there that they need to pay in order to complete the sale. By offering to take on some closing costs, you can make sure the seller is taking home more of the sale price, therefore ensuring they walk away with more PROFIT.
[20:29] Buy New Doesn’t Avoid the Bidding Wars
So, you want to avoid the bidding wars entirely so you just figure, “I’ll buy a new home!” Well, bad news. Builders are not nice and make the process even worse for you, the realtor, and everyone - especially first-time home buyers. They set up these lottery systems and hide a lot of fine print.  That stinks!. So, make sure you have a realtor that will protect you! 

E176: How to win in BIDDING WARS in 2023 – Part 2

David is back and he’s continuing in his discussion about preparing yourself to win your first home in a bidding war with multiple offers. If you haven’t listened to the first episode, go listen to that one and then jump back here. Already listened to it? Great! David is wasting no time and starting right back where he left off. Let’s get to it. 
Here are some takeaways from today’s conversation:
David’s tips to make yourself stand out
Why it’s important that you and your realtor know the area
List price vs. sale price vs. sold price
Your OFFER and loan tricks
Episode Highlights:
[02:21] Know How to Navigate the Market
After building your super strong support team, then you can get ahead by starting to look at homes on Zillow. But, there are a few things you need to know before looking that will make the bidding process go a lot smoother. The first thing is to make sure that you and your realtor have a good idea of home prices in your area so you know how much homes are going for. The second is understanding the difference between list prices, sale prices, and sold prices. List prices are garbage! 
[08:48] What the Sellers Are Really Looking For
Picture this scenario: a realtor is selling a house and has 18 offers in one day. This person needs to pick the top 5 offers to show the seller so they can make counter offers. This realtor is flipping through them and sees the name of a unicorn realtor that they’ve had dealings with before and who has a great reputation and has a track record of making everyone happy… and then a bunch of other offers from other folks. Who do you think they’ll pick? THIS is why it’s so important to pick realtors who know what they’re doing and have been doing it for a long time. 
[10:41] Bidding Tips and Tricks From David
There’s a lot to unpack in this section, but here are a few highlights and tips you’ll want to know:
You really can’t overpay on an offer as long as you retain your appraisal contingency.
Your offer needs to be presented professionally and correctly in order to really be considered by a seller’s agent.
Never offer a round number.
Max out your earnest money deposit.

E175: How to win in BIDDING WARS in the 2023 market

After a crazy several months of high interest rates, inflation, a recession, and even a bank crisis, the housing market has gone through a lot of highs and (even more) lows. But, despite it all, demand for homes is still high, which means that bidding wars are BACK. So, how do you get your offer on top of the pile when the bidding gets tough? David tells all in this latest episode.
Here are some power takeaways from today’s conversation:
As usual, low inventory is the problem
There is no logic and no math in bidding wars
What you need to know to win a war
Prove your legitimacy with your offer
Episode Highlights:
[04:22] How Much Should You Offer?
When it comes to making an offer on a home, there is no spreadsheet answer to how much your offer should be. Sorry, engineers, but that’s the truth. When multiple people are putting offers on a home, the value is not determined by logic or math - it becomes subjective. Because the seller is the seller, they can handle the sale any way they want to. Any spreadsheet you’ve made, well, throw it out. 
[07:46] The List You Really Need
In a real bidding war, a spreadsheet won’t help you. Instead, David’s list shows you what you need to survive one like a champ. Here it goes:
Don’t give up.
Believe.
Be ready to compromise.
Talented professionals can speed up the process.
Ultimately, having a solid support team is really going to get you the help you need. Finding someone who is a seasoned realtor and knows the prices of homes in an area will put you at an advantage.
[10:41] Building Blocks for Bidding Success
This part of the podcast is where David really dives into the nitty gritty behind winning bidding wars. First, you need to make sure you have a solid support team. Second, there are some things you can put in your offer to sweeten the deal. Sometimes a higher price just won’t cut it, but offering to cover the closing costs might. Next, how to chat with your lender about removing certain contingencies to make you even more legit in front of the seller. Lastly, how do you counter an offer? 
 
Resources Mentioned:
https://www.howtobuyahome.com/podcast/