Podcast

Ep 138 – First Time Home Buyer Terms And Definitions From A-Z – “P” Part 3

HBH 138 | Terms And Definitions

HBH 138 | Terms And Definitions

 

Who knew buying your first home would need THREE entire podcasts to cover all the terms that start with P? The exciting conclusion, part three, of the full glossary of all the new and funky words you’ll need to know when buying your first home. David Sidoni starts with the term pre-approval. He disagrees that the first step in buying a home is getting pre-approval from lenders; instead, finding a unicorn realtor should be first. The realtor will recommend a lender they know that is as good as someone you could find on your own. David also shares some positive strategies and facts along the discussion as he lists down the remaining terms and definitions that start with P. Tune into this insightful episode!

First Time Home Buyer Terms And Definitions From A-Z – “P” Part 3

The Glossary Of All The Words You Need To Know When Buying Your First Home

The exciting trilogy conclusion of the letter P, terms, and definitions. Get your popcorn and let’s do this.

Are you intimidated and freaked out about trying to buy a home? Subscribe, like, and hit the notification bell. We’re going to be bringing lots of valuable information a couple of different times a week.

Now, the exciting conclusion to the letter P. This is P part three. We’re going to start off with a bang. Our first P is Preapproval, a term I’m sure a lot of you have heard a lot about. If you’re a Homie, you know that this term was incorrectly originally described in the M episode under the mortgage pre-approval. Let me clarify again. It is my job to crush the confusion of buying your first home and not help build it up since I biffed on that one. There are two types of pre-loan validations. Before you get a loan, you’re going to get a prequalification, which is garbage and useless and is a prequalification letter’s toilet paper.

Pre-Approval Letter

You have preapproval. You get both of these in a form of a letter and they come from your lender. One’s called the pre-qualification or the pre-qual toilet paper. The other one is called a preapproval letter. Most good realtors are not even going to show you a home unless you have one of these. All over the internet, even if you’ve only done your first ten seconds of research into buying a home, you’ve probably read or heard this. Your first step in buying a home is to get pre-qualified with the lender so you know what you can buy. Remember, we’re starting a revolution, and I want to make sure that you guys understand, first, in my humble opinion, this is totally wrong.

Don’t ask your parents about this. Don’t ask your brother who’s a lawyer or your friend who’s a financial advisor because you are not going to hear a lot of people out there who agree with me for completely disagreeing with the mantra that your first step is to get pre-qualified or pre-approved before you even talk to a realtor. Why would you want to waste time with the realtor? You need to get started with a loan first. I’m bringing you insider information. I have been since 2019. I’m starting a revolution here for your benefit because the entire system is broken. If you’re a Homie, you’ve heard me say it 1 billion times. Sometimes they do stuff for them. It’s wrong for so many reasons.

I get it, sometimes the intention behind this statement is earnest, and they are trying to make sure that you know what you’re getting into before you get started. The overall sentiment has been made completely and totally corporate. It’s designed to find out if you’re a customer and then make you a customer. It is not designed to serve you best and help you buy a home that’s the best thing for you. The trick is to serve you best. You should go out there and find a unicorn realtor who has the experience and is willing to help you work with the planning so that you have the best options when you’re ready to buy.

You should go out there and find a unicorn realtor who has the experience and is willing to help you work with the planning, so you have the best options when you're ready to buy. Click To Tweet

When you buy a home, one of the biggest things you’re going to have to understand is that you’re going to make some compromises. You want to make as few of those compromises as possible. Once you’ve got a great realtor, their recommendations from the people that they know, they can get you to a lender that’s going to be just as good as anyone that you could find on your own, and then you can get the preapproval from someone who has a relationship with the realtor. Trust me. It can happen. Know there are no kickbacks involved. In fact, that’s illegal. By creating this team, you set yourself up for the best possible option for yourself.

Now you’ve got a team whose sole intention is to work with you for the long haul and help you create a plan, not just answer the phone and find out what you qualify for and buy you a house right now. That’s what can happen when you go and try to get pre-qualified right away. They’re going to run your numbers, tell you what you qualify for, and then send you to some other random realtor with that pre-qualification, not a pre-approval, and then they’re going to send you out to go home shopping.

If you’re new to the show, I’ve discussed this a million times before. I’ve had several buyers bring this up to me in the episodes when I interview them after they close. They said that this worked the absolute best for them. If the concept is new to you, or you’ve never heard this before, welcome to the show. I encourage you to search the archives at HowToBuyAHome.com and look for those interview episodes where a lot of them talked about doing this process and how helpful it was for them. You can also search any of the episodes where we talk about home mortgages and home loans.

If you are a Homie and you read every episode, you read the little retraction episode I had to make when I transposed the definitions. Let’s explain how these two pieces work again. A pre-approval is what you want. That’s the document that tells you how much you can afford to take out on a home loan. It’s the first step in getting you a mortgage. When you apply for pre-approval, your lender’s going to ask you for all the verification stuff. You’re going to need your credit score, your income, your assets, and other financial information. You’re going to give the documents to them. It’s a crazy concept. You have to show them the documents.

They’re going to verify your debts, your income, and your salary, and pull your credit. Search previous episodes to help dispel the myth about pulling your credit being a bad thing. It’s not. More people get hurt not pulling their credit 12 months or 6 months before they buy a home than the people who think that they’re going to be cute and wait.

Your lender takes all this information and they’re going to tell you how much you qualify for when you’re buying a home. It’s a super important step, but not one you need to take with some random lender that you find online, your best place to start with that awesome realtor, and then they’ll give you the recommendation to find a local mortgage broker who can give you the same information you get from the rando online, but now you got that team in place.

Pre-Qualification

The other one is called a Pre-Qualification. That pre-qualification is someone asking you a few questions over the phone, punching it into a little program they have, and then telling you how much house you can buy. Maybe they’re going to send you a copy of a letter. If you have a printer, and I’m not sure how many of you do, go ahead and print it out and wipe your booty with it. It’s toilet paper. Let me explain why pre-qualification is garbage.

They involve no asset or income verification. My child could call a lender and give the information over the phone to someone and get a pre-qualification approval and a pre-qualification letter. If you present that pre-qualification letter to a seller or to an agent representing the seller, you’re saying, “How are you doing? I want to buy your home. I want you to sell it to me, but I have not done the proper preparation to present you with an offer to show you that I can buy it. I’ve chosen a realtor and a lender to represent me that don’t know the difference or just don’t care. They’re going to be clueless and probably have major nightmares in this transaction. Don’t you want to sell the home to me?”

See? They’re garbage and they make you look bad. Zero verification, zero documentation. They are the opposite of any sensation that is sweeping the nation, and they’ll cause massive devastation if you attempt to use them to prove your compensation. They’ll likely put you into a state of inebriation and several libations to soothe your consternation. When your parents ask you where you’re getting all this detailed information, please, for the love of God, don’t let them read this.

The moral of the story is don’t ever shop without a full preapproval or you are massively jumping the gun. You need to do more planning, not because you’re wasting anyone’s time, that’s not the big issue, but because if you don’t do that, you might be missing out on some serious beneficial loan options that could massively improve your buying potential. It takes planning, my favorite P word.

Don't ever shop without full pre-approval. You need to do more planning, and if you don't, you might miss out on some serious beneficial loan options that could massively improve your buying potential. Click To Tweet

Pre-Foreclosure Sale

Moving on to the next P word, Pre-Foreclosure Sale. These are modifications or new agreements between the borrower, the homeowner, and the bank. I know that’s not what you thought it was, but most of the time when my buyers see pre-foreclosure sales, they get all excited. These are just these arrangements that are being set up so that eventually and potentially, they can sell the home, they being the bank, so that they can satisfy the loan and avoid foreclosure.

Again, I know a lot of you get excited about it because the big internet home shopping sites love to use this word when a home is for sale that maybe has missed a few payments. Buyers get super excited because they think they’re going to get foreclosure. For some reason, every buyer out there thinks foreclosures are a great deal. If they’re not, we’ll talk about that later.

It makes me laugh how the word foreclosure gets buyers all tingly and excited. In this case, when they use the word pre-foreclosure, it’s a bait and switch. It’s a trap. Don’t buy into it. Most homes in 2022 have tons of equity in them. Anyone who has an issue with late payments, that can be remedied without the bank having to come in and sell the home as a foreclosure. They can probably sell the home with the equity because they’ve got plenty of value in the home.

That turn term for a home that doesn’t have enough value in it is called upside down, but that is not happening right now. People could sell their homes with plenty of profit whenever they feel like it. Right now, in the United States, I don’t have the Canada Stats, but they’re probably similar, there’s $3.6 trillion in equity in the 6.6 million homes that have mortgages on them. That, of course, doesn’t even include the homes that have no mortgage because they’re totally paid off and they’re free and clear. Of those 6.6 million homes which have $3.6 trillion in equity, there are only 200,000 homes in the entire United States that are upside down. The huge increase that you’re hearing about in foreclosures, you might see that headline in a lot of different places. It’s straight-up clickbait.

Picture a chart going from the top way down to the bottom and then it comes up just a little bit. When there’s nowhere to go but up since we took a slide all the way down, it went up a little bit in 2022 and it’s a rise, but the entire United States only had 65,000 foreclosures in 2021. That was 25 times less than the last time we had big foreclosure numbers. In 2022, we’re not at 65,000 because that was the lowest in history. We’re sitting at the second lowest in history. In 2021, it was 65,000. In 2022, it’s 165,000. It’s up, but it’s still the second lowest we’ve ever had in many years and 20 to 25 times lower than the 1.33 million we had in 2008, the 1.52 million in 2009, and the 1.65 million in 2010. We’re only 165,000. This is not 2008. Foreclosure is not going to crash the market.

HBH 138 | Terms And Definitions
Terms And Definitions: The entire United States only had 65,000 foreclosures last year.

 

If you see that pre-foreclosure on Zillow and Redfin, you get excited and you want to run out and grab that home. Remember how little the number of homes that are actual foreclosures is. What are the odds that when there’s such a small percentage of them and everybody’s got so much equity out there and there are few homes in jeopardy of foreclosure?

What are the odds that one of those rare homes that do end up maybe becoming a listing as a foreclosure is going to be, 1) In your area, 2) The type of home that you’re looking for, 3) Not a gigantic money pit, and bonus to get to the real, 4) If there’s not that many out there and most of the people who buy foreclosures are investors, then your chances shrink even more because the investors are going to be chomping to the bit. Don’t be mad at me. I’m just the messenger. Blame your parents for not having you twelve years earlier so you could have bought a home back in 2010 when there were 1.6 gajillion foreclosures on the market.

Preliminary Report

Our next P is called a Preliminary Report. This is in regard to your title. A preliminary report is required for the title insurance company to issue a title insurance policy. It reveals any issues with the title that need to be dealt with by the seller in order to deliver a clear title. If you’ve never bought a house before, that’s probably the word title more times in one sentence than you’ve ever heard in your entire life. The title gives detail of ownership. It tells who owned it, and the history of who owned it. It talks about liens on the property and easements.

The title company gathers all this research and puts it in a report by searching the existing property records at the county recorder’s office. In most transactions, all the liens, the titles, the taxes, and otherwise, they have to be clean, is the word that they use. Everything has to be satisfied in order to release the property to transfer ownership. Make sure you’ve got a great team of advocates working for you to make sure that you do have that clean title. What you don’t want is something they call a cloud on the title.

Premium

Our next P is a Premium. That’s an amount paid on a regular schedule by a policyholder that maintains your insurance coverage. I’m sure you’ve heard of paying your insurance premiums. The reason why I’m telling you right now is got to make sure that you pay this or know that your lender is paying your insurance premiums if you have your insurance impounded in your PITI. Isn’t this fun? Now you know all these words, impounded and PITI. I can sprinkle them into a sentence and you know what I’m talking about.

Prepaid Costs

Our next P word goes into some important stuff for first-time home buyers, Prepaid Costs. It’s going to sound weird, but the real definition is that prepaid costs are payments made at closing because you’re going to have line items at your closing for items that you will need to pay in the future for your new home and your new home loan. They’re called prepaid costs because you’re going to be paying for them before they are technically due. The most common kinds of these prepaid costs are homeowners’ insurance, property taxes, and mortgage interest.

HBH 138 | Terms And Definitions
Terms And Definitions: The most common prepaid costs are homeowners insurance, property taxes, and mortgage interest.

 

These are paid into an escrow account usually held by your lender to ensure that you have the money to pay for these pieces that you have to have in order to keep a loan on the property. They build up the account, make sure you’ve got enough in there, and then they’ll pay for it when the balances come due. These prepaid costs can’t be financed so they can’t become part of your loan. This is the extra cash payment that you have to make at the closing over and above your down payment. Does this sound familiar? Does anyone know what that is? We have to go all the way back to the C episode. These prepaid costs, that’s the answer to the mystery. What are closing costs?

This is the answer to the mystery. This is why no one can precisely tell you how much closing costs are going to be. They can’t be accurately measured until you’re under contract and until you have a specific closing date because all these prepaid items are attached to that date. It bums me out so much. I wish I had a better answer for you, but I don’t. I can’t give you an exact precise number, neither can your unicorn realtor, or neither can your unicorn lender.

That accurate, exact precise number can’t happen. We can give you maybe a percentage, an area what it usually is because these prepaid closing costs can be different depending on the date that you close, not to mention it can completely change depending on where you are on the tax calendar, sometimes in the HOA calendar and sometimes depending on when you close on your mortgage, how much you have to prepay on that interest.

For you spreadsheet nerds out there, I wish I could be more specific, but I’m going to say somewhere between 2% to 4% of the purchase price. That’s the number that you need to assume. The worst-case scenario is you’ve got a little cushion on top of your down payment and your estimate. I’m stumbling right now because this is enormous. This is gigantic. I’m trying to find big words. This is huge for when you are planning to buy a home.

I always tell people, “Air on the side of cushion, not caution, and shoot for the bigger percent, 3%, 4% of the purchase price,” because what’s the worst thing that can happen? You save up the 5% and then you save up 2%, then you go, “Let’s keep saving.” You save up 3% and 4%. What if it’s only 2%? Cool, now you have extra money. Sorry, what a terrible plan I put you under.

In a quick protection side note about this, I’m already starting to see it online. You’re going to start hearing suddenly out of nowhere, a lot more people marketing and talking to you first-time home buyers. There’s going to be a lot of new chatter here at the end of 2022 and especially in 2023. It’s mostly coming from realtors and lenders. They need clients. They need buyers and borrowers.

They’re going to do lots of sexy marketing telling you that things are changing and that you don’t need to pay your closing costs anymore. They’re going to tell you the market has changed and now you can get the seller to pay for your closing costs. Technically, this could be something that can come up, but your good team is going to plan as if you don’t need to. If you’re in the right situation with the right options, you can ask for it.

Even though we might be seeing a little bit more of this happening in the market, even though people are going, “This is happening. I see changes happening,” okay, but big old but. If you have the ability to save more, if you’re in a situation where you can live 70/10/10/10 like I’ve talked about while you’re saving up the down payment, then you’re going to be giving yourself the option to ask the seller if they’ll cover your closing costs, where it’s not mandatory that you ask the seller to cover your closing costs.

This is something you might be able to ask for if you’re the only buyer offering, but if there’s more than one buyer, you and your team should discuss the best strategies and the best ways to win the deal. That might include not asking the seller for closing costs so that you look like the better buyer. Once again, it all comes down to options. The more options you have as the buyer, then the stronger you can present yourself when you’re negotiating, and the better chance that after this whole year of planning, you’re going to nail it and be able to buy that home that you’re excited about.

If you’re freaking out a little bit about the idea of having to save an extra 2% to 4%, when you’re already working your butt off to try to save 3% down or 5%, 10%, or 20%, let me give you some positive strategies and positive facts. The first one is if you’re trying to buy a home using grants or other down payment assistance programs and you have to ask for the seller to pay for these prepayment costs that every single buyer has to go through to pay when they’re trying to buy a home known as the mysterious and uncalculatable closing costs or if you’re one of those people who have just enough money saved to barely cover the down payment, 3%, 5%, 10%, I’m not saying that you have to save it up. You might be able to ask for the closing costs.

Remember, I’m not here to blow smoke up your keister and I’m not trying to oversell you with all these sexy ways to buy a home with no money. That’s not my jam. I don’t need you to pick up the phone, call me, and buy my workshop. Can you do this? Yes, perhaps. Don’t let my real talk stop you. If you’re in a situation and you’re ready to go, go for it. Give it a run. This should encourage you to realize exactly where you are and to figure out where your options are at that time.

Maybe you are right there, but you need the closing costs covered, but now you know that and you know exactly how much more you need to save, or you can start giving it a run. You can always put some offers out there and see what happens while you’re trying to improve your options at the same time. The neat thing is that now that the market’s shifting, you might be able to get those prepaid closing costs covered by the seller because things are shifting. It’s all the more reason why you, the person that might need a little bit of help getting things started, should start a plan 12 months, not 12 weeks before you want to get out there and start writing offers.

You can always put some offers out there and see what happens while trying to improve your options simultaneously. Click To Tweet

This is why that long-term relationship that you set up with the realtor that you interview or unicorn realtor or unicorn team is crucial. Work with experienced people because they’re going to know if you’re going to have the potential opportunity to negotiate for these closing costs. There’s no blanket statement about this process that is totally predicated on the market conditions. If someone did something months ago, when you put an offer in today, their information is probably obsolete.

I’m not kidding. In 2021, it was a whole different world. You couldn’t ask for closing costs because the seller had multiple buyers around every single home. In fact, the seller would demand that you remove your inspection and appraisal. Plus, you had to prove that you had tens of thousands of more money to show them above and beyond the list price because they’re going to get all those lucky people in a bidding war and bid them up $50,000 or $100,000 over the price. Now that’s changing. The market is opening up for more options for you.

Once again, it’s always all about options. The more planning you do, the more options you get. Sometimes things will just fall in your lap. You want to be ready to take advantage of those opportunities. To wrap things up in this extremely important explanation about these crazy confusing closing costs, they’re intimidating, they’re freaking frustrating, and unfortunately, these new realtors and pretty predatory lenders know that this is confusing to people. Now the market’s shifting. They realize that tons of buyers out there who have been scared and waiting on the fence, maybe suddenly are starting to poke their heads out a little bit, start thinking about dumping their rent and looking to buy a home.

The more planning you do, the more options you get. Sometimes, things will fall in your lap, and you want to be ready to take advantage of those opportunities. Click To Tweet

I’m telling you, be careful. I mentioned it. You’re going to suddenly start seeing lots of new realtors and new lenders marketing to you about these sexy, no-money down, getting the seller to pay for your closing costs. You’re going to see their social posts, their workshops, and their classes, but I’m telling you, please check their records. Look at the track record. Realtors and lenders who are looking for a paycheck love to follow the trends of the market. Good for you, you’re trendy. How about that?

Suddenly, they’re going to start advertising themselves as experts to you because you’re the person that’s going to get them paid. Real estate workers, just like social media, follow trends to get your attention. It’s so that they can get that paycheck at the end of the deal. Most of the first-time buyer education that you see popping up right now and for sure that you’re going to see in 2023 is because these realtors and lenders have been advertising to sellers for the last several years. Now that these sellers are not easy prey anymore. In fact, they’re getting bummed out when they list their homes because someone tells them they have to maybe do a price reduction, now they turn around and look for the easy deals.

They always want to look for the low-hanging fruit. That’s you, low-hanging fruit, and their payday. Always check the track record to see the experience of these experts who have always had the first-time buyers’ best intentions. I don’t usually bring out Caddy David, but for this, I’m going to make an exception just for you guys. I want to make sure that you protect yourself and avoid any ugly situations because things are changing and you’re going to hear a lot of different noises out there. Some of these so-called professionals are going to be trying to lure you in so they get paid. He’s coming in right now. He’s over there. That’s Caddy David. Caddy David, what do you have to say?

“I’m Caddy David. Let’s take a look. Realtor, Lender, suddenly marketing no money needed to buy-a-home programs. Let me check you out real quick. It looks like you’re a new agent and you’ve got lousy training and your broker mostly taught you how to start a TikTok. You’re mostly just trying to figure out how to get buyers to notice you, but it looks like you’ve had your license for less than 1 year and you’ve got 3 sales. It looks like here in early 2022 that you are marketing to sellers and telling them there’s no better time to sell your home and that you were the pro for them. Suddenly, why the switch to the marketing to this first-time buyer expert with no money down?”

“Mr. Lender, I’m taking a look at you too. I see that you did most of your business in the last five years working in refinances. That’s because the rates were the lowest in history. I understand that. I see what you’ve been doing. Now I see this new marketing you’ve got here. That’s telling people that you’re a purchasing expert? That’s what you focus on? Do you mean that completely different product that’s totally different than what you’ve been focusing on the last few years? I’m going to make sure I send all of my buyers to your website. It sounds like you’re working in their best interest.”

I’m back. Sorry, you had to hear that guy. After a few years of the show and several years of posting videos and education for first-time buyers, I am not a fan of first-time buyers being sold this terrible bill of goods. I don’t like these unqualified posers trying to make a book and not respecting the importance of the service that they are shelling out to you. You guys deserve better and you can start the revolution by staying educated.

Prepayment Penalty

Speaking of educated, let’s get back to it. Prepayment Penalty. This is weird, but a prepayment penalty happens. Sometimes loans have a fee if you pay it off early. I know it’s strange, but a prepayment penalty happens sometimes when you pay off your mortgage early. Make sure you check out and see if the loan that you’re getting has a prepayment penalty. FHA loans and some loans made by state-chartered banks don’t allow them. If no one talks to you about it, maybe it’s because your loan doesn’t have one and it can’t have one.

HBH 138 | Terms And Definitions
Terms And Definitions: A prepayment penalty sometimes happens when you pay off your mortgage early.

 

Principal

Our next P is the Principal. The principal is the original amount of the loan, excluding the interest, and the interest is charged based on the unpaid principal of the loan. Another thing to think about your principal is that it’s the money that has not been repaid to the lender yet. Sometimes it’s called the outstanding or unpaid principal balance. It’s the amount owed minus the amount that you’ve already paid. Remember, most of the time when you’re making those payments, the first few years of owning a house, most of it is going towards the interest and you’re paying little down to the principal.

Probate Sale

Our next P is called a Probate Sale. This is something that’s important. A probate sale happens when the homeowner dies without writing a will or leaving property to someone. From the sales side, I can talk to you a lot about it, but from the buyer’s side, a lot of people get all excited. They say, “A probate, I’m going to get a deal on this.” Once again, not to be Captain Buzzkill, but let me explain the way this works.

In a probate sale, the probate court is going to authorize an estate attorney or another representative to hire a real estate agent to sell the home. The process is most of the time much more complicated, and therefore it’s going to take much more time for that contract period than a conventional sale. Don’t think 30 days, think 60 or 90. Some of them do this thing that I don’t like because it confuses you, guys.

They put the home up for a list price, but sometimes probate homes need court approval before the price is approved. That list price might not even be something that they’re willing to accept or that the court lets them accept. Sometimes the beneficiaries are like sons and daughters or brothers and sisters who are all angry at each other and don’t trust each other. The court has to decide when they get a number that’s going to work.

When the home is listed online, it doesn’t say court approval right next to the price and you look at it and get excited and think, “This is a great deal.” Be careful when you see something that’s listed as a probate sale. If it looks too good to be true, take a look and see all these sold homes in the area. You’ll know exactly how correctly or incorrectly priced that new crazy probate listing is.

We get to the Promissory Note. That is a written promise to repay a specified amount over a specified period of time. A promissory note is like a loan. It’s a term that you should know because you’re going to hear it with lots of different types of loans, not just mortgages. We get to another one that is important for you first-time buyers, Proof of Funds. You need it. You must have it. Mic drop.

Proof Of Funds

When you get ready to submit an offer, if you want to up your chances, you always need to send a copy of your proof of funds. It’s the bank statement showing your account with all the money in it that you need to buy the home. Don’t worry about it. If you black out the account numbers, you’d be all safe, but the agent needs to see your name on the account. This is a real specific thing here. It’s better to use a screenshot of the full monthly statement.

HBH 138 | Terms And Definitions
Terms And Definitions: When you get ready to submit an offer, you always need to send a copy of your proof of funds if you want to up your chances.

 

A lot of times you just log in and go, “There it is.” It’s better to go to the full monthly statement and get the complete PDF of the statement that they would’ve sent you by snail mail back in the day, an official-looking document with your name. You have to include this proof of funds. Some people might tell you it’s not necessary, but again, not in my experience. It’s like submitting a resume for a job application on nice paper and it says, “Trust me, I went to a great school and I’ve had some great training and experience.”

Trust you? No. You need to show them that you not only can say that you have the cash, but that you have the cash for not only the earnest money but also for the full down payment and maybe even a little extra cash in case anything pops up with the appraisal or inspections or anything like that. You need to show them that you have the money to get into the deal and enough money that you’re not going to bail on the deal.

Our next P is called Property Taxes. Property taxes are a thing. You have to pay them. They are the T in PITI. It would be grossly irresponsible of me to give any tax advice since they are different in every single state and especially completely different in Canada. Get yourself a great unicorn team. Ask them. Don’t let people spook you into staying a renter for longer than you have to by giving you this mantra, “Renting’s awesome. We don’t pay taxes.” Sweet. Correct, but do the math of rent versus buy. That’s why we do the math of rent versus buy with the PITI number so that it is included in the equation.

We got the Purchase and Sale Agreement. This is the PSA. That’s not a Public Service Announcement, although it is, too. In real estate, a PSA is a purchase and sale agreement. It’s the contract. In California, we call it the RPA. That’s the Residential Purchase Agreement. For lots of other places, you might hear about the Purchase and Sale Agreement. Again, I love you folks in Canada, you guys call it the agreement for sale. Why can’t we all just agree on the same thing? Who knows?

Either way, any form of those words, I’ll call it the contract. Like a smelly, unemployed hipster leaving the porta potty at the music festival, I am all out of P. I hope this helped. If so, help the revolution spread the word. Take twelve seconds. Share this from your phone right now. Send it off to your friends that might be starting their plan so the revolution grows and we can get more renters to take control, and get stable in the scary economic world. Rate and review on Apple or Spotify. You can always look for more free information on my Instagram. It’s @DavidSidoni until I get the person at @HowToBuyAHome to release that handle. It is on TikTok @HowToBuyAHome and YouTube at How to Buy a Home Podcast.

For the past few years in this crazy market, before the show and through the show, I have been preaching the four P’s of buying in this nutso time, Patience, Persistence, Perseverance, and a Positive attitude. Let me add three more P’s as the market shifts in favor of your buyers, Potential, and Possibilities, when you have Proper Planning, you can do this.

 

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This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!

 

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I hope you are getting your questions answered about this crazy process. I know there’s not a lot of clear information out there on the internet, so that’s why I started this podcast. To demystify the whole thing and get you first timers the help you deserve!  Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out.  And if you’re not already a regular listener, please subscribe.  If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts. Let’s change the way the real estate industry treats you first time buyers one buyer at a time – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused.  Viva la Unicorn Revolution!

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