Podcast

Ep. 82 – Interview With VA First-Time Home Buyers – How They Bought In BANANAS 2022!

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Buying your first home is a scary venture. It takes a lot of time and planning. You have to do all your homework, look through all the houses, find a Realtor, make a list, save the money. As you can see, being a first-time home buyer can be exhausting. Listen to today’s episode as David Sidoni talks to real-life first-time home buyers, Kenneth and Danielle. Learn how they tried to buy on their own, but couldn’t make it happen. Then they found this podcast, reached out to David and got connected with a great unicorn Realtor in their area. Also, find out how they used a VA loan to get their first home – even in the bananas bidding war frenzied market of 2022.

Interview With VA First-Time Home Buyers – How They Bought In BANANAS 2022!

Tips And Tricks From A Real Life Story Of VA First-Time Home Buyers

This is one of my favorite episodes. This is a real-life story from real-life first-time home buyers. A couple who closed on their first home telling us and you how they did it. I can’t wait, so let’s get right into it.

I’m so excited. These are my favorite episodes. I messed up because they’re on the East Coast, and I went on the Zoom at the wrong time. They’re still gracious enough to come back for me. Ken and Danielle, say hi to everybody. Say hello to the world.

Hello.

They have a home, and there’s Zooming from two different places. I have to ask you, are you Zooming in two different rooms or is one of you got a job because you have to pay for a mortgage?

The latter. I’m a reservist with the Air Force. I’ve been flying back and forth between Maryland and Dayton, Ohio, where I do my duty.

Are you on your two weeks active because you’re a reservist or you’re going back?

That’s right.

Are you active now?

Yes, I did. I’ll travel back home to Maryland, where I will hopefully be for the rest of the year, because we found some great news where I’ll be working at one of the bases in Maryland. I’m looking forward to being home with my wife and my little daughter.

You folks are the crazy people. I’ll jump into that first. You’re the crazy people that bought a home with an infant. How did that go? Tell us about how do you see homes. How do you go look at homes when you have an infant? Did you do the one stays in the car thing? How’d you do it?

It worked out well where she was at school a lot of the day. We would go see homes with Kate during the workday, then we would pick her up. There was a couple of Saturdays where we went to some open houses and she came with us.

I’ve got to ask because you said it. You said eleven months, school?

I call it school because she does learn.

I wanted to make sure. I was like, “I know preschool doesn’t start until 3 or 4.”

No, I like to get in the habit of calling it school because she does learn there. It’s not only in the kids the over watching TV and kids are tearing up the house. No, she’s learning, so cool.

Ken, did you wrap the BabyBjörn when you’re looking at houses?

There are a few times when we took the car seat because if you can’t get through the door with the car seat, that’s a problem right there. We can’t move into it if we can’t get through the door to put the car seat.

When you’re looking at houses, you do a couple of bicep curls with the car seat. Tell everyone your story. When did this whole process start for you?

I’ll let you start with the timeline because I don’t remember the year. Go for it, love. If she lets me tell the story, I’ll embellish it. In her eyes, I’ll get it all wrong.

No, not all wrong. Initially, it started in late June of 2020. In the thick of the pandemic. We have a couple of friends who were looking at homes and have bought a new build. They were telling us about it and I’m like, “All right, let’s go take a look at it.” I went to take a look at it and we liked it, but the timeline was very quick like, “There’s only two more left. You got to get it before it’s gone.” We said, “Let’s give ourselves 30 days to see if this is what we’re going to do,” because we had not looked at buying a home before that time. We spend time doing all this research, watching YouTube videos of the VA Loan and that process and looking up home-buying courses. You name it. We were looking into it.

HBH 82 | First Time Home Buyer
First Time Home Buyer: Contracts are long. The amount of information you have to consume in a short period of time is huge. When you’re at the contract closeout phase, each day is a delay to your closing date.

 

I think it maybe was the second week in July. We were going to Ohio because he was on Air Force duty. I looked up a show about home buying and I saw your show. We listened to your podcast on the way to Ohio. We were like, “This is great information. We can do this.” Maybe a couple of weeks later, it was Kenneth who said, “This doesn’t feel right. It feels like a lot is happening very quickly.” We decided not to move forward with that new deal build. Fast forward to November 2021, little did I know that Kenneth here had been listening to your show for like a couple of weeks. We were also thinking about the next move for us the following year, whether we’re going to move into another apartment.

I had been looking up apartments and little did I know, Kenneth was listening to your show. He came to me one Saturday. I never forget. He was like, “Love, I think we should look at buying a home.” I’m like, “What? Buying a home? Where did this come from?” He’s like, “I’ve been listening to Dave and I feel confident that we can buy a home. I was listening to the Madison story.” I’m like, “She’s 24 years old and she bought a home. We can do this.” I’m like, “All right, let’s do it.” That’s when I reached back out to you, saying like, “We’re ready to buy. Send us a unicorn realtor,” and you hooked us up with Kate, who was a godsend. Unicorn realtor who hooked us up with a unicorn, a lender and here we are. We bought a home.

I could say thank you, end of the show. That’s it.

I would say that’s a great summary, love. You landed the plane there.

Which is not my typical.

I love Air Force analogies. Before we hit record here, Kenneth was saying that it’s the planning process. Maybe you could have done it in 2020, but it sounds to me like what got it going was when it’s not only all about me and my show, but that initiated the research beginning for you. What surprised you during the research? You obviously didn’t pull the trigger on the first one. Once you got into it and I am the official show of road trips. Every time anyone travels somewhere, they’re like, “We said we’re going to figure out how to buy a home on the way to Uncle Joe’s.”

No, and I’ll say it happened like that. We were driving into Ohio this time. Usually, I fly, but we decided we binge-listened the How to Buy a Home show and learned a lot. Danielle took notes on the way there. For me, I’m a program manager on the civilian side, so acquisitions are our thing. Trying to understand the process from the beginning of the process and its infancy all the way to the end, to the grave. In the beginning, it felt like we were getting a very good explanation of how things were going to progress from start to end. That’s one of the things that added to the ease that I had. Prior to that, Danielle had been laid off, so she had gotten rehired afterward.

I’m thinking about all these things and bank accounts, finance, is this going to be the best decision for us to make now? Not only Danielle and myself but for our little one who was getting ready to be brought into the world at that time. On top of that, it was a high-pressure sales technique that I didn’t appreciate either with, “We only have so many homes left and the price is going to continue to increase as long as you wait.” It’s like, “It’s not for us. You could keep it.”

We’re recording this in March of 2022 and it’s the hardest time for me to help people because I’m with you, but I am telling people, “I wish you’d started planning in 2021, but you didn’t. Here, I need you to plan. I need you to binge my show. I need you to read the newer episodes. I need you to get caught up in a week because the prices are going to go up.”

Now, for you folks, you were fortunate. Life happens. I’d love to have people buy a house when they’re super pregnant, but sometimes, that’s going to take priority. The first got you going and as you were moving through the process, then and you were learning about it. For other people out there who were military, tell us how the VA Loan affected your decision?

It made it super easy. Going back to the planning process you asked about initially. Since we had talked about it previously in the early 2000s, we had taken a look at our finances and tried to figure out, “If this is something we’re going to do, where are we going to pull the money at for a deposit on the home? How are we going to pay for closing costs and so forth?” We were already in that mindset. We were already putting money away. Thankfully, we both were working at that time. We were able to not only buy extra stuff at Bambino but also put money away in an account for this future purchase.

Although, we didn’t continue to look at homes. It was always in the back of our minds. It’s always something we thought about as far as needing a new place to go because I, my wife and our daughter were in a one-bedroom. It gets really interesting. I’m looking at the VA loan and understanding how it works with regards to not having to put anything down on loan was the icing on the cake for us.

It opened up the aperture for us to be able to buy a home that we maybe would not have been able to afford had we needed to put a down payment. For all the veterans out there, if you’re not thinking about the VA loan when you’re looking to buy a home, you need to be. If you’re not, you’re wrong. Get it together and figure it out.

I’m glad you said it because I was thinking about it big time. It’s the most incredible loan for someone like you. You folks are such a great success story. Number one, shout out with the Bambino. Thank you for the suck-up. My last name is Sidoni. I appreciate that. I was a Bambino forever. The VA loan offers you the possibility of not only an opportunity to have zero down, but you said a couple of great things there, Kenneth.

I want people to understand, but you did say for closing costs. What people also need to understand about a VA loan, there’s no PMI on a VA loan. It’s one of the great. The whole program is fantastic and there are great rates. Tell me about this because I know Danielle was so nice to talk about the unicorn team that helped you. I have people that are calling me now saying, “I keep getting beat by people with 20% down. There’s no way for me to get a house with 10% down or 5% down or 3% down.” You folks put zero down and got a house in the middle of this crazy market. How did how’d you pull that off?

For me, that was a slight concern. Especially as we got into the process of looking at homes and when we put in our first offer, we thought it was a strong offer. We offered over the list price and it came back that we beat out by someone else who basically waived everything and put down a down payment. I became a little discouraged because Kate, was real with us.

She said, “It’s hard having a VA loan because you can’t waive the appraisal.” The VA has to do the appraisal and that’s something that we couldn’t waive. I got a little down, but she was like, “No, it’s okay. You have to put an offer on your first house.” The second home we saw and we loved. It’s five minutes from where we used to live. It’s so funny.

When we saw it, we loved it. We put a very competitive offer in. I don’t know why but the owners accepted it. I can’t explain why we did it like a little bit of a note, but it was all blue, it’s beautiful. First-time homeowners with a little family, that was it. They chose us for whatever reason. It doesn’t matter. I’m very grateful.

You already praised the unicorn team you had. I’m sure that your offer was presented strong.

I meant to mention that our lender did call the realtor. I don’t know what he said, but he called them. I’m like, “That’s great. He called them.”

For all the veterans out there, if you're not thinking about a VA loan right now and you're looking to buy a home, you need to be. Click To Tweet

I’ll tell you what he said. “Those people clicked Rocket Mortgage and got a pre-approval. I’m a real person. I’m a real lender. I have seen their finances. I have looked at everything about him. She’s an amazing individual who lost a job during the pandemic, got pregnant and still got a job back. She’s very employable.” All those things.

The presentation of the offer speaks volumes and that’s incredible. Besides figuring out that you should plan and I applaud the people who go out and like, “Let’s go look at houses and see what happens,” were there any other things that surprised you about the process that you thought, “I never knew about this, or I never knew about that?”

One thing for me was how quick it was. It’s not the process of looking at homes. We looked at over 200 homes online. That was brutal. The process from putting in an offer to closing, I don’t know why I thought it for so long, but it took less than 30 days over the Christmas holiday. We were able to close on the home. Something else that surprised me was how long the contract was. The number of pages. I thought it was only the realtor calling and say, “We’ll put an offer and this is your math.” When she sent it to us, I’m like, “We’ve got to read all this in like an hour.”

It was the amount of information you have to consume in a short period of time because when you are in the contract closeout phase, each day is a delay to your closing date. You’re getting documents through email. You’re looking at those, signing them, sending them back to your lender, your realtor team, and pressing onto the next task. I think a list of things that was a surprise to me was the amount of information you had to look over and try and make sure you understood well enough before you put your name on it. That’s the big thing for me. Growing up, my folks were a huge proponent of telling me, “Don’t put your name on something you don’t understand.”

You got an offer accepted and you’ve got a whole bunch of DocuSign’s where they say, “Click the button.”

They’re looking at me like, “You’re going to read through every page?” Yes, I am. I might’ve been up until 2:00 AM, but I read through every page.

That brings up a great point, something that I think a lot of our audience can benefit from. When you’re working with a unicorn realtor, be prepared it’s going to go very fast. One of the great things you can do is, once you get going with a unicorn, you can ask them. I’m starting to do this more in 2022. Say, “Would you send me a blank contract?” On Wednesday night, when you’re looking through all the homes to look at, stop ten minutes earlier than you usually do and read two pages of the contract, then do it again on Thursday night and Friday, finish it up, and then Saturday, go out.

Probably the reason we’re not doing that as often now is because we know that you folks are going to write 3 or 4 or 5 offers if the market’s so competitive. That is a great tip for people. The other great tip that you guys mentioned and this is why I love doing these interviews like this because I do this every day. I give a speech to everybody. When we get in to say, “The next ten days are going to be, I call it the paperwork avalanche.” Once you get that offer accepted, it’s like, disclosures, then your lenders, like, “Give me all your tax forms. I need hair from your baby. I need to see every receipt you ever had.” Be ready for it.

It was almost like hazing.

It is and it’s so funny because, in this market, they act like, “You’re so lucky you got a house. Now, do all this.” They then throw all that stuff at you. How about the whole shopping process? Any tips for anybody out there who’s getting ready to get out there and do it? Now, you guys did it during the holiday season. Did you do driving around and looking at neighborhoods first? You said it’s five minutes, so you were very familiar. Any general tips for anyone who to help them when they’re out looking? Whether it was internet sites that you enjoyed or times a day to go and look at places. Any of that stuff.

I would say have a list of things that you do want. Danielle did a good job of putting together a spreadsheet that had a few things in that we talked about that we wanted in a home. It at least needed to have three bedrooms. It needed to have two bathrooms. Two of those bathrooms needed to be on the same level, the laundry room had to be on the same level as the bedrooms, all of these.

Did you get the laundry room on the bedroom level?

Yes.

That’s like gold in California. Are they all downstairs? My wife would pay a gazillion dollars. She keeps asking me to move it upstairs.

Put that out on the outside of the house.

On the flip side, what’d you give up? Was there anything you gave up and why?

We gave up a yard.

Why?

I’ll say why for me. I think Kenneth may have his own why. For me, the home is a townhome. The home had everything that was on our list, from the two-car garage to the laundry on the bedroom floor, to the number of bedrooms to having an office. Everything that was on our list was there. The neighborhood, we wanted it to be at least 20-25 minutes from where our daughter’s school is. That was on the list and it checked all the boxes except for a yard, but we have an in-unit, so that means a yard is right next to our house. It’s not only our yard, but it is close to our home.

Another great point. I will throw in my 2¢ as a person when my child turns one. Back in 2007, we were still in our townhome, but my wife had the forethought. She bought it before we got married. I sold my place and we moved over there. She bought one of the ones that had the green belt in the front yard. We had the one-year-old party on our “front yard,” but we did with our HOA dues, but that’s a great one. Checking all the boxes doesn’t necessarily mean checking all the boxes. It’s checking most of the boxes.

HBH 82 | First Time Home Buyer
First Time Home Buyer: You don’t need everything to be perfect at first, but you need the bathrooms and the kitchen to be livable, especially if you have a child.

 

The important box.

Maybe one of the biggest things that I want to add when talking about that list is to be realistic with yourself. I can’t recall how many times Danielle asked me am I sure that I wanted X, Y and Z. I work in Downtown DC. For me, it’s pretty important to be able to jump on the Metro and head down to work so that I don’t have to sit in traffic. Being near a Metro where we’re within walking distance is most ideal. I know we were looking at some places that were about 10 to 15 minutes away from Metro driving-wise. You can double that if you’re talking about walking. I would say be realistic with yourself when creating that list.

It doesn’t need to be your dream sheet but at least understand at a minimum what it is that you want in a home. As far as things that we gave up, I would say appliances were things that I let go of. One of the no-nos that we did in our negotiation process was a home inspection. We took a calculated risk on that because the home was built in 2005.

My thought process and talking with Kate, our realtor as well, it’s like, “The home’s been around for many years and there could be some issues. Things are probably going to begin to break. Water heaters, furnaces are probably at the end of their life but let’s put an offer in, going into the door knowing those things. We can handle those on the backend if they begin to fail or something of that nature.” That was one of the things that made our offer strong, as well as utilizing the price escalation.

Did you do the escalation process?

Yes, because I didn’t like that we lost the first time.

He’s very competitive.

An escalation clause, for those of you out there reading, is when you put in an offer and you know it’s going to be a multiple offer situation. You say, “We will match or beat another offer or let us know what the other offers are and we’ll maybe go up to $1,000 or $2,000 more.” As opposed to saying, “Here’s our first offer and they say, ‘Here’s a multiple counter offer,’ they call it.” Instead of you saying, “We’re going to offer $10,000 more.”

You say, “We’re going to offer $10,000 more.” Some of them might be structured like you would say, “We’re going to offer $10,000 more and we’ll offer up to $5,000 more the next offer up to $600,” or whatever. You can cap I, or you can say, “I don’t care what it is. Whatever the next offer is, we’re going to go.” I’m sure you folks had to be wary and make sure that you still have your appraisal as part of it.

We weren’t in the business of writing a blank check, David.

You can’t because you happen to get an appraisal.

I would say that was probably the biggest thing, for me, was the appliances. We have a downdraft and cooktop. Those were things where it needed to be replaced, as well as the dishwasher. We were able to ascertain that during a walkthrough at home, though. We went into it knowing that we were going to have to buy those things.

I know it’s silly. Sometimes I think, “I don’t have to tell them this, do I?” When we’re talking about a brand-new home, when you’re talking about the commute, all I’m thinking is not stuck in traffic. I’m thinking about half an hour a day or an hour a day away from the little one. However much those appliances cost for you for seven hours a week, five hours a week, I would have bought a $25,000 appliance back is to have that time with my infant.

Can I comment on the appraisal part?

Yes, please because everyone wants to know about this.

The VA did their appraisal. They appraise the home for $25,000 more than what we put our offer in on. We were so excited that one, we didn’t have to pay the appraisal difference if there was any. Two, we have a home that has equity in it going into it.

That is called instant equity. If you had $25,000 on the day you closed, there you go. Happy house warming gift. There are your appliances, by the way, Kenneth.

There are some other things I want to do to the kitchen as well. We said that we would give it a year, though.

Here’s the great thing. You have $25,000 worth of equity. Now, you’ve probably made another $25,000 easy. When you get to the point later on, as you own the home, you can figure out once you get to a certain point where you can do a home equity line of credit and fix up the house. The nice thing about having no money down too, is you secured a home with a low down payment. Any extra savings that you have. I’m assuming you didn’t break the bank and use everything one when your closing costs. You still have some money left, right?

Yes.

When you're looking for a home, make sure you have a list of the things that you do want. Click To Tweet

You had to buy those appliances. Who’s the cook? Does that mean you’re the cook, Kenneth?

We both cook. Danielle, more so than me. I’m more of a rice and meat person. Danielle likes a lot more of a variety.

The kitchen works for both of you folks to do what you need to do?

It does. We have an island. It has a cooktop in it and we’re not used to that setup. We’re used to having an island where you can do everything on it. We’re figuring out how to maneuver in that type of kitchen. He’s not thrilled about it.

No, I’m going to change it.

If you have any wall space anywhere in the kitchen dining area, there are rolling countertops and you can get one that’s a butcher block. You’re rolling one in the corner and it sits over there. When you’re cooking, you bring it over next to the stove and you do all your chopping on the butcher block. I’m telling you’ll love it. For people who have islands, I recommend it all the time. It rolls and the bottom of it is awesome, a lot of people like the wine rack on the bottom.

I liked the one that has a pot hanger because then you get all that counterspace. You take all the pots out. You hang the pots underneath it because my Italian grandma hung them up on the top of the kitchen area. You hang the pots down there. Now you have more space underneath and you roll that over, so you can do all your chopping. It’s a great little thing for the kitchen.

You’re speaking my language, utility.

Trust me. You get one of those. I’ll probably call you and have you video all the things that you do to it because you’ll find sixteen other ways to hang stuff and get stuff in there. I know everyone wants to know because a lot of people are asking. Talk to me about, was part of the scary document stuff, the HOAs documents that came during that avalanche of paperwork? People always freak out about HOA documents because they’re so thick.

The HOA document we got was 44 pages long. A lot of it was legal jargon that I had to get online to decipher and figure out what it meant. After reading it, I felt a lot more confident about buying the home and understanding what we will be getting ourselves into. There are a couple of odd things that I saw in there, but there wasn’t anything that I felt was super egregious that I needed to push back on.

I tell people all the time to look through it. Most of the time, people say, “It was an instinct and I wanted to see where I could park.” That’s the main thing they’re looking for. Once you get through that, you understand that’s going to be part of your process. I’m pretty harsh on the show about waiving inspection. That’s because I have a lot of people who are buying older homes, a terrible home under twenty years.

If you’ve never bought a home before and you’re reading this, first of all, good for you. According to Kenneth and Danielle, you’re planning, so good job. Understand that with the townhome, anytime you’ve got HOA fees, the main reason you have insurance on a piece of property that you own is in case of a fire. In case of the roof and of the foundation, all that is covered by the HOA. The big stuff you’re looking for on the inspection and I know I keep joking about it, but it’s the appliances, Kenneth.

I know I can replace that, but for the big things, you don’t have to worry about them inspecting the foundation because the foundation is covered by the HOA. You don’t have to worry about them inspecting the roof. Anything that is attached to the other properties in your unit that’s going to be covered by the HOA.

I’m not saying it’s going to be super fun if it happens because everybody on your little block is going to be getting something fixed, but it’s not super fun when your own house has the problem. It’s one last thing you have to worry about on the inspection. I know you guys were in good hands. If you go into it, eyes wide open. That can still be a good position for you.

That is one thing that I want to give a shout out to Kate Herzig, eXp Realty. As we went through looking at multiple homes, she kept it real with us and gave us a better idea of what it would be for us being moved into a new home. I think there was one we were looking at, and she mentioned to us that it was another townhome, and the master bedroom didn’t have a door to it. She was saying, “Think about when your daughter gets of age to come knock on your door. There is no door. She’s coming right in.”

It’s fine now because she can’t get out of that sleeper, but she’ll be able to soon.

There were things like that we weren’t thinking of. We were bedazzled by the idea of moving into our own home and maybe the nice walls and nice appliances, things of that nature. She did help us think through the utility of the home that we were going to be buying it. That was something that I appreciated.

She appealed to your utility. I know she did it because she’s a good unicorn realtor, but it’s amazing what you attract to the utility of it. Danielle, were you going into it thinking, “I’m okay with the fixer,” or did you want your little HGTV home right away?

I was in between. Kenneth and I had this conversation. I said, “To buy a home, the kitchen needs to be done and the bathrooms need to be mostly done.” Especially with having a young child, I do not want to be in a kitchen where I can’t cook or we can’t cook. I didn’t need everything to be perfect, but I needed those two things, the bathrooms and the kitchen, to be livable. Other things, we could figure it out.

When he came to you and said that he’d secretly been listening to my show, which is creepy and flattering all at the same time, did you guys have those discussions then or did you have them with Kate?

HBH 82 | First Time Home Buyer
First Time Home Buyer: Know your numbers. Understand what it is that you are willing to sacrifice when you go to the table and negotiate. If you can pack those things into your contract, the seller might accept them more easily.

 

We had them before we met with Kate. It was an ongoing thing because I also told him that I preferred not to look at homes between the 1950s and older. As we were looking at more homes and saw what was available, we had those conversations about what we would be willing to do. I can’t remember what the site is called, but it’s the site where all the homes are listed.

MLS.

Yes. Zillow and Redfin are for the public. The MLS are the realtor ones. It’s a Multiple Listing Service.

That was wonderful in helping us to have those real conversations about what we would be willing to buy because before we looked at that, it was like, “We think we want this, that.” Once we started looking at homes, we had these discussions on, “This is what this home offers. Could it work?” Sometimes mom was like, “No, let’s delete it and move on to the next.” It was ongoing, I would say.

One thing we haven’t talked about a lot during our conversation are the numbers, but I want to make sure I mentioned that because that is an important part as well, know your numbers. Be able to go into the conversation knowing those and understanding what it is that you are willing to sacrifice when you go to the table and negotiate. If you can pack those things into your contract when your realtor submits your offer, it gives you that much more of a better chance to have a contract that the seller rather is going to be willing to accept. The biggest piece for us was the monthly cost. Even though we started out low, we are in the DMV. The DC, Maryland, Virginia area.

We started out thinking we might want something for about $450,000 and that’s still a lot of money for the both of us. At the end of the day, realize we could probably be somewhere between $450,000 and $650,000 and be able to live comfortably. We ended up buying somewhere in the middle there. Knowing your numbers and understanding where you can move money to accommodate your monthly payments is going to be crucial prior to going in and looking at any homework or writing any offer.

Know your numbers but know where you can move money around.

Know where you can move money around on a monthly basis because although it is a marathon, you have to be able to sprint throughout the month to get to the end of the pace. Know where you are going and know what you can move.

If your lender’s got you set up, then you no longer are looking at the price in the price tag. You already know, “At $450,000, we pay this a month. At $500,000, we pay this a month. At $525,000, we pay this a month. At $575,000, we can still make it like our $550,000 payment or $525,000 payment, but that means we’re going to have to take a little bit out of savings and up to down payment or whatever it is.”

If you know all those numbers ahead of time, it’s less of a shock to your system. When you find that one home that you want to stretch for, instead of going, “We only wanted to pay $550, that home is $600.” You’re looking at it going well, “I didn’t want to take all my savings out, but for that house, I’ll take most of my savings out.” It changes your perspective. That’s awesome. It sounds to me like planning was the key for you folks.

Outside the low-key listening to your show without my wife.

On the DL?

Yes, and here I thought he was listening to some other podcast.

You thought he was listening to some true-crime stuff with nothing that was educational. I tell people all the time, “You can go to college with podcasts. If you got a commute, you could get a four-year.” I’ve studied so much and it’s been so fun. When I’m tired, I throw on my comedy podcasts. There’s so much that you can learn. You folks being able to work together, they’re huge pieces here. Know your numbers. Check the boxes but don’t worry about checking all of them.

The commute is huge. I’m getting so many people now that are telling me that they’re thinking about going way out because why not? For you, the choice was, “My job is here and we’re going to have a place that we enjoy. We’re probably not going to be here forever, but that commute time is important.”

That’s an important piece you have to figure out. I think a lot of times, people forget that. I can tell people, “When you’re looking on Zillow and Redfin, make sure you learn how to use those map buttons. Take it and put it in Google Maps and see how long it takes to get to your office.” It doesn’t look that big when it’s on your laptop screen or on your phone screen, but then you punch it in, you’re like, “48 minutes.” It changes everything.

We did that.

It changes your perspective.

It made you folks go ahead and get something that maybe you hadn’t thought about at the beginning. Did the end unit affect you because I always think that’s a cool thing?

The fact that it wasn’t in-unit? I was happy about that because you got extra windows. I love natural light. I think we get four extra windows. It’s such a game-changer.

When looking for a home, it's not about checking every box on your list. It's about checking the important boxes. Click To Tweet

What’s great there, you’re going to be shopping with a partner. If you’re not watching it online, Kenneth was like, “Whatever.” She was like, “Windows.”

What we found out after we bought the home is we need to put some curtains over those windows, so it’s not super cold at all.

The window covering is a must. I’m wrapping things up here since you folks have been there for a couple of months. The big question I have for you is, are you all unpacked?

What do you think is the answer to the question is?

Can you tell me you’re not getting dishes out of boxes, are you?

Maximum utility.

Most of the dishes are out, not all, but most. We’re not going into boxes and getting anything. Everything that we need is out. Do you know the motivation for getting the dishes out? We ran out of paper plates and didn’t want to buy them.

What happened was your first few weeks there because you don’t have a mortgage payment sometimes for 30 or 45 days. You were like, “Give me those paper plates.” The first mortgage payment came and you went, “Get those dishes.” What’s the difference between your rent and your mortgage? You’re never leasing again.

I think it’s about $1,200 or is it less?

It’s about $1,000 if you include parking.

You folks were prepped for that once the process got going?

Yes.

You’re comfortable and happy in knowing that you had the stretch before you got in there and now you realize you’re going to be there for a long time?

We were satisfied. I know we talked about being in the DMV area and how long we want to live there. We feel good about where we bought it and know that the next person who may be looking at our home will see that it’s near Metro. Location matters. That’ll also help us with our selling process.

Not a lot of people have the luxury of being 1,000,000 % certain that 7, 10, 12 years from now, the biggest business in town is still going to be there. Amazon might up and leave maybe in Detroit but then look what happened to them. I’m pretty sure the DMV is always going to be. You’ve got a nice townhome there. You’re going to be able to sell that to somebody, for sure.

The Department of Defense, Department of Homeland, none of those places are going anywhere anytime.

No, they’re not. Any last pieces of advice for anyone out there because it’s so exciting to know that you folks during the pandemic started thinking about this. Now, here you are when everyone was talking about how crazy the market was and you’re a zero-down buyer. Any pieces of advice for anyone out there who’s thinking about starting this process?

Plan. The reason I’m saying the plan is I’m thinking of a couple of people that were saying, “I’m thinking about buying a home, but I need to continue to save some. I’m not going to talk to a realtor or a lender now. I’m going to keep focusing on these key things.” The fact of the matter is getting a unicorn team to help you walk through the process, and the lender can tell you where do you need to improve in is so monumental.

Even though we didn’t need a lot of guidance or mostly guidance, we had great credit and things were in line for us, so we didn’t need all of that guidance that they could have provided, but we knew if we did need it, he was there. He had a spreadsheet in that he put the numbers in. You could tell he was very prepared and that made us feel good. If we did need to come to him for whatever advice, he would be there and willing to work with us. Planning with you or your partner or whomever then planning with your unicorn team is crucial.

That’s a big thing that I want a lot of the audience to understand because there are a lot of people that are reading and never even thought about it and they’re at the beginning phases. If you can have a guide, you’re going to get there so much faster. A good guy doesn’t care if it’s going to take 2 or 3 years. If you’re on the other end of the spectrum like you, it’s like taking a professional athlete and bringing in a guru. Suddenly, you’re almost there and give me a couple of little tricks and boom. Now, you’re a Hall of Famer like that. That’s what that team was able to do for you to be like, “Good. Smart people. Come on here. You did good with your credit and money. Now let’s do this, that and we’ll get you something even with the VA loan.” That’s incredible.

HBH 82 | First Time Home Buyer
First Time Home Buyer: When buying a home, you need to plan. Get a unicorn team to help you walk through the process and the lender can tell you where you need to improve. All of that is so monumental.

 

I would say a plan, know your numbers, ask questions. Don’t be afraid to ask them until you understand. If your team isn’t willing to sit there and explain it to you in several ways until this is crystal clear to you, they’re probably not the team for you. I’d say show yourself some grace because it is a lengthy process. As far as looking through homes and finding, but when you bid on something that you want and don’t get it. That’s all right. Best yourself off and move to the next one.

Grace, mercy and forgiveness in this market. I always tell my clients, “Never be insulted. You folks are wonderful people. I am going to talk to you like you’re in kindergarten. I’m going to say things five times.” Anytime you want, put your hand up and go, “Sidoni, I’m good.” That clarification is so important. It’s so key. It’s never too early to start planning. Don’t call me if you’re sixteen. If you’re somewhere and you’re paying rent, start thinking about it. I do have an eighteen-year old that called me. I love that dude. He’s like, “I’m in college. When I get out, how long when I have my job before they give me a loan?” You go, buddy. I love it.

Madison in the making.

I know. I talked to her. She’s doing great.

Join the unicorn bubble.

This is so awesome and so amazing. Everyone out there, Kenneth and Danielle, have helped you to understand the big P-word, plan, everybody.

It is truly important. It will save you from so many headaches on the back.

Thanks, folks. Enjoy your house.

Thank you, Dave.

If you had any doubts about buying your first home, these guys did it and they had a little Bambino in tow while they did that. Pretty exciting. If they shop for a home like that, having to carry a little baby around, you can do this too. I’m glad there were so many tips and tricks in there, so many great things for you folks, but I want to make sure you understood and you heard the main theme. Did you hear the theme? Plan.

That was the main theme. It’s the number one most valuable piece of advice for anyone that ever wants to buy a home. The end, discussion over. Do you want to know where to start to buy your first home? Plan. Do you want to know when you should start your plan? Yesterday. How do you find the right plan for you? How about 80 episodes of content right there on your phone? It’s right there. All you got to do is figure out what phase you’re in.

You find a unicorn of yourself or you asked me to share one with you. You meet your realtor, a lender and you get your action steps. No matter how small and you start that plan. Kenneth and Danielle are smart, good people with good jobs and good finances. When they tried to look at new build homes and do this on their own, it all came at them too fast.

They felt too pressured and unsure. The cure for the unsure a plan. Are you sensing my theme now? It started with Kenneth making my show his dirty little secret. I love you, Kenneth but how long did you have to listen before you realized that maybe you should start getting your partner involved? Get her on board and listen to the planning? Only a thought.

As I record this now, it’s the middle of March 2022. I’m not sure if you’re watching the news, but things going are little nuts now. We have a stock market and turbulence. We’ve got global uncertainty. We’ve got a housing market that truly defies all logic. In an upside-down world, I want to share something with you that is super important. This has got to be like one of my main themes. It’s huge. I should print this out and put this on the wall behind me. The statement alone could save you hundreds of thousands of dollars, especially when we’re talking over your lifetime. I’m telling you this is the most important thing ever.

I’m not selling you anything. I’m telling you this because this concept turns your largest monthly monetary output into a wealth-growing fund because you’re already going to pay for shelter and you would eventually want to buy a home someday. If that’s where you’re at, here it is. Everyone always asks me, “What’s the top tip? What’s the number one thing you would tell a first-time buyer?” Here it is. No matter what’s going on in the world, the number one greatest way to take advantage of the global uncertainty is not to wait it out by doing nothing.

Buying now is not your only course of action. I’m not saying you have to run out and buy now because things are uncertain. Who knows? Planning during this time period while everyone else is panicking and burying their head in the sand, planning now will set you up for the most advantageous results later on. No matter what happens. Start your planning now and you’re going to be in a better position. No matter what’s going on with the world, the housing market, the stock market, if you start now, you’re going to be in a position to do so much more in whatever you want down the line.

I know what you’re thinking, “Thanks a lot for that information. I’m going to keep saving and reducing my debt and doing all those things that you told me to do.” Yes, that’s a good plan, but do you know what a better plan is? Find a protein that’s willing to work with you now, even though you’re not going to be a paycheck anytime soon, even though you have no idea when you want to be a paycheck even though you have no idea what you’re doing in this turbulent world. When things get crazy, that’s time for you to make a plan.

Whenever you do this, whether it’s by necessity or by your own choice to wait, you’ll have more options later on. It’s going to be guided by a professional team that whenever you’re ready, they’re going to be there for you. Buying now is not your only course of action. Planning is going to get you in a better position to take advantage. Whether things slow down, drop or keep going up. Planning means you’re in the driver’s seat. Many people think sitting around and waiting for prices to drop or for rates to change or for the uncertainty to settle down is taking action by non-action. I get that. That makes sense.

You think, “Things are nuts now. I’m not going to jump into this.” You decide to wait it out. I get it. It’s like figuring out in November that you want a new mattress. You’re going to wait to buy the new mattress that you want when the big sales hit in February. That’s a great plan, but here’s a big difference. You know how to buy a mattress. I’m not sure you know everything there is to know about how to buy a home.

I’m sixteen years into this and I got to tell you the truth. There’s a lot of stuff going on in 2022 that I don’t even understand how to work it. I’m figuring out how to work it. My expertise is helping me get to the solutions faster, but this is not buying a mattress. You know how to save money and where to save it. It’s a plan because you know how to buy a mattress. You know how much you should save and where to save it and how to save it. Buying a home has so many more variables in that. Other factors that take time for you to adjust, tweak and set yourself up perfectly. You can’t do anything and suddenly decide to go out and look at houses.

Know your numbers, but know where you can move money around. Click To Tweet

Remember the story of my fun friends, Kenneth and Danielle. They did that. They were saving up doing good jobs, good lives. Suddenly, they went out and looked at homes and how did they feel? Pressured, unsure, scared, confused and darn uncomfortable. Now the cool thing is, let’s fast forward to talking about when they had their plan together.

Did you hear Danielle squeal a few times in that interview, squealing with delight, laughing hysterically? Did you hear Mr. Utility? Feel so much more comfortable when he understood the process, and he understood all the options and the ability to manipulate the things that were in front of him? That’s his jam. Mr. Utility likes that lot. “Let me tweak this and make it right.”

For them, they landed the plane, as he said. I love that Air Force analogy. They got to use a VA loan to maximize their purchase. They leaned in their unicorn team and with a few compromises, like the commute over the appliances. Sorry about that, Kenneth. Trust me. You’ll thank me when you’re on the beltway or the driveway or whatever you call it over there.

It’s going to be a shorter commute, so it’s going to be a better decision in the long run. That’s a great quick little compromise. Now they’re in a home that has a fixed payment that will not go up like the rents are. By the way, I read an article, 60 minutes had something come out 15%. I know inflation is going nuts. It’s at 7% or 8%, but I don’t think inflation is at 15% as of now.

A house is a great hedge against that terrible inflation. These guys are in their house, giggling, laughing, and utilitizing. Another word I made up for all of you How To Buy A Homies and have a good time. One of the things I’m going to tell you about this episode. Go ahead, re-read it again. If you don’t think you can do this if you think that a small, low down payment is something that can’t get you in to get a house.

If you think, “This is never going to work for me.” I’m not sure it’s going to work for everybody, but I know that most of you, you’re out there and you’re renting at the average rent in your area. You can probably afford with the right guidance to figure out how to purchase a home. Re-read this episode again. Get those real-life affirmation tips.

I’ve been trying to tell you for a while but let’s go over some of the ones that were enticing in this show. Let me start with the purely narcissistic one that the show is the greatest listening and learning tool for road trips ever invented. Maybe I’m blowing that up a little bit. As long as you’re not driving in a boring stretch of road, I don’t want you to crash, listening to me crunch numbers for you. The show is a great way to learn.

I heard a great thing once that if you spend enough time, there are a bunch of sales guys that were talking about this when books were on tape. Books on tape are called cassettes. You used to put them inside your car. They would play music and stuff by listening to books on tape or books on CD or books on your playlist. Now that we’re in the 21st century, you can get the equivalent of a BA or a Master’s Degree by studying in your car and listening and getting yourself educated. Knowledge is power.

One of the other things that they mentioned take notes. I’ve told you folks before you can download the transcripts from HowToBuyAHome.com. You can save them electronically or save them and print them out and use paper. Don’t do that. Save the world, kids. One other thing they talked about is VA loans rock. Get a unicorn because you have killer options with a VA loan if you’re eligible. Another thing, unicorns rule. Kate crossed it for them and she hooked them up with a unicorn lender. That lender called when the offer was put in and made them stand out in this competitive market, which I know appeals to Kenneth and his competitive nature.

Another thing, once you get an offer accepted, be ready. This is me preparing you. Be ready for absolute mayhem. It’s an avalanche of paperwork. Kenneth compared it to hazing and he was in the military. He knows what he’s talking about. Another good point is that contracts are long and detailed. Always a good idea to ask your unicorn realtor ahead of time, “Can you send me a contract before suddenly we go look at a home and we have to write an offer in the next fifteen seconds?” Take a look at the contract as much as you’re taking a look at Zillow. It’ll help you.

The point that I’ve been telling you guys for a while, compromise happens. Buying a home is a process of elimination from the inventory available. It’s not a custom build that you dream up in your head. Remember, there’s going to be some compromises. The more you talk about it, the more you think about it. The more you get that going on in your head, the easier it is for you to decide when something comes up as a compromise versus a financial decision versus an emotional decision. You can’t versus three things, but I did.

One of the final points that they talked about. Be ready to get creative with your offer in this competitive market. Know your numbers, Kenneth said because he knew his numbers. He knew how to be able to move things around to make them look better to the seller. Use all the hacks that they were talking about. There are a ton of hacks I’ve mentioned to you for bidding wars. You’ve got escalation clauses, appraisal gap coverage, and a free rent back. One of my favorites is offering to pay the seller’s closing costs. It’s something that can make you look good. They did it and you can do it too.

If you can’t, or you don’t feel comfortable doing it now, I understand. Some people aren’t in a position, don’t have the means. Some people are wanting to sit and wait it out. That’s cool, but your best plan is to start a plan. Start that plan with the pro team as soon as possible. If you want to take advantage of something in the future, line yourself up now with educated and guided planning. Now, this is something that sounds like an old man telling you, “You should do this.” When you’re in a competitive market like this, I can tell you having those little extras, whether it’s a little extra cash or extra ideas or extra creative things with your loan. That’s going to go miles as far as you being able to be competitive.

If you’re looking for other ideas, you can get tons of ideas from my Instagram feed with dozens of how-to videos. That’s at DavidSidoni.com. The How To Buy A Home website has great free information. Check it out on HowToBuyAHome.com. There’s also the YouTube page. The YouTube page is getting going real big now and I’m excited about it. Jump on.

You can stream your YouTube like my kids do when they’re brushing their teeth or doing the dishes or walking the dog. Get on the YouTube page How to Buy a Home and last, TikTok. I’m all over TikTok. I got crazy in it now. Where is my audience? Where are you, folks? Follow me on TikTok. Hit me up at @HowToBuyAHome on TikTok.

There’s tons of free content. I answer questions. I do stupid trends and you might even be able to see this old man dance. All this stuff is free. If it’s helping you with your plan, please leave a review on Apple and Spotify has got reviews now, too. That’s a great place. It would help us to get the word out so we can get more stories like the story you read. There’s a reason I give all this stuff away for free because people like Kenneth and Danielle deserve it. They deserve to feel better than they did when they tried to do this on their own in 2022. When they tried to lose with no plan, they failed. They plan, they succeed. Simple as that.

You might be confused now, but by educating yourself, getting yourself a guide sooner than you think you probably need one. You’re going to find out that guy is going to be willing to help you in from the beginning steps of your plans. They’re going to give you action plan steps to help avoid the horror stories that you might’ve heard about. You, too, can be giggling in delight like these two buyers. You can do this.

 

Important Links

 

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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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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