Podcast

Ep. 33 – How These Planners Bought Their First Home And Learned Their Plan Wasn’t Enough! – Real Story #3

HBH 33 | Home Buying Plan

Buying a house is a lot easier said than done, even for those who seem to get it all together. In this episode, the How to Buy a Home Guy, David Sidoni, interviews two first-time homebuyers, Alvin and Ashley, to share their actual experience and some first-time buyer nuggets of wisdom. These two young adults from the hoods of LA got their stuff together, made a plan, and bought a $700,000 house. How did they do it? Not without their share of struggles. Thinking they were doing everything right, Alvin and Ashley realized there are way more to tackle than they knew. It wasn’t difficult to DO, it’s just not easy to navigate without a guide. Buying a home takes some planning. Listen to this episode to learn what to expect in the actual process of buying a home.

How These Planners Bought Their First Home And Learned Their Plan Wasn’t Enough! – Real Story #3

Listen To What Alvin And Ashley Learned About Buying Their First Home – How Two Super Organized People, Still Had No Clue How Much Planning You Need.

How does a young, hip couple starting out in life consisting of a girl from South Central Los Angeles and a dude from Snoop Dogg’s hometown of the LBC. How do they afford a $700,000 home in LA County? It happened and you can learn from their journey. Here is their real-world story.

This is your inspirational story that’s going to make all those lifetime Hallmark movies look like schlock. This is such an inspirational story. It’s real and it’s chock-full of incredible nuggets of first-time buyer wisdom. There’s so much powerful information. You are going to learn so much from this interview. These guys are amazing individuals. It comes straight from the horse’s mouth and this story is totally real. The cool thing is I was the realtor on this one. Those of you who don’t know, I’m a realtor with eXp Realty here in Southern California. My team and I had been helping people buy and sell houses since 2006, a little over thirteen years or something. In early 2019, I got disgusted with the way that first-time home buyers are being ignored, mistreated and probably the most trodden upon consumers in American consuming. It is not fair. I thought that you guys are being ignored and mistreated by most of the industry sucked.

Rather than quit the business altogether, I created this passion project. It’s out there to correct all the injustices of the world. I’m watching a lot of Marvel so everything’s about injustice. I want to inform you that you have the power. You’ve got an infinity stone right in your hand and you don’t even know it. Here we are and this is a real-life story of two regular people who turned into real life superheroes. If you’re new to the show, some of this gets pretty detailed and intense on the whole home buying process. There might be a lot of words and subject matter that don’t make a lot of sense to you. Don’t worry, read up, hear this great story, grab whatever nugget that you can and then subscribe. You can go back and read some of the beginning episodes that we’ve got. You will not be sorry.

As we’re sitting here, we’ve had two local Southern Californian followers that have closed on their first home, ten all over the country that got their first house, two more in escrow which are closing soon and over 60 people all across this great land from Hawaii to New York City. They never thought that they could be working a plan and they are on their way to homeownership. How are they doing it? It turns out that a good realtor is hard to find. It’s not quite as easy as everyone thinks it is.

In fact, a realtor who’s a real pro, someone that is going to help you in the planning of the process well before you’re ready to buy, they’re often elusive and difficult to find. They’re magical, mystical and rare. They’re like a unicorn. We call them unicorn realtors. The great news is a unicorn realtor is free to you. It costs you exactly the same as any other agent that you hire because whoever you hire, you don’t pay for them, the seller does. That’s a buyer’s secret. I decided to start this show to help you not only walk the steps of buying a home, but also give you the guide on how to even get started. Planning is beautiful. It’s going to save you tons of money in the long run. Two weeks or two years away from thinking you can do this, 3, 4, 5 years, it doesn’t matter. You’re here and you’re reading. It’s all good.

You’re about to learn from Alvin and Ashley so much about how to prepare as they did. If you’re getting closer to this and you’re reading the blog, you’re going to learn what to expect in the actual process of buying the home, going through the escrow and pulling the trigger. These guys have so much great information. Do you want to hear how they did it? Read up. There are tons of first-time buyer nuggets of wisdom in this interview. There are lots of incredible and useful information. Whether you think you know it all or you have no clue on how to plan for this and therefore you definitely have no clue what to expect when you’re getting ready to buy. No matter where you are in your journey, you’re going to learn so much from their story. Alvin and Ashley, take it away.

This is Alvin and Ashley. Say hi to the world. 

Hey, world.

As many of you out there know, I’ve been doing this for a few months. Alvin and Ashley found me on the show, we hooked up and they closed on their dream house. First of all, tell me how you feel. 

It still feels unreal because we haven’t got the keys yet. Once we do, that’s when it’s going to hit and I think I’m going to cry.

I feel the excitement every time I’m at work or working out or doing something. I look around and I realize this great and amazing thing that we’ve accomplished and no one around me knows.

It brings up something interesting and we’ll get into the whole story. I wanted to say hi and introduce everyone to you, guys. You did bring up something interesting that I wanted to help explain to people. When you buy a house, there are a million things that you think go a certain way and they don’t. For instance, you owned the house for almost 24 hours but you don’t get the keys for a week, right? 

Yup and that is a killer feeling.

It goes into the contract of the agreement or the counter that we agreed to with the sellers. That was something that we learned not the hard way because it’s still worked out so quickly. It’s something that people don’t tell you that there are many little nuances or things that could shift. You have it but you don’t get the keys right away or something like this. Maybe you get the keys and something else comes up and you still can’t quite get in.

That’s exactly why I brought it up and what I wanted to talk with you to the rest of the world. In our time working together, I figured out that you are smart. Ashley, you articulated a point that I’ve been attempting to say on the show before but it helps for people to hear real life stories. You’re not buying a car. You don’t walk into the dealership and say, “I don’t want that color. I don’t want that seat thing and I don’t want that extra piece.” You don’t get to go in and say, “I want 1, 2, 3 and 4 and I’ll pay this much,” and that’s it. You’re dealing with one person and you found out we got the home at the price that worked, but the home has got these giant fast and furious car things in the garage. It’s a two-car garage.

It’s like a mechanic shop in that garage.

He needed some time to move out and you guys said, “If this price works, we’ll give you some time after close of escrow.” That’s something that everyone needs to understand is not every piece runs exactly as you think it is going to. 

Not every encounter is like a cache thing. It’s not necessarily, “We wanted at this price,” and you say “I want to pay $5,000 less,” or whatever. It’s not exactly as everyone made us think it was.

Sometimes it’s time, sometimes it’s materials in the house.

They wanted the water softener and the bidet out of the master bathroom. It’s random as hell. It could have been up to us to say, “If you want this extra time, shave off this much off the asking price.” That could have been the thing that broke the deal for them.

That’s going to be my new T-shirt with my podcast logo, “It’s random as hell.” I wish more people understood that going into it. This is why we do this to help people understand. You’re talking about it’s always time and money and Alvin, you helped me change my show again. It’s time, money and materials. It’s random things. Here we are, you closed on almost $700,000 house and we’re talking about how at one point we were arguing about a bidet or not arguing. 

For some people, that could have been the thing that they loved the most about the house. This couple is like, “We’ll give you everything else but we want our bidet.” That could break the deal for some people or caused the price to go up.

That’s what I’m saying. It’s always time and money but there are emotions. I’ve seen people move stuff away because you dished their fancy bidet or the mural that they’ve painted. Let’s go back and start at the beginning. Tell us about you, guys. Tell the world your story. Where did you come from and how are you here buying a house that is almost $750,000? 

My name is Alvin. I’m from North Long Beach, California. I was born and raised in Southern California. I’m a QA engineer. I work with software, 40 hours a week. That’s my 9:00 to 5:00. My freelance job is I’m a DJ and producer. I dabbled a little bit in movies, pictures and photography.

When buying a home, not every encounter is like a cache thing. Click To Tweet

He’s an excellent editor. He’s creative as hell all around.

Which is why this house is perfect for us because there is a creative space solely for me that will hopefully turn into a business. That’s who I am.

That’s cool, Alvin, because this is something that a lot of people out there don’t realize. You guys bought what we call a work-live space. It was a very unique situation. I’m glad that you found me. A lot of newer agents had never been through that process. I had never seen anything like that before. The ground floor when you walk in is what could be a storefront, a business. We go upstairs to your beautiful living room. There are the bedrooms and things above that. Alvin, you’re going to be able to use that bottom space but that did create something interesting for our readers to realize. Our appraisal process was different because we had to almost get a commercial appraisal as well as a residential. 

It needed to be apples to apples basically.

They’re going to be looking at what’s the value of the property as potentially something where the bottom space could be rented or utilized as office space and a tax write-off.

More importantly, it’s almost exact for what we needed because I would always tell him, “I don’t want a big house. That’s a lot of cleaning.” I do most of that anyway and I have my own career. I don’t want for us to move into our house and spend the whole time on our free time cleaning and maintaining it. We both lived in the same apartment for a few years with a pool and the only time we use it is when we have our nieces and nephews over. We know we didn’t want a pool and a yard because where we live there are a lot of shrubbery, trees and plant life. It is beautiful but it kills me during allergy season. We also get a lot of random weirdo creepy crawlers. It’s not like pest from being nasty but stuff you see out in the wild. We had a praying mantis living above our door for almost two weeks, stuff like that. We understood we needed a space. We know we don’t want a yard or a backyard. We’re okay without a pool. We’re fine with an HOA. More importantly, he needs a space where he can work and not disrupt the neighbors or me.

That was very important because it’s hard to create especially with music and things that are loud. We live in an apartment building on the second floor. I feel guilty whenever I have the music loud. Having this space here, it’s a little more solid. It will increase my creativity and my productivity because I don’t have to worry about the neighbors. I don’t have to worry about the certain things that I worry about here in our apartment.

Also, he doesn’t have to worry about disturbing me. I leave him alone for the most part. The master bedroom is on the third floor away from it. There’s a door in the top of the stairs for his office area. Even the way the second bedroom is situated, it’s towards the back, not directly above his workspace. If we have guests or people sleeping over or when we have a little permanent roommate come along, he won’t be disturbing.

It’s interesting because for those of you who are reading, I can explain this to you. In a lot of developing cities or urban areas, you’ll see places that are taller as opposed to wider. This is one of those places. What that does for Alvin is it gives him that storefront. It’s like a small beauty shop or a place where a lot of tax guys have places where it’s a desk and a single room, then it’s a big stairway up. Now, you’ve got that ability to be able to pump your music as loud as you want down there.

He had his own bathroom.

You’ve got to get creative. I was also giggling while you were talking because those of you out there don’t realize, Ashley does not like bugs at all. We had a lot of discussions about bugs and that’s one nice thing about an HOA. You’re landscaping and all that stuff. It is taken care of.

I’m all for the planet, which is also why we did not kill that praying mantis that was living above our door. We swept it away.

HBH 33 | Home Buying Plan
Home Buying Plan: You have to be comfortable with your realtor and your mortgage lender because you’re going to work with them a lot for however long you’re looking for a house.

We’re seeing a lot of green landscaping now even. In California and Arizona, I’m seeing a lot of drought resistant stuff.

I’m big on things that don’t require a lot of water, more importantly for me. It’s not necessarily for the water bill but we’re also not offenders of using too much water living here in Southern California or in California in general with our droughts and whatnot. Global warming is coming for all of us. That was very important to me. That goes into the whole fact that it’s solar powered, which was one of the biggest things that I had to have. Had it not come that way, I had every intention of us installing it. That was one less thing we had to do.

I’m going to put you on a little bit on task here. You found me on the show. We worked on the planning and almost lost this place. Why don’t you tell everybody and help them understand what they can do so that they don’t lose their dream home? We got super lucky and it didn’t hurt that you’re working with me. I figured out how to finagle my way back in there and get that guy to sell us the property. Tell us the story.

You texted us, it was maybe August 10. It was a Saturday. You let us know, “Alvin, send me some more locations that you’d like to look in. I’ll put together a package for you,” so that you could start scouting places for us to start going out and looking. We both were on Zillow. This one right here, we found it. It was perfect and they happened to be having open house that day. It was around 1:15 when he’d seen it. We threw on some clothes. We went over there at 2:00 when it started and fell in love immediately.

The house looked like it did on Zillow. Usually, they make the pictures look better than it is but when we went there, it looked exactly like the picture.

It felt bigger actually too. It was instinct. He’s not always excited about certain massive things the way I can be immediately but it was reversed. I was very like, “Can we do this? Is this too good to be true? Somebody’s already probably put in an offer.” I’m excited but he was glowing. We texted you and let you know that we had this place in mind and you’re like, “I knew you two were going to do that because you’re so prepared usually.” You said that we’re always prepared and proactive. You knew that we might basically be going to skip to step C before getting through A and B. You went that following Sunday.

“C before A and B,” I want to reiterate that. 

You are a 24-hour guy and I’m still amazed at how hard you work because that next day, that’s Sunday, August 11, you went seeing the place. You thought it was perfect for us and put in your bid for us. Even though they did have an offer, you begged them to give us an opportunity. That day, you gave us time to read through the contracts. That evening you called us. You coached us through everything and read everything through for us patiently. We asked and you answered every single question we had. We have a friend who got his license in real estate and he gave us an initial coaching. That’s why we were able to ask such good questions but you still had all the patience in the world on a Sunday. We were about to put in $10,000 over the asking price. That Monday, when we were supposed to get our prequalification numbers from one of your wonderful loan officers, we’re not together, we’re both at work and it just so happened that we looked on Zillow and saw that it was pending and our hearts fell off.

I thought it was going to be the one that got away.

We went through the motion anyway with the loan officer and saw what we needed to do but for the most part, we had everything together. Having the offer, that initial extra $10,000 was what was going to probably make it a little bit out of touch. We left well enough alone. Towards the end of that month, Alvin had a trip to Costa Rica. Two weeks after his trip, we had a trip together with some friends to Jamaica. Two and a half weeks after that, we had a trip to Europe. We went to a few places there. We pretty much asked you, “Let’s put everything on hold for now, so that we’re not out of touch.” I happened to be jet lag when we got back, October 19th, which is a Saturday. The following Saturday, I want to say the 26th. I happened to be up early that Saturday morning and noticed the house was back on the market. It went back on the market October 13.

In the meantime, we’ve gotten all your ducks in a row. 

We were fortunate enough from that time in August to October, we had both gotten more bonuses. He bested more in his spotlight. We did more research in terms of what options were best to pull money from, etc. It was so much more perfect that time around. Funny enough, the two weeks that it was back on the market, they were so scared because the other people who made the mistake that we almost made and jumped the gun and put in an offer on a place they could not afford is what saved us, which is another thing, a side note that I love about these sellers. I don’t know them very well but they’re clearly not greedy people because they could have easily allowed people to get in a bidding war over their home and easily sold this place for $750,000 if they wanted to. It could have easily gotten that far.

Buying a home is random as hell. Click To Tweet

Luckily for us, they want an honest set of people. They were very skeptical but this time around, we emailed you on October 26 later that Saturday, “It’s back on the market. This is meant to be.” That Sunday, you reached out to their agent. Those people got it all together. The loan officer we ended up going with, we had already started getting things going and she was so thorough. She went ahead and made us do all this extra stuff. She was like, “In the event that they are scared and they want their own financial checks, I want to go ahead and do A, B and C so that you guys are ready.” We are so happy she did because by Tuesday, we pretty much opened escrow. This time around it was tight. Everything was together. There’s no drama. You’re amazing. You worked seamlessly with the person who we ended up going to who was out of your network.

She’s going to be on my network because she’s a good lender.

It did teach us a lesson. After thinking we lost that, we took a step back, went in and said, “We know we can’t afford A, B and C, but this time let’s have it on point. Let’s not have any trips or work stuff in the way so we can focus and not be rushing.” You were so not pushy like some people.

You’re definitely not pushy. We didn’t get any of those vibes at all. We felt like you were there to help genuinely.

We talked about you on our ride home from Spain.

You need different topics of conversation. You’re on your way from Spain and you’re talking about your realtor. 

We were talking about how we’re planning and get the ball back rolling and how much we had appreciated your patience. We told you we’re going to need about this much time. We didn’t realize we underestimated how many power trips that we planned. We planned these trips long ago and we didn’t realize how quick it’s back to where they were but you were patient.

It’s crazy because I try to explain to people like your potential future roommate. It’s very much like parenting where you think you’ve got it all figured out, then it starts and you’re like, “Holy crap.” That’s one of the great things I want everyone to understand is that you hear Ashley and Alvin talking to me. These are smart people. I’ve enjoyed every conversation with you. We goof off and we laugh but a lot of times, we have some heavy conversations. You guys are like me. We’re talking quickly. We’re talking about stock options, taxes, this, that and the other. When you’re people that have worked as hard as you can, we’re talking about these guys, they’re not old folks and they bought a $700,000 home. They have to have a level of intelligence. If you’re reading, you might think that you’re there, know this, just because you have got all these things together in your life to get everything together, you still need to start the plan. You still need to get ahead of yourself and you can go to C before you do A and B. We almost lost the dream house. You were confident and you guys worked your butt off.

We’re so picky that it didn’t matter if we ended up saving another $100,000 between now and then. If we couldn’t have exactly what we wanted, we weren’t going to be on hold indefinitely. That was the thing that we lost for a second. We lost our confidence and our enthusiasm. It didn’t matter that we had all of our ducks in a row in terms of our careers, paying off our debt, having met up with you and not assuming we knew everything. That is one thing that we both are big on. We don’t assume because we’ve done our research that we know everything. We still look to you in our initial meeting to tell us, “We’re here and we think we’re okay but where can we improve? What can we tweak? What are we focusing too much energy on that is actually okay? Maybe we should be paying this off or saving this instead.” That was another thing. All of that because we thought we lost this place and it went out the door, we were sad as hell.

That’s the biggest one that I talk to people about. People think, “I’ll call someone in a year and so, between now and then I’m going to pay off my debt and I’m going to save money.” What they don’t realize is without a guide, you might not be paying off the debt correctly. You might not be saving enough. 

It’s not that black and white. There are many little things that you can do to help yourself that you’re definitely not aware of. We thought it was like that. We pay down debt, save money and then we can buy a house.

Have a stable career when we knew it wasn’t that straightforward, which is why we reached out to you.

HBH 33 | Home Buying Plan
Home Buying Plan: Have open conversations with your realtor or mortgage lender that will help you learn the bigger picture of buying a house.

That’s the soundbite for this story that we’re sharing with people. Now they’ve got to know you but they heard you, Alvin, when you were saying you think that you save money and pay down debt, but it’s so much more even for smarty pants like you guys.

We understood that. One of the things that we were big on was someone who was willing to hold our hand, and not take for granted how much we know and how smart we are, and assume we’ll figure the in-betweens out because sometimes that happens. We needed someone who was not only good at selling and helping get a home but financially savvy because we know we’re advanced on the basic stuff. We needed someone who knows those cracks and crevices, those things that an agent definitely won’t talk about with their client and not even a loan officer. They don’t do that either necessarily. You already pretty much need to have your situation ready on paper and then they tell you what you can afford? That was what we wanted. We wanted someone who would hold our hand through the stuff and also confirm what we do know. It’s like, “You do understand this. You’re accurate. Let’s move on to the stuff that you don’t understand.” That was big to us.

That’s a great point. It’s something for everyone out there to realize that either you need to be comfortable enough with your realtor to have the big discussion. Your realtor should be able to have someone to refer you to financial planner or whatever. I remember our conversation. We had a big conversation one night about your entire financial picture. It’s not buying this house. We were talking about investments, stocks, 401(k)s and pulling money because this is the biggest purchase of your life. If your realtor is either not willing to talk to you or doesn’t have someone to refer you to, then congratulations. You hired a professional door opener. That’s all they do.

It’s someone who’s waiting to cut the check, get their part and be out. That was the last thing we wanted.

For me, that was one of the most fun parts of us working together. It was those heavy financial conversations. As we’re talking about permanent roommates, the children, futures and life, that’s what we’re talking about. This is not like, “Let’s go buy something.” This is the base of everything for you.

Being from South Central and not having lived in a house most of my childhood, this is beyond my career and other stuff I’ve accomplished. This is, like most people, the biggest thing I’ve accomplished in my life. At one point it seemed impossible but because I am the weirdo that runs at the things that scare me by learning as much as I can, I have him to be able to be right there behind me fearlessly doing it. I feel it’s what manifests someone like you into the situation. Instead of us looking to our parents, our other friends, because the one thing that everyone loves to do after they get their home is tell you, “My agent is this, my loan person is that.” No, we’re very patient and firm on finding the person or the situation that suits us and thoroughly digging into it. It can’t work for just me or him. It has to work for both of us because our lives were very different growing up but our core values are the same. That was the thing with you. We needed someone who has a soul. This isn’t just the commission you’re chasing after. You care about getting us in there and how we’re going to be able to maintain our life and our lifestyle once we’re there, before even looking at homes and at what we can officially afford.

That was the big thing we talked about. Let’s figure out your max but then let’s back it up. How much are you going to have left in savings when you have this new account? When you have this new monthly payment, are you going to be cool with that?

How to diversify our retirement instead of thinking we had to leave that alone and use all the money we saved up.

It’s important to have these. First of all, you have to be comfortable with your realtor and your mortgage lender because you’re going to work with these people a lot for the next however long you’re in escrow or however long you’re looking for a house. When you’re comfortable with your realtor or your mortgage lender and you can have these conversations that are open, it leads to other things that will help you learn how to buy a house and the bigger picture of buying a house.

The easiest way or the quickest way to eat an elephant is one piece at a time. If you have the right people with the soul who care about how you’re going to bear once this transaction is complete, you can do it in chunks. Your agent and your loan officer are going to know your whole adult life on paper and you need to be real. That is very intimate.

That’s something very interesting because you guys are very well-researched. At some point, you have to acknowledge because you put in a lot of research and you do a lot of thinking, work and saving to get there, you’re still asking a bank for $500,000. They’re not going to give it to you just because, “This is me and I’m nice. Here’s my Instagram.” You’ve got to give them everything.

A good credit is not enough. You may have a good amount saved up and you may have good credit, but the home you’re looking for may not be in your income bracket. For us, we ended up having to put down a lot less than we allocated for, which was a blessing. You never know, people may be stressing and thinking, “I have to have 10%,” which is what we always traditionally thought. You may not even need to come anywhere near that depending on if you have the right people explaining the options and keeping you up-to-date with how the interest rates and things like that change almost daily.

Buying a home is not that black and white. There are many little things you're definitely not aware of that you can do to help yourself. Click To Tweet

It’s almost 3 to 4 times a day.

They’re telling you what to do between now and picking a home and putting in an offer so that you don’t have any big shifts that could limit you from getting the best possible interest rate or outcome. I know a lot of people stress about that. We did anyway.

Many people come into it thinking, “I’ve got to have 20% and I have to get the greatest interest rate.” Here’s the truth. In 2018, 1.76 million first-time buyers, the average down payment was 6%. Most of them were probably 3% to 3.5%. The reason it’s averaging 6% is because there were some people that were doing 20% because they got a gift from their family. That’s myth number one blown out the window. 

If you may not have to put as much down as you think, interest rates may be higher next year.

The second myth is I’m going to shop around like crazy for the best interest rate. The truth is the interest rate is going to change four times the next day. When you shop with somebody, you’re not shopping or calling the lenders. It’s like gas stations. On one corner, there are three gas stations and they’re all going to be the same price. In a week, all the prices are going to change but they’re all going to be the same price. You’ve got to go find the person who can do the best deal. Whenever you’re ready to lock in your loan, you’re going to get the A-rate if you’re an A-borrower as we say in the business. One last thing I got to hear because you brought it up. Ashley, tell the story because we talked to Alvin about him and his life and you briefly skated over. For those of you who don’t know, she’s from South Central and now she bought a $700,000 house. Tell us how you got here. I know because you’re super smart but I think it’s awesome.

I’m from South Central LA. We both work in tech. I work at Snapchat. I’ll say this because it is very relevant to my life. One of the first things that we listen to and one of David’s podcast that he says in terms of what you need to do to start the building blocks, which is something I did a while ago. You may have to change your career. You may have to change what industry you’re in. I used to work in fashion. I went to school for that. I loved it but when I hit my late 20s, early 30s, I was like, “It’s not worth the stress. This pay it’s too fickle.” Honestly, I was bored and I figured I can still be in an industry that I enjoy. I could still do something that I love but I need to make more money.

You went from fashion to tech?

Yes and all through grit studying. This guy is helping me and using networking with people he worked with from previous tech companies and then giving me the tools that I needed and studying on my own. I’m going from contractor to here putting in the time at one company, then being a contractor at Snapchat, then getting hired on full-time. With each transition, I maintain the same title so that I was in the same industry for over two years now and also my pay increases each time I got to a new space.

You’ve been thinking about home ownership. The fact that you were maintaining the same title, you knew that was important.

I learned that from one of our friends whose father is a loan officer and he bought a home. He’s one of our best friends. He’s the father of our goddaughter and that was one of the things he told me about a few years ago. One of the key things is being in the same industry for at least two years. The bank’s going to want proof of that. For my friends out there who are artists, freelance or self-employed, if you’re doing stuff under the table, you better get it together right now even if you need to pull it together with PayPal invoices. That was one of the things that I learned. Going from fashion to tech, making sure to maintain the same title and also increasing my income on paper. I definitely did some consulting and some freelance work in between but I made sure on paper my day jobs.

Two years of tax returns and no gaps. That was key. It was one of the things that stuck out to me in one of your earlier podcasts that we listened to because we had already been living it. For some people, it’s hard for them to let go of a thing that’s their passion. Your passion isn’t always going to be your job or your career. You can be good at this thing over here and that thing will afford you time to pursue your passion. They don’t always go together. Coming from South Central and it was important to me to live somewhere in between. Him being from North Long Beach and me being from where I’m from. We also both work in Santa Monica but we cannot stand the idea of living in West LA or Santa Monica or that because it’s tiny, it’s crowded and it’s overpriced. It was important to us to find that perfect medium where I can still be close to my mom and my cousins and family in South Central and his family in Long Beach. We’re in that nice little sweet spot. That’s me, LA girl getting closer to home but in a nice sweet spot. We have that much faster to commute to work. I do love what I do.

I do love Snapchat. I like to use it a lot if I didn’t tell the truth on that. I did have to commit to I’m going to need more money if I still want to live in Los Angeles County. I love LA. It’s is my home. That’s why I keep bringing up where I’m from. Him as well. Long Beach is a part of Los Angeles County and it was important to us to be able to afford to live in our home county more than anything else, which is a huge accomplishment considering how expensive it is.

HBH 33 | Home Buying Plan
Home Buying Plan: You may not have to put as much down as you think; interest rates may be higher next year.

That’s what was interesting when we started. At the beginning you were like, “We want this one little town.” I know Gardena, the place where we ended up buying. I was like, “Okay.” All of a sudden, this property, which was the perfect mix of everything that you could ever ask for. All the way down to Alvin’s DJ basement, it appeared and it was right there. You had put the work in after the first time when you went to C before A and B. After that, you were lined up that we’re in a position to purchase your dream home and we’ll be there in a week. 

One of the things that was our spill when we first met you, which for those of you reading, if you reach out to this man, know that he is going to be in touch very quickly.

Are you calling me a stalker?

Not a stalker since you don’t waste any time. That was very important to us because I can be very chop-chop person and you do it with such ease and enthusiasm that I was like, “This is it.”

I can’t believe you said chop-chop. In the Sidoni house, there are two plaques of chop-chop. My dad’s like, “We’ve got to get moving.” It’s part of the market right now. We almost didn’t get it the first time because it was already in escrow and we all have to work together. I could do this for hours. What were your biggest fears going into this entire process that either manifested themselves or turned out to be not as scary as you thought?

My biggest fear was being able to find the right realtor or right mortgage lender because they don’t teach you any of this in school. Going out there is like a little fish going into a shark’s ocean. It’s very nerve-wracking because you don’t learn about this stuff until you’re about to buy a house. That’s what terrified me the most. Are we going to find someone that’s honest who’s going to help us or are they going to try to milk us for our money? Seeing that we’re in a vulnerable spot, are they going to do things that’s not going to be in our favor? That was probably my biggest fear. I’m glad that we reached out to you because on your podcast you’re always like, “Reach out to me, contact me.” I’m glad we took that first step because that was the bridge until all of this goodness that we have. It was taking that first step to hit you up and say, “This guy seems genuine on his podcast. He might be a decent guy if we reach out.” I’m glad we did that because once we started talking to you more, that fear started to subside. I was like, “When he speaks, he sounds genuine and you feel as genuine.”

He keeps that same energy we meet him, which is perfect.

The podcast is not a character. That’s just me. 

A lot of the things that you said when we first listened to you for about two months were things that we’re already doing in terms of like we paid off most of our debts. We’re very humble people. We’ve been sharing a car for the last few years and we could easily get a second one but why not? We continue to have our jobs near each other. We don’t live beyond our means and that was a big deal.

You have a badass house. 

My biggest fear was not finding exactly what we wanted within 2019 because I knew we’d get it. I was like, “I’ll do it now. I want it now.” When we first met you, he was thinking another year from now and I was like, “No, that’s not happening.”

I remember politely nodding at Alvin and looking at you and going, “This is going to happen.” 

Good credit is not enough to buy a home. The home you're looking for may not be in your income bracket. Click To Tweet

It’s going to be sooner than that. One of my biggest fears that was relieved was him having all of his questions and fears, because when I understand something and when I feel what I feel, I don’t question it too much. I keep going to the next step. He has to questioning it over and over again. I can say the answer, you can say the answer, but it’s that 50th time where it snaps for him and then he’s off to the races until he hits the next thing. For me, it was important for him to maybe be a little bit more excited than me, for him to be more comfortable than even I have been. He’s the other half of this equation and that is a big deal. I hope that we get to live and get all this crap together, but not in a house where it was mostly that something I wanted or not in a space that he compromised for me. That was my thing. I hope that every step of the way, neither one of us is compromising because this is something we should pull and it’s all or nothing. That fear is completely gone because I got exactly what I wanted.

That was the neat thing. As we went through this process, we were answering questions. A lot of what people don’t understand about the relationship with your real estate agent and you as the buyer, is that on one hand, you completely trust that they know what they’re doing because you’ve done the work. You’ve prepared, you’ve interviewed or you’ve listened to the podcast. You’re comfortable with your choice but on the other hand, there were tons of times when Alvin was like, “David, break this down for me.”

Asking the same question fifteen times but that’s what he needed.

I want to be able to answer that for you. That’s why I started this show. I’m assuming I’m going to tell you the same thing five times. The podcast is time number one that you hear it. Time number 2, 3, 4 and 5 will be when we’re in the transaction. Suddenly, we’ll be in a counter offer and I’ll be able to say, “Remember how we talked about time and money?” It was great because I was giving the answer when Alvin came to me like, “David, one more time. How does this work?” 

I know there are a lot of people out there like that. Don’t be ashamed.

There’s a ton and there are a lot of people who should. 

I have to answer him and I have to answer again and explain it as well.

Don’t just nod and say, “I know what’s going on.” You have to understand you have to ask again because you will be uncomfortable the whole way through if you don’t ask the question over and over again.

If you’re with someone doing this, you both, even if you’re like me, and I can be a little quicker on some things because of semantics. That’s one of my superpowers. I understand how people say something even though they only know how to say this one way and another person is saying the same thing but differently. They may not understand each other but I get it pretty right on. I understand that’s not necessarily his biggest strength. It’s being patient. I know that I got it five repeats ago, but I have to wait for him to fully fill it in his spirit because you don’t want to bring that bad juju into your new home, especially your first home. That’s where it’s party. Especially in any relationship, you don’t want to be tearing each other apart through an experience that should be exciting, that should feel this new high, this new thing that you get to live in.

Being able to communicate on every level and getting you as comfortable as you can. That’s the moral of the story. You guys are very prepared people. You’re very knowledgeable about, “I need to hear this another time. I’m good. I got that, move on.” Yet, it was still 30 days of handholding and craziness. No matter how much you get ready, you are not ready for this. 

You could have your license and if you’re not doing it for years on end and also financially knowledgeable like you are on an academic level. You know the history as to why things are the way that they are. The people are paying attention to the podcast. It’s not fluff. It’s not in between talks there. It’s very significant to understand these interest rates or the FHA loan versus a conventional loan, where all of this began because it helps make so much more sense of everything now. Also, a quick side note, the one thing I will tell people is do not go with an agent that is only doing it part-time. We almost had a friend or two who ask us to go with them and it was the one thing we were like as much as we’d love to help this friend makes money, we need someone that’s, “This is all you do.” Especially for a first-time home buyer, you want someone who this is their life. If they have a family, you want to have nothing but time to answer your question. If they dabble in it, they got their license and it’s a side hustle, you’re going to be surely disappointed.

God bless everyone with the side hustle. You can sell your potholders on the internet, but don’t sell somebody $500,000 house.

HBH 33 | Home Buying Plan
Home Buying Plan: Your passion isn’t always going to be your job or your career. You can be good at one thing that will afford you time to pursue your passion.

Not even a little bit.

As you guys know, you’re some of my favorite if not my favorite. To all my other clients out there reading, you’re my favorite too but you got serious competition. You guys worked your freaking rear ends off to get here and I’m so happy for you. It was funny, we’re getting ready to do this show but we closed and I’m driving home because I’m working late at night and I send them a little audio message of me being happy for them. No one is going to do this podcast. It’s 9:00, 10:00 at night and we’re all crying about them getting a house and here we are on the show. Everybody, notice we closed but they still don’t have the keys yet, so get ready. 

It worked perfectly for us because then we get to move at the top of December, which means no month of rent. Also if that was all they needed, I’m with it. If you have all your ducks in a row, when you get to that point, unless there’s something weird with the sellers, it can go very fast.

In California, we have a normal seventeen-day contingency period. For those of you out there who never heard of that before, it’s the buyer beware period. It’s your chance to do your due diligence. While that’s happening, you’re also filling out all the escrow and all the loans. It’s twelve days of insanity where it’s paperwork, emails, texts and then all of a sudden, all that’s done. 

It’s FedEx packages with mountains of stuff to sign.

It’s a lot but it used to be worse before we got so much electronic stuff. Thanks to us and the planet too. It’s a lot of tree killing to buy houses. I don’t think people understand how organized and put together you guys are, yet it was still a tornado once we got it.

It’s like that because it’s crazy in the beginning and then you’re in the eye of the storm. It gets crazy toward the end.

You almost miss the chaos when you’re in the center of it because you’re like, “What’s happening?”

Day seventeen to day 25 is like, “Hello.”

There are many things happening out of order but that’s the order of it. From prequalifying to conditional approval, to you’re finally approved. A lot of people need to understand that this was another reason he and I didn’t tell many people because we knew we were going to get approved, but that sometimes happens that you don’t. You can be stuck paying the sellers all these fees because you have to drop out of escrow because you have beer money and champagne tastes. We know a couple of friends of ours that are close to us who almost lost a home because of that. That was something else we had in our minds going into it, is to be within our means because all of these things are going to be happening simultaneously and one misstep could drop it and make it all fall down.

That’s why I talk so much to people about you cannot tap your phone to get a mortgage if it takes five minutes. That’s the first part of it. The second part of it is what you were talking about, Ashley, you get a pre-approval a month before you go look at a property, but then when you’re in escrow, seventeen more people look at your loan. It’s not approved because you have that piece of paper from a month ago, you’re going to an underwriter to another underwriter. It’s a bunch of people’s job to look at it and figure out how to not give you this money. They’re trying to figure out what’s wrong with this loan.

It can get very personal some of the questions they may ask you in terms of any blips on anything with your bank statements or your retirement or your credit or anything.

In any relationship, you don't want to be tearing each other apart through an experience that should be exciting. Click To Tweet

I’ve had clients call me and say, “The bank called me and asked me why I deposited $275,000 that wasn’t on the first and the fifteenth because that’s when I get my paycheck. They asked me where I got that money from.” The guy was buying a $700,000 house.

You have credit card and you happen to have a large purchase that you intend to pay off before your balance is due, but that hits the radar that you spent $1,000. Why did you do that? Where is this from? If you don’t pay that balance off before it’s reported to the credit bureaus, it can change your score.

I have seen people buy their new couch or their new washer and dryer after contingencies are removed because they’re excited but the loan hasn’t closed yet and it screws up the loan. A little $700 or $1,000 purchase and suddenly they don’t realize how close they were on the loan balance and now they purchased the wrong away. 

You have to be patient and you have to be ready to maybe have a furniture list living room for a week if it means not tipping the balance in any way down to the hour, literally.

Wait until it’s done and then do what you want. I tell people all the time, “Wait until it’s done and leave that one room empty.” I don’t care if your family comes over because you need to figure out how to pay for a house. Take 2 or 3 months making those payments. When people come over, tell them, “We’re not furnishing that yet because we’re going to go antiquing,” or whatever. “We’re going to go to the flea market,” just leave it.

If they bought a home, they should understand the deal. The last thing anyone buying a home, one thing with us is we don’t live to make other people happy or impress anyone. We have to live with this. If it means not having a couch for another week, then that’s what it is.

I’m happy to let you know, you don’t have to do anything to that living room. It is beautiful. 

We got a nice extra chunk back from escrow because of all the over amount that we paid on certain things, which could be another surprise people don’t know about with closing costs.

Escrow pads everything.

That could be something that you can use towards furniture or things that you want in your new home or put it back into your account.

You guys are the greatest. I could do this all day long. Thank you so much. Those of you out there, Alvin and Ashley, they’re the bomb.

I love those guys. I don’t know if you could tell. They’re amazing and they didn’t even get into the real nitty gritty. That is a smart power couple. We talked about some heavy financial stuff and I could do 30 minutes on recapping all of the super useful pieces of information that came out of there and a lot of stuff that didn’t even come out. As I said, we could have talked forever, but I’m going to break it down quickly for you to recap a couple of little nuggets. More importantly, I encourage you to go back and read it again. I know you missed something because there was so much in there.

One of the first things they said that was incredible. You never know, maybe you don’t get the keys right away because sometimes it isn’t about what you want. I know you think that if you take all this time in playing an effort and you’re putting up $200,000, $300,000, $400,000 or in their case, $700,000 that you’re going to get everything you want, wrong answer. Real estate is about time and money. Depending on who needs what, you’re going to have to give up some of one to get some of the other. What do you want to do? Do you want to get the seller more time or do you want to get a better deal? Don’t forget, this entire time the seller wants to win too.

A good analogy is you are not a customer buying a new car. If you’re going to buy a new car, you can demand all the options. You don’t care because you’ll walk away and get down the highway and there’s another car dealership right there. You can demand all your options or you can buy it online and get it from one of those crazy vending machine things. You walk away and there’s another dealership that’s going to give you exactly what you want if you got the money to pay for it. Home purchasing is not like that. Home purchasing is not a process of selection. It’s a process of elimination of the available homes that are for sale. It’s like buying a used car on a used car lot. It’s not buying a new car where we used to go in and you choose everything and can walk away whatever you want and get it someplace else.

What you do is you end up picking whatever cars available that day on that lot that fits most of your criteria. In the process of buying a home, keep in mind that a lot of times, not only are you picking whatever car is available, but you might pick that car and might be represented by an insane real estate agent or a seller who has super high demands on time or money. That means that maybe you don’t get the car with the low miles and the leather interior package for that low price that you want. Things are going to have to be compromised but the more prepared you are, the better the offer that you can make.

One of the other great points he hit on was don’t do this on your own because you’re going to think that you’re doing things in the ABC order. That was one of my favorite parts of the interview. That was what they said. It’s not me, that was them. People who have been through this. You think you’re doing everything in ABC order and then you take things a little bit out of order. You walked in an open house before you’ve called your realtor, before you’ve finished all the paperwork with the lender and you think, “We’ve been doing everything great for years. We’re good and smart people,” then you realize that you totally skipped A and some of step B. Now, you aren’t getting that home and it’s your dream home.

Go back and read that section of the interview again because this is by far the biggest mistake that I have seen hundreds and hundreds of first-time buyers do. It’s not totally your fault. No one’s given you the information. No one’s explained to you, “You need to start planning early because realtors suck and don’t talk to you until they think they can get paid from you in 30 or 60 days.” That’s the way it goes. The good thing is there is a portion of agents out there that will work with you. It’s just that the entire industry is not geared to do it that way. What do you do? Especially people of a younger generation who have had a smart phone in their pockets and they hit puberty.  That means that you’re going to start looking stuff up and thinking you can do this all on your own, then you skip steps. You go back and read what Ashley has to say. She was smart, heady and intelligent. We talked about so much financial stuff. It blew my mind. If that girl skips a step and can’t do it on her own, trust me lot of the people out there including myself sometimes, you can’t do it. You don’t skip steps.

We talked about the fact that you’re already going to have to compromise when you’re buying this used car and not the new car that you thought you were more than you think. If you skip steps, double the amount of compromise that you thought you were going to have to do. Alvin said it’s not that black and white. Just because you made it out of the hood, you’ve got a great stable job and you’ve been on the right track for a long time. You pay down your debt and you saved your money, but you did it without anybody telling you how and where you should be doing that. What happens is you might have done all that stuff and been on the right track for a long time and you’re doing the simple logical things, but it doesn’t mean that the bank is going to be ready to give you that deal right away. If you can’t have that deal together, particularly when you’re turning around trying to ask the seller, “Can I buy this house?” If you don’t have all your ducks in a row, who cares? Even if you do get the deal, you’re not getting the smoking deal because you’re already limping into this as a weaker party in the negotiation.

You might have skipped A totally, and you might not even be considered for your dream home even though you’ve done everything right to get to this point where you can be thinking about buying a $700,000 home. Even if you thought you did everything right, you might miss your dream house. Alvin and Ashley were amazingly lucky that we got back into it and I fought for them and we got them in because they had skipped A and gone to B and C. They had life and things happening because they were traveling and all that. That’s the way it goes. If you’re skipping A and going to B and C and then looking to try to get to D, this end-destination, that’s called driving without a map. You’re going to get somewhere and you might think you know how to get there because you’ve already overcome a lot of obstacles in your life. Why would you do anything on your own if you don’t have to and it’s free? Hire a pro for free to help you along the way. There’s one little nugget at the end there too. Ashley talked about increasing your income on paper.

This is a little more advanced stuff for those of you guys who might be self-employed or might be not showing everything on your tax returns. Read that. If that made any sense to you, if that resonated, if you’re not showing as much income because you want a big old fat tax return, if you’re increasing all your write-offs so you can get more money every week, that’s cool for now but fixing that can take years. That means you need to start a plan. It’s a big deal to make all that stuff work on paper. I’ve done it 100 times, but trying to explain it to someone ahead of time, it’s too difficult to break it all down and explain everything that has to be done until we open everything up and dissect it. As Ashley said, “Get ready for it. They’re going to look at stuff you don’t ever think anyone’s going to look at.”

No worries, a good unicorn is going to help you way before you’re ready to buy and they’re going to get you ready to buy like a champ. The last piece I love from that interview was Alvin talking about that they don’t teach you this in school. He’s right, they don’t. You need to learn this right. You need to learn it early and you need to go on ABC orders and don’t skip steps. It’s not because I want my job to be easier, but because I don’t want you to call me and us get together and realize that you’re going to miss out in your dream house. I’m not mad at you if you don’t know the steps because no one’s ever taught you. Keep doing what you’re doing, read the blog.

This is the only place on Earth where they’re teaching this. This show where they’re telling you to get this done early and go find somebody in demand that will work with you. If you don’t bail on them, then go get somebody else. Someone else will realize how important you are. Better than all that, you can take my number one lesson from the show. It shouldn’t be called How to Buy a Home. It should be called How to Plan to Buy a Home. If you’re even thinking about sometime in the future in your life, DM me, text me, email me, call me, get a unicorn. Let somebody else run the show for you. The right agent will get the right lender and the right plan. It might take 1, 2 or 3 years, but you will exponentially cut down the time it would have taken if you tried to do this on your own.

Most of the time, we can cut it in half. I’ve had 2 or 3 podcasts listeners that didn’t think they could ever do this, and in less than three months they’re in a home. You’re going to have to compromise less at the eventual time that you will have to compromise in the negotiation because you followed the right plan. The ball is in your court and who you choose matters. That’s what’s going to help you win the game. As you read through this whole episode when you start with that professional guiding you, that matters even more. Do yourself a favor. Find a great team like Alvin and Ashley did. You’ll hardly notice anything.

As you go through the process, it’s going to be easier than you expected. It’s your choice when choosing a guide. Choose a good one, find a unicorn and get some magic. There are other ways you can get more information. You can check out How to Buy a Home Facebook page, check out the YouTube and the Instagram. They’re both David Sidoni, just search for David Sidoni. Some of them had How to Buy a Home guy, but YouTube and Instagram are great places to see some more content and also a great way to reach out to me. Follow, subscribe and most importantly, get a plan. Don’t just read because the day you finally get up and decide you want to do things, you’re going to realize you should have started months ahead of time. Now it’s going to take you that many more months to get to where you want to go.

Go to my website at DavidSidoni.com. Send me a message and let’s find you a local unicorn and get you on your happy path. I’m here to help you. By putting this show out here and helping you people all over the place, I’m taking time away from the clients I could be working with here. That’s because this is important to me. I don’t mind that it’s peanuts to send you out to other people all across the country. I know how to help and find the right unicorn for you. Go to my website and send me a message. Let’s get you a local unicorn. If you like their story, I truly believe that you can be next.

This has happened. This is happening and if you’re reading to this in the future, I’m probably sitting in some fancy studio doing this all day long with a huge team around me because I can feel it growing. In just a few months, we’ve gone from people touching and reaching out to us every once in a while to reach out all the time because the dreams are coming true. All you need is a guide. You don’t have to feel lost. I do believe that you’re next and you can have the same story and be as badass as Alvin and Ashley. Have you been reading for a while and have not reached out or not asked for a unicorn in your area? What have you got to lose? If you don’t like the unicorn, don’t use that agent and stop reading the blog. Who cares? Do it and be like Alvin and Ashley. First, get a unicorn and then turn yourself into a badass. Your story can sound like theirs. 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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Here More Episodes

  Back to the basics. David Sidoni is back with a glossary of all the “M” words you need to know when you are preparing to buy your first home. AND A BONUS – Scam alert! How to spot real education websites from the ones just trying to sell you something. How to stay protected …

Ep 131 – First Time Home Buyers Terms And Definitions From A-Z – “M” Read More »

  David Sidoni is back at it! This time, he goes through the glossary for J, K, & Ls. So tune in and enrich your vocabulary and learn important terms and definitions as you dip into the verbiage of real estate and make your first-time home buyer’s journey memorable and a lot less complicated and …

Ep 130 – First Time Home Buyers Terms And Definitions From A-Z – “J, K & L” Read More »

  Ever planned on buying your first home, but you’re unemployed? Is it possible to work things out without an income stream coming for two years? To answer those questions, tune in to this episode and hear the real-life story of these first time home buyers who bought their first home WITHOUT two years of …

Ep 129 – Interview With A First Time Home Buyer Who Bought WITHOUT Two Years Of Employment Read More »

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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