Introduction to Homeownership
Hey, Dave Edwards, Treasure Valley Dave here in Nampa, Idaho, and welcome to our webinar. This will be an excellent resource to accomplish your goal: becoming a homeowner. It’s a very, very worthy goal, and we’re all here to help you get there.
The Six Vital Steps to Homeownership
So, we have six steps in our webinar, and each one is vitally important. And for each of them, we have this excellent little booklet with places to jot down your questions and ideas to ensure that as you’re going through things, you get everything. Also, we have lists to get your mind going on different options you want in your house, so it’s pretty comprehensive.
- Step 1: “Decide to Buy.” Do you need to buy? Do you need to move?
- Step 2: “Questions to Ask When Interviewing Your Real Estate Agent.” That’s going to be hugely important.
- Step 3: “Financial Situation Worksheet.” This is about your whole pre-approval process regarding finances for your home. We have a special guest on this one, and he is knowledgeable. He is a star in my book.
- Step 4: “Things to Consider About Your Next Home.” This is based upon a lot of experiences, and we also have a special guest on this one who will be talking about some real-life experiences and what works and what doesn’t.
- Step 5: “The Process”. There are so many spinning wheels and balls in the air, and we will talk about those things that impact you. Things that you need to know about; things that you will be involved with. There will be a whole bunch more behind-the-scene stuff that you’ll never even know, but know that we’re here to ensure everything gets done.
Step 6: “You’re a Homeowner… Now, What?” Well, gosh, there are many things involved with being a homeowner. Sometimes, you need help, and we’re here to help you.
The Pressing Need for Homeownership Now
So, why is all this important? It’s crucial, especially if you’re currently renting or living somewhere without owning your property. With each passing day, it feels like you’re getting further behind the curve. The future of house buying is set to become even more challenging, particularly with the inflationary trends we’re observing.
Procrastinating on this decision will only compound the challenges. Thus, even if you’re considering a home that isn’t your dream house, it’s a stepping stone. Getting onto the property ladder allows you to benefit from property appreciation, making it more accessible to upgrade. It’s a journey of incremental steps toward your ultimate goal.
Interestingly, once you achieve this primary goal, you’ll realize your objectives evolve. That’s the quirky nature of life and aspirations. The essential aspect is to initiate the journey. Every significant expedition starts with a singular step, and that’s our mission for today.
Empowerment Through Informed Decisions
Throughout this webinar, we’re equipping you with an arsenal of information. In the end, clarity should be your ally. You’ll have a profound understanding of the home-buying process, and more importantly, you’ll be equipped to ask pertinent questions.
Knowledge is a potent antidote to stress. Understanding the intricacies of homeownership and having a reliable ally by your side drastically reduces the anxieties associated with this journey.
Not to say, there’s not gonna be hiccups and stuff along the way. But having this open line of communication with all these people on your side to get the goal accomplished will make things a whole lot easier. So, I hope you get out by the end of this webinar with clarity on what you know and enough information to see what you don’t know.
Why This Webinar Exists
So why do I do this? Well, because when we moved up here, we needed a place to buy, we wanted to have our own home. The process that we went through was enjoyable. Our agent was fantastic, but we didn’t go through any of the steps that we’re going to go through in this webinar.
Looking back on it, it could have been a lot faster process if I’d had this information. We could have been more clear on what we wanted. We looked at about 80 houses, started at this end of the spectrum, and ended up over here. And we were delighted with the one we got, but it was an extensive process. We wasted our agent’s time and might’ve missed some opportunities.
So that’s one of the reasons I do this. Also, I like helping people find a better quality of life. And maybe that’s getting into your first home, which is not your dream home, but it’s the home that will work for you as your first home. I also want people to get to the right-sized home, whether for expanding their family or getting into a smaller place now, depending on where they are in life.
Talking with people, finding out what would make them have a better quality of life, and then helping them figure out how to get there is just so rewarding. So that’s why I do this.
So, what are we going to do? Well, let’s go ahead and get started now.
Diving into Module One: Decide to Buy
All right, so let’s get into module one of the steps to homeownership: “Decide to Buy”. Do you have your booklet downloaded? If not, download that so we can review it together and highlight anything important to you.
Assessing Your Home Buying Needs
So, have your needs changed? Is now the right time to buy? Those are questions that I hear frequently, and we need to get those answered. So why decide?
To Move or Not to Move
The big question is, “Do you need to move?” If it’s only a passing thought, and you don’t have any pressure or motivation to move, then moving to a new home is not the right thing to do right now.
Maybe you have a job transfer, your family’s size has changed, and you need a house that will work for you now. Or perhaps you’re tired of driving as far as possible to get to work every day. Those are all excellent reasons to move and to buy.
We have a checklist of some reasons that might apply to you. Do you need to be closer to work or school? Do you need to be in a safer area? It may or may not apply to people already living in the Treasure Valley. Wherever you are in the Treasure Valley, it’s probably not unsafe. Still, you might be living someplace else in another state.
That was our exact motivation for moving to Idaho when we left California. It was just as easy as that. We didn’t care if we came up here; we didn’t care what the house would be like. We just wanted to get to a safer place.
Reasons You Might Delay Buying a Home
- Some life changes are going on.
- Someone in your close family just got diagnosed with some disease, and you don’t know where that will take your family down the road.
- You can’t afford what you need.
There’s a difference between can’t afford what you need and can’t afford what you want.
It’s also possible you’ve just gone through bankruptcy or had some other thing hit your credit standing, and you need to work on that. Or you’re saving up for a down payment, which is also part of the financial aspect we’ll discuss in module three.
So those are good reasons not to buy. But if you noticed something about all those, they’re all temporary reasons. Those things happening there will all pass somehow, and then it’ll be time to decide.
Planning Even If You're Not Ready
So, even if now isn’t the right time to buy a new house and move, starting the planning process — at least thinking about it — is fantastic. Also, if you’ll be moving in the next 12 months to two years, getting in touch with real estate agents and a lender is hugely important. After all, a lender can help you determine the tweaks you can make to your buying process. Then, you know you’ll be in a better position regarding financing.
Understanding the Current Housing Market
I frequently hear this: “Is now a good time to buy with this crazy housing market?” Absolutely, yes. We’ll go through some reasons as we go through the course.
Historical Price Trends
One of them is that house prices always go up over a given period of time. Like every 10 years from 1963 to 2023, it goes up about on average 60% every decade. That’s about 6% a year.
Inflation and Housing Prices
You may have noticed, but we have record-high inflation, and that’s bound to push housing prices up even more and more.
Demand in Specific Regions: The Case of Treasure Valley
And we also had that strong demand when you’re talking about someplace like the Treasure Valley. I know that builders are building more houses. As for existing homes, people aren’t moving out right now, so our inventory still needs to be higher.
Debunking Internet Myths
Low inventory, steady or high demand, means prices will certainly not fall, certainly not crash like some people on the internet would like you to believe.
Who do you talk to if you’re trying to figure out when is the time for you to start considering moving or buying? Talk with your family and friends.
Benefit of Feedback
You can’t go wrong with getting some input from your family. It’s like, “Yep, that’s a great idea, but have you thought about this?” Sometimes I have thought about it; sometimes I haven’t.
Still, only talk to trusted friends and relatives who have undergone the same process. It’s like crabs in a bucket. Some people want to see only some people get ahead.
Buying your house will be a great financial move for you and your whole family. They call it familial wealth, which increases over generations because of what you do now.
Engage with Real Estate Professionals
Talk to a real estate agent because they’re going to be a key member of your team. They have lots of insight and know the right questions to ask. Well, not every agent does. We’re going to talk about that in module two.
The Role of a Trusted Lender
A trusted lender matters because a massive part of buying a house is the financing part. Whether you need a mortgage loan or want to go all cash, it might be good to talk with a lender to determine its pros and cons.
Leveraging Online Resources
Another great thing is the University of YouTube. You may be an alum of that, but I’ve just graduated a couple of classes there.
You could learn about your new area up there. Again, if you’re in another state, wonder, “Is the Treasure Valley the place you want to be?” That’s wild because the Treasure Valley is such a diverse place.
Also, you can get to know your real estate agent and see if they’ll be a good fit by watching their YouTube channel and see if they answer the questions in a way that makes you happy.
The Timing of Home Buying
So, how does the timing work out on all of this? Well, the best time to buy would’ve been 10 years ago. The second best time is right now. And we had to put it on there: the third best time is when something going on in your life passes.
For instance, that could be when you need to repair your current home. You don’t always have to do that because someone may want whatever you spent thousands of dollars fixing. Consequently, they might have wanted it a completely different way, and they might rip it all out. So, talk to your real estate agent where you are to get some ideas on where to put your money for fix-up expenses.
Selling Your Current Home
If you’re in a typical home, your agent can tell you the average time you expect it to be on the market. Sometimes, people want to wait until their home is sold before moving to or buying a new one. There also are ways that we can make that all happen simultaneously.
If you’re currently renting, you may need to wait until your lease ends. But then again, that’s a numbers thing. It’s like, “What’s the cost of waiting?” But we’ll talk about the cost of waiting once we get to module three.
Let’s say you had a year lease and are in month 10. With only two more months to go, breaking your lease and paying whatever fee it is might be worth it. It wouldn’t be too much if only a couple of months left to go, but it’s a numbers thing.
Also, if you are in a lease, start looking for a house a few months beforehand because it could take a while to find a home and go through the closing process. Sometimes, the home seller needs time after closing to move their stuff out, which could take an extra two or three weeks. If you have an additional two or three weeks in your lease on your apartment or a rental house, your offer looks much more substantial.
Life Events and Future Plans
What else could affect the timing? You may need to retire. That was my case — stuck in California until I could retire. Then, I put our house on the market.
The first time we got under contract, something happened, and it fell apart. Then, the second time we went under contract, a couple of days before closing, the buyer bought a brand-new Kirby vacuum cleaner they couldn’t afford on credit. That threw them out, so we had to return our house to the market for the third time. And then that closed, and it worked out fine.
We weren’t looking at a simultaneous close on that case, so it didn’t matter. But there can be things like that that could come up. There could be a life event. Maybe your daughter’s getting married, you want to vote one last time before you move, or you’re very flexible, and that’s pretty nice when that happens.
So, are you thinking long-term about whether you need to buy or sell or not? Do you plan on being in your next home for three years? That’s when it makes sense to move into your home.
I’ve had someone who had bought a house. Six months later, family changes happened, and they had to sell. Despite that, they sold their home for a hundred thousand more than what they bought it for in just six months. That was a crazy time.
That’s not normal, but that’s why we say that the rule of thumb is three years that you want to be in your house. You’re going to be building equity from paying down your loan. You can’t do that until you get into the house or until you buy it.
Also, you’ll be able to take advantage of the appreciation as the home value goes up with inflation. And if you don’t have a house that’s going to be going up with it and you’re just renting, then it’s going to be harder as time goes on to get into a house. For instance, if house prices are going up 6% a year, and you’re making the same or only a 2% raise, it will get harder to come up with that extra money.
Benefits of Equity and Rental Potential
You could transfer your equity to a new home later. If you’re a first-time home buyer, this first home you will buy is a better one. But if it’s a house that works for you, it might be a good idea to go ahead and get into that.
As you take advantage of the inflation and appreciation going up and pay down your balance, you could take the equity you’ve gained there and transfer it over to your next house and then to your next home. And within 10 to 15 years, you’re in that ideal house you’ve always wanted to live in.
It’s funny because people’s ideal house they want to live in for the rest of their lives changes occasionally. Mine certainly has, and yours might as well. Also, it’s quite possible that you could live in the house for a while and then turn it into a rental home as you move to a different one. That could provide some income and more of that familial wealth that can make your family rich, give them something to remember you by.
Realistic Expectations in Home Buying
And are you being realistic in your expectations? That’s where we come back to the wants and the needs. What do you need? What’s the big thing? What’s your big why?
Is it a safer neighborhood? Is it a house that fits the entire family? Things like that. So maybe we can find that six-bedroom house so every kid can have their own room, but it doesn’t have a white picket fence out front or a swimming pool in the backyard. Those things could be added later. If you’re trying to find it all in one go, we can try, but you must keep your expectations in reality. When you do, you’ll find a house that will work just fine for you.
Steps to Homeownership
What are the 10 easy steps to homeownership? So, we only have six modules in our program because we’ve combined some of these. But the first one out the gate is to decide to move. And if you decide you don’t need to move, that’s fine. It’s more of a matter of when you need to move or buy. If it’s not today, it’ll be someday.
Finding the Right Assistance
Finding a real estate agent will be module two. We’re going to have a great discussion about that.
Then, we start to get down to the financing, identify your home’s criteria, go back to the wants and needs, find your home, make an offer a part of the process, etc.
Then, we get you to closing. You can move in and enjoy a lifetime of service with the Treasure Valley Dave team. That means you’re a part of the Treasure Valley Dave family. We are here to help you.
Engaging with the Community
We have all sorts of resources if there’s some project that you want done. We also have a community of other past clients; they’re just the nicest people willing to help others.
We have a closed Facebook group, and you can go in there and interact, whether you need someone to mow your yard or what’s fun to do this weekend. And remember our client appreciation picnic. We have that every year, and it’s a great time.
Relocating and Making the Right Decision
If you’re moving from California or another state, that could be a bonus step 11. And there’s a lot of stuff involved with it. So, it’s essential to make that fact-finding trip.
You can talk with your friends who have visited these places and see what they think. Then, speak with a real estate agent in that new area to find out what the market is like, what you can expect to spend on a home, and what you get for that kind of money.
Wow, deciding to buy is such an important step. Another critical step is to learn more about what a buyer consultation is or what your home is worth. Take advantage of the next vital topic: questions to ask when interviewing agents. If you’d like to watch our on-demand buyer webinar for free, check it out here.