February 27, 2019 • 40 mins
Buying a house will likely be the most expensive purchase you’ll ever make, so it’s no surprise that it can be an intimidating process. But this is the very same reason you should be a well informed buyer- so much money is on the line! Today we’re covering several steps everyone needs to take before purchasing to make sure that you’re getting the best deal possible on a house that you love.
During this episode we enjoyed an Ink Imperial Stout by Rhinegeist Brewery which you can learn all about on Untappd. A special thanks to Natalie and all of our friends at Rhinegeist for donating this beer to the show! And if you enjoyed this episode, be sure to subscribe and give us a quick review in Apple Podcasts, Castbox, or wherever you get your podcasts- we’d love to hear from you.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to How the Money. I'm Joel and I'm Matt,
and today we're discussing what you need to do before
you buy a house, Matt. Before you buy a house,
(00:27):
there are a lot of ducks that you need to
get in a row, and we're gonna put those ducks
in a row with people, uh in just a few minutes.
I'm excited to kind of tackle this topic today. That's right, Joel.
But before we kind of kick things off, we are
in our new dining room space. Kate and I have
renovated our house. We we did in a few episodes
on renovating a few weeks ago. Gosh, we are so
freaking happy to be back in our kitchen, in our
(00:49):
dining room now that we have this sort of connected
space for our family to spend a lot of time in.
And it's nice as well for you and I to
be able to record and not have the instat pot
over my shoulder here, plus all the spices behind you
over there, that whole thing going on. It was easier
to get the beers from the fridge because it was
just an arms length a way when we recorded in
your old dining room slash kitchen. Because everything was mixed
(01:09):
together in one. But but no, this is a nice
new space, and yeah, it looks really nice, and it's
nice to have kind of an upgraded recording studio here
at your dining room table. That's definitely more comfortable and honestly,
and just the utility that Kate and I that we
have been able to get out of it as a family.
We're not even done yet. We still have a punch
list of things that need to be completed before we,
you know, write that final check like we talked about
when it comes to renovating your house. But I realized
(01:31):
how much stress was sort of on us by not
being back here and sort of having our our usual
space and feeling like we're kind of camping out. You know,
we've been camping out for the past three or four
months now while this has all been going on, and
it's nice to be able to resume life and to
pick up what we left off. Yeah, Matt, and there's
some really interesting income producing aspects of your innovation that
we are going to talk about in a future episode.
(01:52):
So we're gonna need some time and some numbers to
come in on that. And uh yeah, so we'll get
to that maybe a few months down the road. But
first I've got a frugal versus cheap for you. I'll
bring it, and that is school lunches. Your daughter and
my daughter, they both go to the same elementary school.
School lunches are four dollars there, and that's for a
nice lunch, right, like if they have an incredible lunch program.
(02:13):
And it's like the nutrition and all the thought that
goes into these meals, Like last time that my wife
was there, like the kids were eating beat salad, which
is amazing, Like I love beats. That's impressive. But the
fact is four dollars is still a lot of money.
And in our family were able to feed each one
of us individually for one dollar per meal, so this
is four times that. And Kate and I we're having
the discussion the other day and we were asking ourselves,
(02:35):
are we withholding a sort of special experience from our
daughter by not allowing her to buy school lunch? Are
we depriving her of this sort of fun thing that
the other kids get to do, Because it's something that
recently she has been sort of mentioning, kind of on
the side a little bit she did she hasn't like
demanded anything, but yeah, what are your thoughts on that? Well,
So we actually let our daughter buy one day a week,
(02:56):
so she buys either Monday's or Fridays, and we usually
picked the meal that we think she's gonna enjoy the
most based on those days. It's one fewer day that
that we have to pack a lunch for, which just
kind of makes it easier to get out the door
in the morning. But for the most part, we're packing
lunches because it's way cheaper. Yeah, well, that's that's where
we are with it. We feel like that it's frugal
because otherwise we're spending four times flasts or twenty bucks
(03:18):
four weeks a month. You're looking at eighty bucks just
for lunches, just for one kid. And I don't know,
part of that is we can't really get around and
like we know our lunches are just as nutritious, But
there's just I guess the fun aspect of it that
we feel we're sort of depriving heavy of a little bit.
And I mean basically, she just wants to be able
to like eat pancakes when they have pancake Day, or
(03:39):
like French toast, right, you know, Yeah, that's definitely the
one you should let her have. And so I didn't
know you guys actually did that. I didn't know you
you did one day a week thing. And I think
we might start looking ahead to the lunch menu and
maybe when there's a day in particular that sounds extra delicious,
maybe we'll start allowing that. You know, it's cool, Matt.
You can actually ask if you have an Amazon Alexa device,
you can ask it to read the cool lunch for
(04:00):
our school. Someone told me that I heard that recently
as well. You know what else you can ask Alexa
to do? Play our podcast, can you really? Yeah, you
can say Alexa, play How to Money and it'll it
will happen. So, by the way, if anyone's listening to
us right now and they have an Alexa in the room,
Alexa probably just played our podcast because I said, alright, Matt,
so real quick, let's tell everybody. The beer we're drinking
on the show today another beer from rhein Geist. Our
(04:23):
friend Natalie, who works at Ryan Guys, sent us a
couple of bottles, and so today on the show, we're
drinking a barrel aged Imperial stout called Ink. And I
was looking at the bottle. Man, I love how they
got this little skull. They've got like a droplet I
assume of little beer dripping down from a barrel. A
little droplet has a little skull designed into it makes
it look hardcore. It's like a mixture of hardcore and Q. Yeah. Yeah,
(04:45):
it's it's so small, it's pretty cute. Yeah. I just
took a sip. This is good and I can't wait
to delve into our full thoughts at the end of
the show. But for now, let's get into the topic
of hand. What to do before you buy a house?
And Matt back in the episode thirty of the show,
we discussed by buying a home is typically a terrible investment.
And so if you're thinking about buying a home, oh man,
(05:05):
this is gonna be a great investment, and this is
gonna be good for me financially over the long haul.
Well that's likely not the case. And if you want
to know more about that, go back and listen to
episode thirty. But for so many of us, buying a
home has large appeal for so many other reasons besides
just being a quote unquote investment. Right, So, how do
you buy a home intelligently? In light of the fact
(05:27):
that buying a home might not necessarily be the smartest
financial decision, but it is a decision that many of
us choose to make for so many other reasons. The
other thing, too, is that it's just such a huge
deal to buy a house, right, Like it's intimidating and
it's a big deal, and it's because it costs a
ton of money. This isn't a purchase that we make
frequently at all. You know, unless you're getting an fh
J loan, you've gotta put down like twenty for down payment,
(05:49):
and that is a huge amount of money. Last year,
the median home prices in the US were over three
thousand dollars, So we're talking at least sixty thou dollars
that you've got to put down, not including as in
costs or anything else associated with a move. And because
this isn't a purchase that we make all the time,
we're just less familiar with the process. Like even if
this was something that we did annually, like home buyers
(06:10):
might feel a little bit more comfortable, But the fact
is that's not the case. And so I'm glad that
this is something that we're tackling. I think we've got
a lot of homebuyers out there, especially a lot of
first time homebuyers, and with us being the Spring, that's
a hot time to buy a house for sure. Yeah,
no doubt. So where do you even begin, right finding
an agent bruising Zillo. Nope, that's definitely not where you
want to start. The first thing you need to do
(06:32):
is take stock of your situation, your personal situation. Buying
is only going to be a decent move if you
plan on living in that home for seven years or longer.
And if you can't make that kind of time commitment,
it's almost always a bad financial move to buy a house.
In that case, you're better off renting or you're gonna
lose money typically when you sell, because of the transaction
(06:52):
costs involved in buying and selling real estate. Sorry, Joe,
this reminds me of episode fifteen, So even further back,
we talked about renting versus buying and if you are
sort of on the fence of whether you should maybe
continue renting or maybe this is time for you to buy.
This is sort of back in the old days when
Joel and I are recording, But go back and listen
to that episode. We we we talked about a lot of
important things that you want to consider when it comes
(07:13):
to renting versus buying a house. And so after the break,
we're specifically going to talk about how you should be
thinking about purchasing a home, like what is the mindset
that you should have, And we're also going to spend
a good amount of time talking about financing because that
is a very important part of buying a house. Game changer.
(07:39):
All right, Joe, let's go ahead and kick this thing off. Man.
You know, if it turns out that you are ready
to go ahead and buy a house, we've got a
solid order of approach that we think that everyone should follow.
First of all, make sure that you're spending a lot
of time thinking about where it is that you want
to live. And especially if you're moving to a new place,
this specific location that you're possibly moving to could make
(08:00):
or break things for you. You know, it could mean
maybe a longer commute for you, or it could mean
a short, simple bike ride. And you can even mean
higher taxes versus lower taxes. You know, if you're in
an area that is maybe more affluence and the home
values are much higher, you're gonna see a bigger tax
bill every single year. Yeah, man, I feel like people
often don't spend enough time on the front end thinking
about the specific location they want to live in. They
(08:22):
maybe draw too big of an outline around where they're
willing to live and they cast in it too wide,
and because of that, they're not focused enough on a
specific neighborhood or location. They don't figure out the specific
place where they do want to live. And especially if
you're moving to a new place and you're planning on
buying right away, if you haven't done your research, you
(08:42):
might end up buying a place where the location just
doesn't work well for you, your family, your commute right.
And renting, well, that's not that big of a deal.
You live there for a year, you move on to
the next place. If you just move on, yeah, But
if you buy something, man, that's a huge pain. The
transaction costs are huge that and that's why we mentioned
before the break living in a place for seven years
(09:02):
potentially that sounds like a long time, and it is
a long time. But the transaction costs are killer in
real estate. It can make or break the home purchase.
Even if your home appreciates over time, you could still
end up having to bring money to the closing table
if you're only in there for three or four or
even five years, which is kind of I guess been
what financial experts traditionally say how long you should be
(09:23):
in a house. So considering that location, spending more time
on the front end, making sure that that location is
exactly where you want to be. It's worth that due
diligence because it could save you a lot of money
in the long run. And the next thing you want
to make sure that you're considering is the size of
the house and the different amenities that you're wanting. You know,
there's a balance between having enough house now and then
(09:43):
looking ahead to your likely needs in the future, like
three hot tubs. I need three hot tubs in the
future need them all. As we recently covered, renovating is
really expensive, So you want to have enough house now. However,
you also don't want to pay tons of money just
to have some extre amenities that you rarely use. Right
If you consider often you use that guest bedroom, where
that guest bath. After doing the math, that could be
(10:05):
the equivalent of paying five hundred to a thousand dollars
a night if you're only using those amenities just a
few times a year. Yeah, so it might be better
for you to be a little more generous and put
up your friend or your family in uh nearby hotel
as opposed to putting them up in your own house,
having a smaller house, which means right lower monthly out
of pocket expenses. It all just really depends on your
(10:28):
situation and what you prioritize. And also now is the
time to start thinking about your credit. You know, if
you kind of have had some things in your credit,
now is when you're gonna want to start having that
cleaned up and making sure that you qualify for the
best rates, because having a credit score a hundred points
lower than what it actually could be could and up
constion you tons of money down the road, and I'm
(10:49):
talking thousands and thousands of dollars if you don't have
to qualify for the best product. Yeah, Matt. On episode ten,
we talked about how to improve your credit score, gave
you kind of some tips and tricks. One thing you're
gonna want to stay away from is anyone who says
pay me money and I'll help you clean up your
credit score. That is a no no, because those people
often are gonna take your money and not help you
very much. But it's definitely of utmost importance to make
(11:11):
sure that your credit score is in tip top shape
because the ultimate terms that you're gonna get from a lender, well,
your credit score is going to be a huge factor
in how good those terms are. And so thinking about
your credit score now and how much you can boost
it by doing some of the things we've talked about
in that episode, that is going to make a huge
difference in the rate that you end up getting and
(11:32):
ultimately what you're out of pocket is every month on
that new home purchase. That's right. Once you've done all
those things, now is the time to start looking around
and seeing if the different things that you value in
a home, if those things fit within your budget, and
if they're realistic. These days, almost all home searches begin
on the internet, right, whether it be through Zillo, which
is my favorite, or Redfin. I like red Finn, do
(11:54):
you really, Yeah, that's my favorite. But even just with
Google stree view, you can see so much of a
house in this rounding area. You know, with satellite view
you can see what green spaces and parks there are
close by by, kind of zooming out a little bit.
There's a lot you can do remotely before even leaving
your house. The only downside, though, is that if you
get your heart set on a certain size home or
part of town that you can't actually afford in right, Like,
(12:15):
so you started looking and you realize that, like, oh wow,
in reality, I can't afford where I want to actually live,
you might be tempted to increase your budget. And so
if you know that that's sort of how you operate,
and if that's you, we would recommend to start with
your budget and then limits your options based on what
you can afford. And we're gonna get to that in
just one second. But I did want to say that everybody,
(12:37):
no matter what your price point is, everybody has kind
of a dream home. Everybody has a thought of the
place that they want to live, and the reality of
the budget never matches up to exactly what we want.
Right those three hot tubs I mentioned, Matt, I didn't
get them. I don't even have one hot tub, and
it's a huge bummer. I'm not gonna lie at one
of these days hot tub. It's in the car day.
(12:59):
But everybody has to make trade offs, and so just
make sure before you start looking super hard and getting
your heart set on things that are budget breakers, that
you've kind of dialed in a dose of realism of
what you can actually afford. And one of the ways
that you can do that is by actually touring some
homes before you're actually in the market to buy, to
do some walkthroughs and see, Okay, if I really want
(13:21):
this kind of house, I might have to move to
a neighborhood that isn't exactly where I wanted to be,
or man, if the neighborhood location is the most important
factor for me, you know what, I might have to
live in a smaller house. And those are the kind
of trade offs that in all likelihood you are going
to have to make. None of us get that exact
perfect dream home that we want, And so touring homes
(13:42):
that are on the market during this phase can be
just kind of really helpful to setting some realistic expectations
before you're even in the market. Rajeel, And again, the
goal here is to initially figure out what your ballpark
figures are of what you can afford. Like you said,
maybe after seeing the costs, you might realize that you
can't actually afford in that area that you want, or
maybe after realizing that you actually need down, you realize
(14:04):
you need to say for another year, Like, that's a
lot of money, and that that's sort of like the
information gathering stage of house purchasing, thinking a lot about it,
seeing what's out there, getting a field for the different
neighborhoods you want to do, all of this before you
actually start taking what we'd call real steps towards purchasing
a home. Okay, real steps though, getting financing right. That's
a huge important step, and I gotta be honest, it's
(14:27):
the step that people usually skip. They usually call on
one lender, maybe two, but often the due diligence and
the research uh that people give to getting financing is
way less than they need to and it ends up
costing them a lot of money. So let's go over that.
A general rule that you should think about when getting
financing for a home is that you should strongly consider
(14:48):
not taking out a loan that is more than three
times your income. And you know what a lender might say, No,
it's totally okay. You qualify for a loan that is
five times your income or sick times your income, Like, no,
you bother you got this, you can make it happen.
It's okay. You know what, don't listen to them. Listening
to your lender as opposed to reason in this case
(15:11):
is a recipe for being house poor, for buying something
that you truly can't afford, and if something unexpected happens,
you might not be able to afford that mortgage payment.
So sticking to that rule of three times your income
as the maximum purchase price for a house makes sense
in our opinion. And another rule of thumb that we've
practiced is that your mortgage payment should not be more
(15:32):
than of your take home pay. I think that might
be a somewhat more lenient view towards towards your home,
and I think that's okay as well, right, Like, it's
okay to have these different rules of thumb. Ask you
how much your your housing costs are, because it kind
of comes down to what you value and what you
want to prioritize. I know, for Kate, and this is
literally a discussion that we've had before. We've said, do
(15:53):
we want to spend more than maybe we should on
our housing? And we've identified the fact that with a
bunch of young kids like we spend a lot of
time at home. We value our time at home, Like
both Kate and I are both homebodies, and so that's
something that we've intentionally pursued and we know that we're
more comfortable spending maybe a little bit more on our
house And that's okay as long as you have proactively
identify that as something that you do want to pursue.
(16:15):
And so whatever your guidelines, you just want to make
sure that you're not spending too much on housing then
you can afford. And for you, in particular, Matt, housing
is also actually you know where you do your work
and so you home office as well. Yeah, so it's
got a dual purpose. I will say though, there was
a stat I saw recently almost fifteen percent of Americans
spend over fifty percent of their income on housing. Jeez,
(16:36):
that's a lot. Yeah, that's an awful place to be.
And so yeah, we just don't want you to be
in a place of weakness when it comes to buying
a home. And if you're in a situation obviously a
mortgage lender typically isn't going to allow you to get
into that kind of space. But you know what, if
you follow what a lender tells you can afford. There's
a good chance that you're going to get into a
position where you can't afford your mortgage with a comfortable
(16:59):
level of say means and investing at the same time.
And that's not the place that we want you to be.
We want you to be in a place of strength
in housing. And if that means you need to look
at buying in a different neighborhood or look at buying
a smaller home, we think that's a trade off you
need to be willing to consider, because being house port
is no fun. Oh, Joel. Also, financing, like, we didn't
really define it, and I think most people know what
(17:21):
financing is, but that's just sort of a fancy term
for how you're going to pay for your house unless
you have cash to buy your home. And if you
do have cash to purchase your home, you probably know
what financing is and you reach spollars. But but yeah, basically,
pretty much everyone is going to be financing their home
and that just means getting alone for the purchase of
that home. And when it comes to getting that financing
(17:42):
or getting that loan for your house, well, credit unions
are a great place to start. So if you're not
a member of a local credit union, we would encourage
you to go join one and make sure you're shopping
rates with the credit union that you're a member of.
Also consider contacting a mortgage broker in your area. They
often have access to a whole slew of lenders and
so they can help you find some of the best
(18:02):
rates available on the market. Ultimately, you're gonna want to
make sure you go with a lender that has experience
and that can close quickly. Lenders that have a solid
reputation that have been doing it for years. You can
just feel a lot more comfortable with that and closing quickly. Well,
that's just going to allow you to take advantage of
some of the best housing deals that you find. And
(18:23):
we mentioned financing and when making sure you have that
lined up before you even seriously start looking at houses,
And that's a big reason why I Joel like you
want to have financing in place. That way, when it
does come time to look at houses, you can pounce.
You can move quickly because in hot real estate markets
where sellers just have tons of buyers coming to them,
they're gonna typically go with whoever can come to them.
The quickest with the best offer, and so you may
(18:46):
not be able to show up with the best offer,
but you can definitely get your foot in the door.
You can have a leg up if you can turn
it around quickly and you've got your ducks all in
a row and real quick as well. Joel, you mentioned
credit unions. This might be helpful for our listeners. But
so credit unions are essentially the same as banks, right
like they they all offer savings and checking accounts and
offer loans whatnot. But credit unions are nonprofit and typically
(19:07):
offer better rates. And then you've got mortgage lenders, and
they typically will be faster and more streamline since they're
only in the business of making loans. Often times they
end up selling your mortgage to a bank, typically to
one of the big ones, and you know the big
bank will be the ones that end up servicing your loan.
And then, Joel, you know you already mentioned brokers, but
they kind of shop around for you and they might
(19:28):
be a great fit for you, in particular if you're
self employed or if you have a unique buying situation.
They're aware of the different products that are out there
and might be able to sort of custom fit something
more to to you and your needs, and and they
get paid either directly by the lender or a lot
of times, uh, their fees are baked directly into your rate.
I know, for like Kate and I specifically, we maybe
(19:49):
should have considered a broker early on, like when we
got our first house, because we had only been in
business for one year and because of that, we got
stuck with a terrible adjustable rate mortgage that we had
to refinance just a few years later, and that costs
a lot of money. Yeah, So if you don't have
a credit union and you're in the market for a house,
will go to n c U. A will put a
link to that in the show notes. That's gonna be
(20:11):
the website where you can find a local credit union
in your area. And so be sure to shop shop Shop.
You're gonna want to get three to five quotes minimum.
So many people Matt, like I mentioned quickly earlier, skip
this step, and you know what, it ends up costing
them thousands, if not potentially tens of thousands of dollars
over the long run. And it's not usually the closing
(20:32):
costs that are the biggest difference, although that can be
you know, a few thousand dollars even in difference between
different lenders. Often it's gonna be that slight difference in
interest rate combined with those closing costs that can cost
you tens of thousands of dollars depending on the price
of your home. So you're gonna want to make sure
you get a couple quotes from credit unions, a mortgage broker, involved,
a local lender, and online lender, Like, you're gonna want
(20:54):
to kind of run the gamut. You're gonna want to
get a lot of quotes so that you can bring
them to the table, look at the apples to poles
comparisons and go with the lender that has the best
overall package for you. Yeah, and the actual document man
that you're gonna want to use to compare those apples
to apples is the loan estimate documents. It's gonna have
your points on there, your interest rate, your closing costs,
(21:15):
just everything that you're gonna want to take into account
when it comes to shopping the different lenders. And Matt
just mentioned getting an adjustable rate mortgage when he bought
his first house, we would highly advise against getting an
adjustable rate mortgage. Had they suck. Yeah, that can lead
to a lot of problems down the road. And so
the thirty year fixed is kind of the standard in lending.
That's kind of what most lenders are going to steer
(21:38):
you towards, and it's also one of the best products
on the market. But you should challenge yourself to consider
a fifteen year or a twenty year mortgage if your
lender offers it, and almost every lender offers at least
a fifteen year. If you can barely afford the thirty
year payment, though, you should really question whether or not
you can afford the home. It's worth looking at the
fifteen and twenty year mortgage options to see if one
(21:59):
of the can fit in your life. If they can,
you're gonna get a lower interest rate, and you're going
to obviously be paying on your loan for a lot
less years. The trade off is that you'll be paying
more every month towards the price of your house. But
if you can't make a fifteen or twenty year mortgage
work for you, a thirty year mortgage is a great
way to go. Just make sure that you can easily
afford that thirty year mortgage payment in your monthly budget.
(22:22):
Yea man. The reason for that is because you just
want to have margin in your life. When you own
a home, there are a lot of things that can
go wrong. There's a roof, there's electrical there's furnaces, there's
just all sorts of systems and plus a lot of
times you just want to spend money on your house.
Typically homes are maybe a little bit larger than the
space that you've been renting, and so there are just
(22:42):
other expenses that you want to make sure that you're
easily able to pay. And if the monthly mortgage payment
is equivalent to what you're paying in rent depending on
your income, that's potentially a red alert because when you
were renting, you weren't having to pay for any sort
of upkeep, and on our new home, guess what upkeep
is your responsibility. So unless you could easily afford them
(23:03):
out that you were paying in rent, you're gonna want
to find a house that provides you with a monthly
mortgage payment that actually comes in at less than what
you're paying in rent. And as far as upkeep and maintenance,
jool like most experts say to expect to pay one
percent of the cost of your home. And so you know,
earlier I mentioned that the median price of homes in
(23:24):
the in the United States last year was over three
hundred thousand. That means you're looking at spending three thousand
dollars additional every year just to maintain your home. And
while we're on the topic of percentages, make sure that
you have enough for down payment. You know, if you
don't have at least five percent down you probably shouldn't
be shopping around for a home is best you're gonna
be able to get the best rates. There are some
(23:46):
products out there that allow you to put down less.
You're looking at three and a half percent for an
f h A loan, for a v A loan, even
zero percent. The fact is those don't put you in
a strong position. Doesn't put you in a strong position
when it comes to the equity that you have in
the home, but also when it comes to trying to
purchase that home and make offers, those products just don't
look quite as strong. And we'll get more into that
(24:06):
next week. Actually, yeah, Matt, and I think if you're
bringing less down payment to the table, you need to
actually be willing to stay in the home even longer.
Forget seven years, how about ten right or the rest
of your life? Right? No, but seriously, because if you're
putting down on a home and you stay there for
five years, the chances of you selling your home and
going to the closing table and having to write a
(24:27):
check are are highly unlikely. But if you buy a
house with zero percent down with the v A loan
or three and a half percent down with an f
h A loan, and you're only there for four or
five years, the chances of you having to write a
check at the closing table, well they're pretty high, and
you might not have the money to cover it. And
so if you are going to come to the table
with less money down, which I don't think it's the
end of the world. Necessarily, it helps get a lot
(24:49):
of people in a home that they really want. Just
consider how long are you going to be in the home,
and you might need to just extend that timeline in
order to make it work. Yeah, So we're gonna talk
specifically about the different fee ease and costs associated with
purchasing a house next week. But right after the break,
we're gonna cover your new best friend who's gonna save
you tons of money your realtor. M all right, Matt,
(25:17):
let's talk realtors. It turns out most people find a
realtor from their cousins, best friend or Facebook or something
like that, right, And that's just not the best way
to find a realtor in your area. And I said
in your area, because it's really important to find someone
who specializes in the neighborhood or town where you live.
An agent with experience and connections is priceless. They know
(25:39):
the ropes, they know the system, they know the people.
And so one way to find that right agent is
looking at for sale signs of homes that are for
sale in your target area. If you see the same
agent on lots of them, that's a great agent to
consider asking to represent you in the home buying process.
The same thing applies when you're looking at listings online.
If you see that same name popping up over and
(26:00):
over at homes that you're interested in, they're probably a
great choice to be your representative agent as a buyer. Yeah,
you know, man, When you have a great realtor who
is focused and specialized in a specific area, there's a
good chance they'll know of deals even before they even
hit MLS and before they go public, there is a
chance that you can get a really great deal. Yeah.
Those are called pocket listings. And by the way, you
(26:22):
just mentioned MLS, that's the Multiple Listing Service and that's
where pretty much everybody who wants to sell a house
list their home. If you're for sale by owner, it's
harder to get your home on the MLS. But the
MLS that's like the holy Grail. You have to have
your home on there in order to get maximum exposure
to all the buyers that you want to potentially reach.
It's like Apple Podcasts for podcasts. Right. If your podcast
(26:43):
ain't there, ain't nobody listening, right. But also keep in
mind too that the Internet is honestly changing what it
looks like to go and look at homes with your realtor,
like it used to be back in the day that
your realtor would send you maybe six or seven, you know,
homes that they've handpicked, and you get to go and
you tour them and you decide is this one gonna
be nice? Maybe it will, maybe it won't. But it
was kind of time consuming, kind of old school. Did
(27:05):
you do that with your first house? Oh? Yeah, okay,
there was a lot of Saturday driving around with my realtor,
which is fascinating because now I feel like so much
of the process is shouldered by the buyer. Yeah, which
is good though, I think because it's completely Yeah, it's
more efficient, and because there are tools out there now
that allow the buyers to have more autonomy to search
(27:26):
and to make their own filters and to create their
own criteria to find the home themselves. And what that
means though, is that you plan to meet at the
house with your realtor, but you don't have to drive
around in their car while, you know, making awkward conversations. Yeah.
And so you mentioned that sometimes realtors who specialized in
the neighborhood might have access to what are called pocket listings,
and that means that they hear about something that's going
(27:48):
to come up for sale or something that's just kind
of on the d L there on the inside, and
they know what's coming up. And so it's good to
have an agent who is connected, who's well connected, and
who has access to pocket listings like that. So, for example, Matt,
I've got a real estate agent. She's the best. Typically
I'm searching on my own on the MLS for properties
(28:08):
that interests me. But if a pocket listing comes up
that she hears about that fits my parameters, she knows
what I'm looking for, she will send it to me
and she'll say, hey, I know that you're in the
market for this kind of property. Does this interest you.
This is coming up on the market in a couple
of weeks, and I know about it ahead of time,
so we can get in ahead of other potential buyers
by being quick and jumping on it now. And so
(28:30):
that's one of the benefits that having an experienced agent
can offer you. In addition, I feel like an experienced
agent helps you with the negotiation process. And I know
that potential homebuyers might be a little more apprehensive to
a realtor taking kind of a bite out of the
pie taking a percentage fee. And we'll talk about this
more next week. But having a great agent is similar
(28:51):
to having a great lawyer in a court of law.
They're going to help you in the negotiation process. And
in all honesty, I've had great agents that have saved
me more than the fee that they're taking. So don't
cheap out on an agent. Find a good one. And
we've already mentioned Zillo, right that's my favorite, Joel, you
mentioned Redfinn, how that's your favorite. They are amazing tools,
and they allow homebuyers to do a ton of research
(29:12):
on their own. It allows them to really get to
know a neighborhood and familiarize themselves with what an area
has to offer. However, don't neglect to actually go visit
and go drive around the streets in person. There's so
much that you can gather from just being there as
a human being. Yeah, and you're gonna want to drive
those streets not only during the day, but at night too,
because some neighborhoods, I don't know where you live, but
(29:34):
but where we live, neighborhoods can change from day to evening,
and so driving by at different times of day can
help you get a better feel for the neighborhood. And
not only different times during the day as well, man,
but just on the weekends too. So by checking it
out on the weekend as well, just drive by and
see what's going on over there. That's an awesome way
to get a feel for the community. And you can
also do something that I like to call the wave test,
(29:56):
which is when you're driving around in an area that
you're scoping out, you know, have your window down hopefully
it's not too bitterly cold. And then when you see
someone kind of walking on the street or hanging out
on the front porch, just wave at them. What you
get to do is you get to see how friendly
they are and if they just kind of stare at
you and glare well, I don't know, maybe this isn't
the best street, or or maybe they're just having a
bad day. I don't know. Is there like a percentage
(30:17):
of waivers that you're looking for in a neighborhood to
determine whether it's worth buying a house in or not.
Like in general, I am looking for folks that are
just happy to see me. Right, Like if everyone that
you wave two just stares at you and they're wondering
why it is that you're waving at them, It's like,
I don't know, I want to live somewhere that's friendlier.
I want to live on a friendly street, And for
me personally, that's something I value. I like it. The
(30:38):
wave test. Yeah, another important thing to do, Matt. Not
only perusing Zillo and redfin right, more weeks and months
you spend on those sites, perusing homes and neighborhoods. It's
it's gonna help you. But it's also important for people
to take a look at a lot of homes in person,
especially for first time homebuyers. This is the largest purchase
you're gonna make potentially in your life. So do the research,
(30:59):
and not only the online research, but the more homes
that you see in person, you're gonna start to see
the corks the different homes present. If you look at
three homes before you make an offer, you're just in
a much inferior position to someone who's looked at fifty
homes before they make an offer. You just have a
whole lot more idea of what you're getting into if
you've looked at a much larger percentage of homes. Yeah, Joe,
(31:21):
I love that you said first time home buyers as well,
because I know for Kate and I as first time
home buyers, it took us a while to figure out
what it was exactly that we were looking for, Like
it took us looking at ten houses before we realized that, like, oh,
we're looking for a bungalow, We're looking for a front porch,
Like that's the kind of home, that's the kind of
vibe that we're looking for, and because we have never
owned a home, we didn't quite know how to verbalize
(31:43):
that to our realtor. And she didn't know because she's
just like, well, this is how much she said you
could spend, and this is these are the areas that
I know you can afford it. I fitted in your parameters.
I don't understand. But what we didn't realize was that, oh,
we're looking for a front porch, and typically bungalows have
a front porch, and typically you can find in these
nineties bungalows in these types of neighborhoods. For first time
(32:03):
home buyers, it's I think it's really important to look
at as many homes as possible. And also when you're
looking at these different homes, make sure you're taking lots
of pictures, especially of sort of like the weird things, right,
the different quirks, the things that aren't in the pictures
of the listings, because the listing photos they look really
good because they're taken by a professional real estate photographer
(32:25):
and they're made to make that house look as large
as possible, uh, while excluding all the different oddities. And
so by taking pictures and even jotting down a few
notes will help you to remember these different homes, and
that might also help you to remember the different feelings
that you had when you went into these homes, because
you know, if you're looking at maybe three or four,
maybe five homes in a row, a lot of times
(32:45):
they can kind of blur together. And sure you can
go back and look at the pictures, but having some
additional photos on your phone is an awesome way to
sort of document the weirdness of that particular house. Yeah, Matt,
speaking of quirky things, I think, especially a lot of
first time HomeBuyer, but homebuyers in general, they kind of
want that fully put together home, right, and the fully
(33:06):
put together home can have a couple of issues with it. One,
it can be prohibitively expensive to have the home that
has like granite countertops and everything is completely finished properly.
And the other thing is maybe it can look slick
on the outside, but beneath nothing's really been replaced. There's
old electrical, there's old plumbing, and so it can look
good to the naked eye, but down deep, that house
(33:27):
has a lot of potential issues with it. And so, yeah,
do you have thoughts on what people should be looking
for when they're buying a house, when it comes to
finishes and curb appeal. Yeah, well, I mean in regards
to like the specific systems, right Like, we're gonna talk
a lot about that. Next week. We're gonna talk about inspections.
We're gonna talk about the specific steps that you want
to say when it comes to actually purchasing a home,
the things that you can't see. But I want to
(33:49):
encourage folks to not be afraid to look at ugly houses.
Like you said, a lot of times we're sort of
turned off by just weird things, Like you walk into
a house and you think, oh, it doesn't smell like yeah,
one it to smell, or like there's weird art on
the walls. But those are all things that you can change.
Paint color, even a chandelier in the dining room, like,
these are things that are easily modified that you can
(34:10):
quickly change to make that home feel more like your
own home. And so I mean, I just want to
encourage folks to not be afraid to purchase a home
that might feel a little ugly, but it's got the amenities,
it's got the room count, and it's got the number
of bathrooms that you're looking for, or it's in the
right area that you're looking at. You want to make
sure that the crucial, like the most important things are
taken care of. Don't be turned off by, Oh, they've
(34:32):
got weird pendance over their bar I would never put
those in my house. Well, it doesn't matter, you can
swap those out. I see. First time homebuyers would have
fall into this line of thinking, right, and it keeps
them from purchasing a home that they could really get
a deal on and then spend a couple hundred bucks
on after the fact and truly make their own and
just maybe a couple of weekends worth of work. Yeah,
if you're looking at wood paneling or old cabinets with
(34:54):
old hardware, those are the kind of things that you
can quickly change for almost no money. But those are
the kind of things that so many homebuyers ride a
house off because of even though it is a solid
home in the place where they want to live, they say, Matt, Nope,
it's antiquated, it doesn't fit my style needs. I think
it's really good advice, Matt. That's something you want to
avoid judging house purely based on because there are so
(35:17):
many other intangibles. Maybe dealing with those things and being
able to fix those little things up over time can
help you get into the size house that you want
in a neighborhood that you like, and then make that
house your own over time. Plus you mentioned wood paneling.
It all comes around. Dog. I feel like wood paneling
is hot. That's true. That's true. Man. When we bought
our house, it has the original wood molding from the
(35:38):
nineteen twenties. Yeah, the trim around your door. But yeah,
that like the crown molding and all that. Yeah. Yeah,
so there it's all unpainted, original wood molding, original stain.
It's amazing. It's hard to find, right. And I remember
walking you with my wife and she said, well, maybe
if we painted this white would be a little bit better.
And I was like, no, no, no, we can't do that.
We can't do that. This is original. I mean, this
(35:58):
is a hundred years worth of age on this beautiful trim.
No one's painted it yet. We can't be the ones
to do that. We're not going to touch that patina. Yeah,
until we grew into it and we love it. I
mean I loved it from the get go, but we've
really grown into it. And that's just the kind of
thing that once you've lived in the house for a
matter of months, that stuff just doesn't bother you like
it did when you walked in there the first time.
(36:19):
Your eyes are tuned to every single detail as a
first time HomeBuyer, especially walking through a home, and you
know what, you can change little things over time, and
also some of those things that bothered you maybe upon
first walk through start that big of a deal as
you grow into the home. Let's go ahead now and
take us back to the beer. We've got Ryan Geist
Brewery and today we're drinking ink, which sounds weird to say,
(36:42):
but this is an Imperial stout aged and bourbon barrels.
This beer, to me, Matt, felt like a quintessential stout.
None of the flavors necessarily stuck out in a major way.
Nothing was off putting. It was just amazingly nice, pleasant
bourbon barrel aged out. If anything stuck out in my
mind just a little bit, there is a little bit
of kind of light fruitiness, almost like Belgian quad or
(37:04):
something like that. Oh yeah, dude, kind of mixed in
like get you if you're fine tasting notes. You know,
I'm thinking about becoming a SMaL Ya. Maybe in my
next life, we'll see, but yeah, this was super delicious.
I thoroughly enjoyed it. Nice man, I am with you.
This was an incredibly well balanced beer. You know, when
you think of like the classic or the quintessential college experience,
and you think of, you know, the perfect college town
(37:26):
and you've got the sports, and you've got the academics,
and it kind of has it all. And that's when
I feel about this beer. When it comes to a
bourbon barrel Aged Doubt, it's sort of quintessential. It's got
everything you want. It's got the barrel, it's got the
dark flavors, it's got a cool name, inc It's got
everything you think of when you want to have a dark, boozy,
bourbon barrel Aged Doubt. And I'm incredibly thankful that our
(37:47):
friends over at Ryan Guy sent this our way. We're
looking forward to, hopefully someday visiting that sweet tasting room
that we mentioned last episode. Just this amazing industrial space.
And that's one of the things I love about breweries
is how they're sort of reclaiming these old, massive spaces
that have been neglected and turning them back into spaces
that people can enjoy and serve amazing craft beer in
(38:08):
all Right, Matt, onto our final thoughts. What to do
before you buy a house? Well, just remember house does
cost a lot of money, and any time that you
can spend researching and familiarizing yourself on the front end
will prevent you from making an ill advised decision buying
a bigger house than you need, buying a house that
you're unwilling to stay in for seven years or longer.
Don't be afraid to spend more time before you buy
(38:30):
in order to ensure that you're making the right decision. Also,
now is the time to clean up your credit. You
want to make sure you have things in order before
it comes time to applying for your mortgage. It takes
time to straighten now your credit, so make sure you
go ahead and get started on that well before you
start shopping and putting offers on houses. Yeah, a good
credit score can make a huge difference in the rate
(38:51):
that you end up getting offered, which has a specific
correlation to the out of pocket costs of your mortgage
every month, And in regards to that getting financing, be
sure to shop, shop shop. You want to make sure
you get three to five quotes minimum. Most people skip
this step. They go with one lender and it ends
up costing them thousands of dollars. Getting multiple loan estimates
that you can compare against each other will save you
(39:13):
lots of money. And also, don't underestimate the importance of
a great neighborhood agent who's familiar with your area. And
while you're looking at different houses, keep in mind you
want to look at a ton of houses, especially if
you're a first time HomeBuyer, and don't forget the wave
test and to see how maybe receptive the community might
be to you. And also don't be distracted by weird furnishings.
(39:33):
You know, a house with less curb appeal could be
an incredible deal for you. Alright, Matt, this episode has
been about before you buy a house. Next week we're
gonna get into I'm ready to buy a house? What
do I do? All right? And so we're gonna get
into all those specifics a week from today. So make
sure you check out next week's episode for more details
on what's next in the process. And so everyone, thank
(39:54):
you all for listening. We really appreciate it's we'll have
our show notes up for you on our website how
some money dot com. And also if you have some
feedback for us. If if you feel like that we
have left some things out or that we have some
room for improving, go to how to money dot com,
forward slash do Better and there you'll be able to
send us a note and we would love to hear
your feedback. We're always trying to improve and make sure
(40:16):
that we're doing things well, so we'd appreciate it if
you shot us a message. Yeah, and if you like
the show and you found it helpful, we'd appreciate it
if you would consider leaving a review on Apple Podcasts.
And also if you dig it, hit the subscribe button
while you're there. Joel, Until next time, Best Friends Out,
Best Friends Out,
Welcome to How the Money. I'm Joel and I'm Matt,
and today we're discussing what you need to do before
you buy a house, Matt. Before you buy a house,
(00:27):
there are a lot of ducks that you need to
get in a row, and we're gonna put those ducks
in a row with people, uh in just a few minutes.
I'm excited to kind of tackle this topic today. That's right, Joel.
But before we kind of kick things off, we are
in our new dining room space. Kate and I have
renovated our house. We we did in a few episodes
on renovating a few weeks ago. Gosh, we are so
freaking happy to be back in our kitchen, in our
(00:49):
dining room now that we have this sort of connected
space for our family to spend a lot of time in.
And it's nice as well for you and I to
be able to record and not have the instat pot
over my shoulder here, plus all the spices behind you
over there, that whole thing going on. It was easier
to get the beers from the fridge because it was
just an arms length a way when we recorded in
your old dining room slash kitchen. Because everything was mixed
(01:09):
together in one. But but no, this is a nice
new space, and yeah, it looks really nice, and it's
nice to have kind of an upgraded recording studio here
at your dining room table. That's definitely more comfortable and honestly,
and just the utility that Kate and I that we
have been able to get out of it as a family.
We're not even done yet. We still have a punch
list of things that need to be completed before we,
you know, write that final check like we talked about
when it comes to renovating your house. But I realized
(01:31):
how much stress was sort of on us by not
being back here and sort of having our our usual
space and feeling like we're kind of camping out. You know,
we've been camping out for the past three or four
months now while this has all been going on, and
it's nice to be able to resume life and to
pick up what we left off. Yeah, Matt, and there's
some really interesting income producing aspects of your innovation that
we are going to talk about in a future episode.
(01:52):
So we're gonna need some time and some numbers to
come in on that. And uh yeah, so we'll get
to that maybe a few months down the road. But
first I've got a frugal versus cheap for you. I'll
bring it, and that is school lunches. Your daughter and
my daughter, they both go to the same elementary school.
School lunches are four dollars there, and that's for a
nice lunch, right, like if they have an incredible lunch program.
(02:13):
And it's like the nutrition and all the thought that
goes into these meals, Like last time that my wife
was there, like the kids were eating beat salad, which
is amazing, Like I love beats. That's impressive. But the
fact is four dollars is still a lot of money.
And in our family were able to feed each one
of us individually for one dollar per meal, so this
is four times that. And Kate and I we're having
the discussion the other day and we were asking ourselves,
(02:35):
are we withholding a sort of special experience from our
daughter by not allowing her to buy school lunch? Are
we depriving her of this sort of fun thing that
the other kids get to do, Because it's something that
recently she has been sort of mentioning, kind of on
the side a little bit she did she hasn't like
demanded anything, but yeah, what are your thoughts on that? Well,
So we actually let our daughter buy one day a week,
(02:56):
so she buys either Monday's or Fridays, and we usually
picked the meal that we think she's gonna enjoy the
most based on those days. It's one fewer day that
that we have to pack a lunch for, which just
kind of makes it easier to get out the door
in the morning. But for the most part, we're packing
lunches because it's way cheaper. Yeah, well, that's that's where
we are with it. We feel like that it's frugal
because otherwise we're spending four times flasts or twenty bucks
(03:18):
four weeks a month. You're looking at eighty bucks just
for lunches, just for one kid. And I don't know,
part of that is we can't really get around and
like we know our lunches are just as nutritious, But
there's just I guess the fun aspect of it that
we feel we're sort of depriving heavy of a little bit.
And I mean basically, she just wants to be able
to like eat pancakes when they have pancake Day, or
(03:39):
like French toast, right, you know, Yeah, that's definitely the
one you should let her have. And so I didn't
know you guys actually did that. I didn't know you
you did one day a week thing. And I think
we might start looking ahead to the lunch menu and
maybe when there's a day in particular that sounds extra delicious,
maybe we'll start allowing that. You know, it's cool, Matt.
You can actually ask if you have an Amazon Alexa device,
you can ask it to read the cool lunch for
(04:00):
our school. Someone told me that I heard that recently
as well. You know what else you can ask Alexa
to do? Play our podcast, can you really? Yeah, you
can say Alexa, play How to Money and it'll it
will happen. So, by the way, if anyone's listening to
us right now and they have an Alexa in the room,
Alexa probably just played our podcast because I said, alright, Matt,
so real quick, let's tell everybody. The beer we're drinking
on the show today another beer from rhein Geist. Our
(04:23):
friend Natalie, who works at Ryan Guys, sent us a
couple of bottles, and so today on the show, we're
drinking a barrel aged Imperial stout called Ink. And I
was looking at the bottle. Man, I love how they
got this little skull. They've got like a droplet I
assume of little beer dripping down from a barrel. A
little droplet has a little skull designed into it makes
it look hardcore. It's like a mixture of hardcore and Q. Yeah. Yeah,
(04:45):
it's it's so small, it's pretty cute. Yeah. I just
took a sip. This is good and I can't wait
to delve into our full thoughts at the end of
the show. But for now, let's get into the topic
of hand. What to do before you buy a house?
And Matt back in the episode thirty of the show,
we discussed by buying a home is typically a terrible investment.
And so if you're thinking about buying a home, oh man,
(05:05):
this is gonna be a great investment, and this is
gonna be good for me financially over the long haul.
Well that's likely not the case. And if you want
to know more about that, go back and listen to
episode thirty. But for so many of us, buying a
home has large appeal for so many other reasons besides
just being a quote unquote investment. Right, So, how do
you buy a home intelligently? In light of the fact
(05:27):
that buying a home might not necessarily be the smartest
financial decision, but it is a decision that many of
us choose to make for so many other reasons. The
other thing, too, is that it's just such a huge
deal to buy a house, right, Like it's intimidating and
it's a big deal, and it's because it costs a
ton of money. This isn't a purchase that we make
frequently at all. You know, unless you're getting an fh
J loan, you've gotta put down like twenty for down payment,
(05:49):
and that is a huge amount of money. Last year,
the median home prices in the US were over three
thousand dollars, So we're talking at least sixty thou dollars
that you've got to put down, not including as in
costs or anything else associated with a move. And because
this isn't a purchase that we make all the time,
we're just less familiar with the process. Like even if
this was something that we did annually, like home buyers
(06:10):
might feel a little bit more comfortable, But the fact
is that's not the case. And so I'm glad that
this is something that we're tackling. I think we've got
a lot of homebuyers out there, especially a lot of
first time homebuyers, and with us being the Spring, that's
a hot time to buy a house for sure. Yeah,
no doubt. So where do you even begin, right finding
an agent bruising Zillo. Nope, that's definitely not where you
want to start. The first thing you need to do
(06:32):
is take stock of your situation, your personal situation. Buying
is only going to be a decent move if you
plan on living in that home for seven years or longer.
And if you can't make that kind of time commitment,
it's almost always a bad financial move to buy a house.
In that case, you're better off renting or you're gonna
lose money typically when you sell, because of the transaction
(06:52):
costs involved in buying and selling real estate. Sorry, Joe,
this reminds me of episode fifteen, So even further back,
we talked about renting versus buying and if you are
sort of on the fence of whether you should maybe
continue renting or maybe this is time for you to buy.
This is sort of back in the old days when
Joel and I are recording, But go back and listen
to that episode. We we we talked about a lot of
important things that you want to consider when it comes
(07:13):
to renting versus buying a house. And so after the break,
we're specifically going to talk about how you should be
thinking about purchasing a home, like what is the mindset
that you should have, And we're also going to spend
a good amount of time talking about financing because that
is a very important part of buying a house. Game changer.
(07:39):
All right, Joe, let's go ahead and kick this thing off. Man.
You know, if it turns out that you are ready
to go ahead and buy a house, we've got a
solid order of approach that we think that everyone should follow.
First of all, make sure that you're spending a lot
of time thinking about where it is that you want
to live. And especially if you're moving to a new place,
this specific location that you're possibly moving to could make
(08:00):
or break things for you. You know, it could mean
maybe a longer commute for you, or it could mean
a short, simple bike ride. And you can even mean
higher taxes versus lower taxes. You know, if you're in
an area that is maybe more affluence and the home
values are much higher, you're gonna see a bigger tax
bill every single year. Yeah, man, I feel like people
often don't spend enough time on the front end thinking
about the specific location they want to live in. They
(08:22):
maybe draw too big of an outline around where they're
willing to live and they cast in it too wide,
and because of that, they're not focused enough on a
specific neighborhood or location. They don't figure out the specific
place where they do want to live. And especially if
you're moving to a new place and you're planning on
buying right away, if you haven't done your research, you
(08:42):
might end up buying a place where the location just
doesn't work well for you, your family, your commute right.
And renting, well, that's not that big of a deal.
You live there for a year, you move on to
the next place. If you just move on, yeah, But
if you buy something, man, that's a huge pain. The
transaction costs are huge that and that's why we mentioned
before the break living in a place for seven years
(09:02):
potentially that sounds like a long time, and it is
a long time. But the transaction costs are killer in
real estate. It can make or break the home purchase.
Even if your home appreciates over time, you could still
end up having to bring money to the closing table
if you're only in there for three or four or
even five years, which is kind of I guess been
what financial experts traditionally say how long you should be
(09:23):
in a house. So considering that location, spending more time
on the front end, making sure that that location is
exactly where you want to be. It's worth that due
diligence because it could save you a lot of money
in the long run. And the next thing you want
to make sure that you're considering is the size of
the house and the different amenities that you're wanting. You know,
there's a balance between having enough house now and then
(09:43):
looking ahead to your likely needs in the future, like
three hot tubs. I need three hot tubs in the
future need them all. As we recently covered, renovating is
really expensive, So you want to have enough house now. However,
you also don't want to pay tons of money just
to have some extre amenities that you rarely use. Right
If you consider often you use that guest bedroom, where
that guest bath. After doing the math, that could be
(10:05):
the equivalent of paying five hundred to a thousand dollars
a night if you're only using those amenities just a
few times a year. Yeah, so it might be better
for you to be a little more generous and put
up your friend or your family in uh nearby hotel
as opposed to putting them up in your own house,
having a smaller house, which means right lower monthly out
of pocket expenses. It all just really depends on your
(10:28):
situation and what you prioritize. And also now is the
time to start thinking about your credit. You know, if
you kind of have had some things in your credit,
now is when you're gonna want to start having that
cleaned up and making sure that you qualify for the
best rates, because having a credit score a hundred points
lower than what it actually could be could and up
constion you tons of money down the road, and I'm
(10:49):
talking thousands and thousands of dollars if you don't have
to qualify for the best product. Yeah, Matt. On episode ten,
we talked about how to improve your credit score, gave
you kind of some tips and tricks. One thing you're
gonna want to stay away from is anyone who says
pay me money and I'll help you clean up your
credit score. That is a no no, because those people
often are gonna take your money and not help you
very much. But it's definitely of utmost importance to make
(11:11):
sure that your credit score is in tip top shape
because the ultimate terms that you're gonna get from a lender, well,
your credit score is going to be a huge factor
in how good those terms are. And so thinking about
your credit score now and how much you can boost
it by doing some of the things we've talked about
in that episode, that is going to make a huge
difference in the rate that you end up getting and
(11:32):
ultimately what you're out of pocket is every month on
that new home purchase. That's right. Once you've done all
those things, now is the time to start looking around
and seeing if the different things that you value in
a home, if those things fit within your budget, and
if they're realistic. These days, almost all home searches begin
on the internet, right, whether it be through Zillo, which
is my favorite, or Redfin. I like red Finn, do
(11:54):
you really, Yeah, that's my favorite. But even just with
Google stree view, you can see so much of a
house in this rounding area. You know, with satellite view
you can see what green spaces and parks there are
close by by, kind of zooming out a little bit.
There's a lot you can do remotely before even leaving
your house. The only downside, though, is that if you
get your heart set on a certain size home or
part of town that you can't actually afford in right, Like,
(12:15):
so you started looking and you realize that, like, oh wow,
in reality, I can't afford where I want to actually live,
you might be tempted to increase your budget. And so
if you know that that's sort of how you operate,
and if that's you, we would recommend to start with
your budget and then limits your options based on what
you can afford. And we're gonna get to that in
just one second. But I did want to say that everybody,
(12:37):
no matter what your price point is, everybody has kind
of a dream home. Everybody has a thought of the
place that they want to live, and the reality of
the budget never matches up to exactly what we want.
Right those three hot tubs I mentioned, Matt, I didn't
get them. I don't even have one hot tub, and
it's a huge bummer. I'm not gonna lie at one
of these days hot tub. It's in the car day.
(12:59):
But everybody has to make trade offs, and so just
make sure before you start looking super hard and getting
your heart set on things that are budget breakers, that
you've kind of dialed in a dose of realism of
what you can actually afford. And one of the ways
that you can do that is by actually touring some
homes before you're actually in the market to buy, to
do some walkthroughs and see, Okay, if I really want
(13:21):
this kind of house, I might have to move to
a neighborhood that isn't exactly where I wanted to be,
or man, if the neighborhood location is the most important
factor for me, you know what, I might have to
live in a smaller house. And those are the kind
of trade offs that in all likelihood you are going
to have to make. None of us get that exact
perfect dream home that we want, And so touring homes
(13:42):
that are on the market during this phase can be
just kind of really helpful to setting some realistic expectations
before you're even in the market. Rajeel, And again, the
goal here is to initially figure out what your ballpark
figures are of what you can afford. Like you said,
maybe after seeing the costs, you might realize that you
can't actually afford in that area that you want, or
maybe after realizing that you actually need down, you realize
(14:04):
you need to say for another year, Like, that's a
lot of money, and that that's sort of like the
information gathering stage of house purchasing, thinking a lot about it,
seeing what's out there, getting a field for the different
neighborhoods you want to do, all of this before you
actually start taking what we'd call real steps towards purchasing
a home. Okay, real steps though, getting financing right. That's
a huge important step, and I gotta be honest, it's
(14:27):
the step that people usually skip. They usually call on
one lender, maybe two, but often the due diligence and
the research uh that people give to getting financing is
way less than they need to and it ends up
costing them a lot of money. So let's go over that.
A general rule that you should think about when getting
financing for a home is that you should strongly consider
(14:48):
not taking out a loan that is more than three
times your income. And you know what a lender might say, No,
it's totally okay. You qualify for a loan that is
five times your income or sick times your income, Like, no,
you bother you got this, you can make it happen.
It's okay. You know what, don't listen to them. Listening
to your lender as opposed to reason in this case
(15:11):
is a recipe for being house poor, for buying something
that you truly can't afford, and if something unexpected happens,
you might not be able to afford that mortgage payment.
So sticking to that rule of three times your income
as the maximum purchase price for a house makes sense
in our opinion. And another rule of thumb that we've
practiced is that your mortgage payment should not be more
(15:32):
than of your take home pay. I think that might
be a somewhat more lenient view towards towards your home,
and I think that's okay as well, right, Like, it's
okay to have these different rules of thumb. Ask you
how much your your housing costs are, because it kind
of comes down to what you value and what you
want to prioritize. I know, for Kate, and this is
literally a discussion that we've had before. We've said, do
(15:53):
we want to spend more than maybe we should on
our housing? And we've identified the fact that with a
bunch of young kids like we spend a lot of
time at home. We value our time at home, Like
both Kate and I are both homebodies, and so that's
something that we've intentionally pursued and we know that we're
more comfortable spending maybe a little bit more on our
house And that's okay as long as you have proactively
identify that as something that you do want to pursue.
(16:15):
And so whatever your guidelines, you just want to make
sure that you're not spending too much on housing then
you can afford. And for you, in particular, Matt, housing
is also actually you know where you do your work
and so you home office as well. Yeah, so it's
got a dual purpose. I will say though, there was
a stat I saw recently almost fifteen percent of Americans
spend over fifty percent of their income on housing. Jeez,
(16:36):
that's a lot. Yeah, that's an awful place to be.
And so yeah, we just don't want you to be
in a place of weakness when it comes to buying
a home. And if you're in a situation obviously a
mortgage lender typically isn't going to allow you to get
into that kind of space. But you know what, if
you follow what a lender tells you can afford. There's
a good chance that you're going to get into a
position where you can't afford your mortgage with a comfortable
(16:59):
level of say means and investing at the same time.
And that's not the place that we want you to be.
We want you to be in a place of strength
in housing. And if that means you need to look
at buying in a different neighborhood or look at buying
a smaller home, we think that's a trade off you
need to be willing to consider, because being house port
is no fun. Oh, Joel. Also, financing, like, we didn't
really define it, and I think most people know what
(17:21):
financing is, but that's just sort of a fancy term
for how you're going to pay for your house unless
you have cash to buy your home. And if you
do have cash to purchase your home, you probably know
what financing is and you reach spollars. But but yeah, basically,
pretty much everyone is going to be financing their home
and that just means getting alone for the purchase of
that home. And when it comes to getting that financing
(17:42):
or getting that loan for your house, well, credit unions
are a great place to start. So if you're not
a member of a local credit union, we would encourage
you to go join one and make sure you're shopping
rates with the credit union that you're a member of.
Also consider contacting a mortgage broker in your area. They
often have access to a whole slew of lenders and
so they can help you find some of the best
(18:02):
rates available on the market. Ultimately, you're gonna want to
make sure you go with a lender that has experience
and that can close quickly. Lenders that have a solid
reputation that have been doing it for years. You can
just feel a lot more comfortable with that and closing quickly. Well,
that's just going to allow you to take advantage of
some of the best housing deals that you find. And
(18:23):
we mentioned financing and when making sure you have that
lined up before you even seriously start looking at houses,
And that's a big reason why I Joel like you
want to have financing in place. That way, when it
does come time to look at houses, you can pounce.
You can move quickly because in hot real estate markets
where sellers just have tons of buyers coming to them,
they're gonna typically go with whoever can come to them.
The quickest with the best offer, and so you may
(18:46):
not be able to show up with the best offer,
but you can definitely get your foot in the door.
You can have a leg up if you can turn
it around quickly and you've got your ducks all in
a row and real quick as well. Joel, you mentioned
credit unions. This might be helpful for our listeners. But
so credit unions are essentially the same as banks, right
like they they all offer savings and checking accounts and
offer loans whatnot. But credit unions are nonprofit and typically
(19:07):
offer better rates. And then you've got mortgage lenders, and
they typically will be faster and more streamline since they're
only in the business of making loans. Often times they
end up selling your mortgage to a bank, typically to
one of the big ones, and you know the big
bank will be the ones that end up servicing your loan.
And then, Joel, you know you already mentioned brokers, but
they kind of shop around for you and they might
(19:28):
be a great fit for you, in particular if you're
self employed or if you have a unique buying situation.
They're aware of the different products that are out there
and might be able to sort of custom fit something
more to to you and your needs, and and they
get paid either directly by the lender or a lot
of times, uh, their fees are baked directly into your rate.
I know, for like Kate and I specifically, we maybe
(19:49):
should have considered a broker early on, like when we
got our first house, because we had only been in
business for one year and because of that, we got
stuck with a terrible adjustable rate mortgage that we had
to refinance just a few years later, and that costs
a lot of money. Yeah, So if you don't have
a credit union and you're in the market for a house,
will go to n c U. A will put a
link to that in the show notes. That's gonna be
(20:11):
the website where you can find a local credit union
in your area. And so be sure to shop shop Shop.
You're gonna want to get three to five quotes minimum.
So many people Matt, like I mentioned quickly earlier, skip
this step, and you know what, it ends up costing
them thousands, if not potentially tens of thousands of dollars
over the long run. And it's not usually the closing
(20:32):
costs that are the biggest difference, although that can be
you know, a few thousand dollars even in difference between
different lenders. Often it's gonna be that slight difference in
interest rate combined with those closing costs that can cost
you tens of thousands of dollars depending on the price
of your home. So you're gonna want to make sure
you get a couple quotes from credit unions, a mortgage broker, involved,
a local lender, and online lender, Like, you're gonna want
(20:54):
to kind of run the gamut. You're gonna want to
get a lot of quotes so that you can bring
them to the table, look at the apples to poles
comparisons and go with the lender that has the best
overall package for you. Yeah, and the actual document man
that you're gonna want to use to compare those apples
to apples is the loan estimate documents. It's gonna have
your points on there, your interest rate, your closing costs,
(21:15):
just everything that you're gonna want to take into account
when it comes to shopping the different lenders. And Matt
just mentioned getting an adjustable rate mortgage when he bought
his first house, we would highly advise against getting an
adjustable rate mortgage. Had they suck. Yeah, that can lead
to a lot of problems down the road. And so
the thirty year fixed is kind of the standard in lending.
That's kind of what most lenders are going to steer
(21:38):
you towards, and it's also one of the best products
on the market. But you should challenge yourself to consider
a fifteen year or a twenty year mortgage if your
lender offers it, and almost every lender offers at least
a fifteen year. If you can barely afford the thirty
year payment, though, you should really question whether or not
you can afford the home. It's worth looking at the
fifteen and twenty year mortgage options to see if one
(21:59):
of the can fit in your life. If they can,
you're gonna get a lower interest rate, and you're going
to obviously be paying on your loan for a lot
less years. The trade off is that you'll be paying
more every month towards the price of your house. But
if you can't make a fifteen or twenty year mortgage
work for you, a thirty year mortgage is a great
way to go. Just make sure that you can easily
afford that thirty year mortgage payment in your monthly budget.
(22:22):
Yea man. The reason for that is because you just
want to have margin in your life. When you own
a home, there are a lot of things that can
go wrong. There's a roof, there's electrical there's furnaces, there's
just all sorts of systems and plus a lot of
times you just want to spend money on your house.
Typically homes are maybe a little bit larger than the
space that you've been renting, and so there are just
(22:42):
other expenses that you want to make sure that you're
easily able to pay. And if the monthly mortgage payment
is equivalent to what you're paying in rent depending on
your income, that's potentially a red alert because when you
were renting, you weren't having to pay for any sort
of upkeep, and on our new home, guess what upkeep
is your responsibility. So unless you could easily afford them
(23:03):
out that you were paying in rent, you're gonna want
to find a house that provides you with a monthly
mortgage payment that actually comes in at less than what
you're paying in rent. And as far as upkeep and maintenance,
jool like most experts say to expect to pay one
percent of the cost of your home. And so you know,
earlier I mentioned that the median price of homes in
(23:24):
the in the United States last year was over three
hundred thousand. That means you're looking at spending three thousand
dollars additional every year just to maintain your home. And
while we're on the topic of percentages, make sure that
you have enough for down payment. You know, if you
don't have at least five percent down you probably shouldn't
be shopping around for a home is best you're gonna
be able to get the best rates. There are some
(23:46):
products out there that allow you to put down less.
You're looking at three and a half percent for an
f h A loan, for a v A loan, even
zero percent. The fact is those don't put you in
a strong position. Doesn't put you in a strong position
when it comes to the equity that you have in
the home, but also when it comes to trying to
purchase that home and make offers, those products just don't
look quite as strong. And we'll get more into that
(24:06):
next week. Actually, yeah, Matt, and I think if you're
bringing less down payment to the table, you need to
actually be willing to stay in the home even longer.
Forget seven years, how about ten right or the rest
of your life? Right? No, but seriously, because if you're
putting down on a home and you stay there for
five years, the chances of you selling your home and
going to the closing table and having to write a
(24:27):
check are are highly unlikely. But if you buy a
house with zero percent down with the v A loan
or three and a half percent down with an f
h A loan, and you're only there for four or
five years, the chances of you having to write a
check at the closing table, well they're pretty high, and
you might not have the money to cover it. And
so if you are going to come to the table
with less money down, which I don't think it's the
end of the world. Necessarily, it helps get a lot
(24:49):
of people in a home that they really want. Just
consider how long are you going to be in the home,
and you might need to just extend that timeline in
order to make it work. Yeah, So we're gonna talk
specifically about the different fee ease and costs associated with
purchasing a house next week. But right after the break,
we're gonna cover your new best friend who's gonna save
you tons of money your realtor. M all right, Matt,
(25:17):
let's talk realtors. It turns out most people find a
realtor from their cousins, best friend or Facebook or something
like that, right, And that's just not the best way
to find a realtor in your area. And I said
in your area, because it's really important to find someone
who specializes in the neighborhood or town where you live.
An agent with experience and connections is priceless. They know
(25:39):
the ropes, they know the system, they know the people.
And so one way to find that right agent is
looking at for sale signs of homes that are for
sale in your target area. If you see the same
agent on lots of them, that's a great agent to
consider asking to represent you in the home buying process.
The same thing applies when you're looking at listings online.
If you see that same name popping up over and
(26:00):
over at homes that you're interested in, they're probably a
great choice to be your representative agent as a buyer. Yeah,
you know, man, When you have a great realtor who
is focused and specialized in a specific area, there's a
good chance they'll know of deals even before they even
hit MLS and before they go public, there is a
chance that you can get a really great deal. Yeah.
Those are called pocket listings. And by the way, you
(26:22):
just mentioned MLS, that's the Multiple Listing Service and that's
where pretty much everybody who wants to sell a house
list their home. If you're for sale by owner, it's
harder to get your home on the MLS. But the
MLS that's like the holy Grail. You have to have
your home on there in order to get maximum exposure
to all the buyers that you want to potentially reach.
It's like Apple Podcasts for podcasts. Right. If your podcast
(26:43):
ain't there, ain't nobody listening, right. But also keep in
mind too that the Internet is honestly changing what it
looks like to go and look at homes with your realtor,
like it used to be back in the day that
your realtor would send you maybe six or seven, you know,
homes that they've handpicked, and you get to go and
you tour them and you decide is this one gonna
be nice? Maybe it will, maybe it won't. But it
was kind of time consuming, kind of old school. Did
(27:05):
you do that with your first house? Oh? Yeah, okay,
there was a lot of Saturday driving around with my realtor,
which is fascinating because now I feel like so much
of the process is shouldered by the buyer. Yeah, which
is good though, I think because it's completely Yeah, it's
more efficient, and because there are tools out there now
that allow the buyers to have more autonomy to search
(27:26):
and to make their own filters and to create their
own criteria to find the home themselves. And what that
means though, is that you plan to meet at the
house with your realtor, but you don't have to drive
around in their car while, you know, making awkward conversations. Yeah.
And so you mentioned that sometimes realtors who specialized in
the neighborhood might have access to what are called pocket listings,
and that means that they hear about something that's going
(27:48):
to come up for sale or something that's just kind
of on the d L there on the inside, and
they know what's coming up. And so it's good to
have an agent who is connected, who's well connected, and
who has access to pocket listings like that. So, for example, Matt,
I've got a real estate agent. She's the best. Typically
I'm searching on my own on the MLS for properties
(28:08):
that interests me. But if a pocket listing comes up
that she hears about that fits my parameters, she knows
what I'm looking for, she will send it to me
and she'll say, hey, I know that you're in the
market for this kind of property. Does this interest you.
This is coming up on the market in a couple
of weeks, and I know about it ahead of time,
so we can get in ahead of other potential buyers
by being quick and jumping on it now. And so
(28:30):
that's one of the benefits that having an experienced agent
can offer you. In addition, I feel like an experienced
agent helps you with the negotiation process. And I know
that potential homebuyers might be a little more apprehensive to
a realtor taking kind of a bite out of the
pie taking a percentage fee. And we'll talk about this
more next week. But having a great agent is similar
(28:51):
to having a great lawyer in a court of law.
They're going to help you in the negotiation process. And
in all honesty, I've had great agents that have saved
me more than the fee that they're taking. So don't
cheap out on an agent. Find a good one. And
we've already mentioned Zillo, right that's my favorite, Joel, you
mentioned Redfinn, how that's your favorite. They are amazing tools,
and they allow homebuyers to do a ton of research
(29:12):
on their own. It allows them to really get to
know a neighborhood and familiarize themselves with what an area
has to offer. However, don't neglect to actually go visit
and go drive around the streets in person. There's so
much that you can gather from just being there as
a human being. Yeah, and you're gonna want to drive
those streets not only during the day, but at night too,
because some neighborhoods, I don't know where you live, but
(29:34):
but where we live, neighborhoods can change from day to evening,
and so driving by at different times of day can
help you get a better feel for the neighborhood. And
not only different times during the day as well, man,
but just on the weekends too. So by checking it
out on the weekend as well, just drive by and
see what's going on over there. That's an awesome way
to get a feel for the community. And you can
also do something that I like to call the wave test,
(29:56):
which is when you're driving around in an area that
you're scoping out, you know, have your window down hopefully
it's not too bitterly cold. And then when you see
someone kind of walking on the street or hanging out
on the front porch, just wave at them. What you
get to do is you get to see how friendly
they are and if they just kind of stare at
you and glare well, I don't know, maybe this isn't
the best street, or or maybe they're just having a
bad day. I don't know. Is there like a percentage
(30:17):
of waivers that you're looking for in a neighborhood to
determine whether it's worth buying a house in or not.
Like in general, I am looking for folks that are
just happy to see me. Right, Like if everyone that
you wave two just stares at you and they're wondering
why it is that you're waving at them, It's like,
I don't know, I want to live somewhere that's friendlier.
I want to live on a friendly street, And for
me personally, that's something I value. I like it. The
(30:38):
wave test. Yeah, another important thing to do, Matt. Not
only perusing Zillo and redfin right, more weeks and months
you spend on those sites, perusing homes and neighborhoods. It's
it's gonna help you. But it's also important for people
to take a look at a lot of homes in person,
especially for first time homebuyers. This is the largest purchase
you're gonna make potentially in your life. So do the research,
(30:59):
and not only the online research, but the more homes
that you see in person, you're gonna start to see
the corks the different homes present. If you look at
three homes before you make an offer, you're just in
a much inferior position to someone who's looked at fifty
homes before they make an offer. You just have a
whole lot more idea of what you're getting into if
you've looked at a much larger percentage of homes. Yeah, Joe,
(31:21):
I love that you said first time home buyers as well,
because I know for Kate and I as first time
home buyers, it took us a while to figure out
what it was exactly that we were looking for, Like
it took us looking at ten houses before we realized that, like, oh,
we're looking for a bungalow, We're looking for a front porch,
Like that's the kind of home, that's the kind of
vibe that we're looking for, and because we have never
owned a home, we didn't quite know how to verbalize
(31:43):
that to our realtor. And she didn't know because she's
just like, well, this is how much she said you
could spend, and this is these are the areas that
I know you can afford it. I fitted in your parameters.
I don't understand. But what we didn't realize was that, oh,
we're looking for a front porch, and typically bungalows have
a front porch, and typically you can find in these
nineties bungalows in these types of neighborhoods. For first time
(32:03):
home buyers, it's I think it's really important to look
at as many homes as possible. And also when you're
looking at these different homes, make sure you're taking lots
of pictures, especially of sort of like the weird things, right,
the different quirks, the things that aren't in the pictures
of the listings, because the listing photos they look really
good because they're taken by a professional real estate photographer
(32:25):
and they're made to make that house look as large
as possible, uh, while excluding all the different oddities. And
so by taking pictures and even jotting down a few
notes will help you to remember these different homes, and
that might also help you to remember the different feelings
that you had when you went into these homes, because
you know, if you're looking at maybe three or four,
maybe five homes in a row, a lot of times
(32:45):
they can kind of blur together. And sure you can
go back and look at the pictures, but having some
additional photos on your phone is an awesome way to
sort of document the weirdness of that particular house. Yeah, Matt,
speaking of quirky things, I think, especially a lot of
first time HomeBuyer, but homebuyers in general, they kind of
want that fully put together home, right, and the fully
(33:06):
put together home can have a couple of issues with it. One,
it can be prohibitively expensive to have the home that
has like granite countertops and everything is completely finished properly.
And the other thing is maybe it can look slick
on the outside, but beneath nothing's really been replaced. There's
old electrical, there's old plumbing, and so it can look
good to the naked eye, but down deep, that house
(33:27):
has a lot of potential issues with it. And so, yeah,
do you have thoughts on what people should be looking
for when they're buying a house, when it comes to
finishes and curb appeal. Yeah, well, I mean in regards
to like the specific systems, right Like, we're gonna talk
a lot about that. Next week. We're gonna talk about inspections.
We're gonna talk about the specific steps that you want
to say when it comes to actually purchasing a home,
the things that you can't see. But I want to
(33:49):
encourage folks to not be afraid to look at ugly houses.
Like you said, a lot of times we're sort of
turned off by just weird things, Like you walk into
a house and you think, oh, it doesn't smell like yeah,
one it to smell, or like there's weird art on
the walls. But those are all things that you can change.
Paint color, even a chandelier in the dining room, like,
these are things that are easily modified that you can
(34:10):
quickly change to make that home feel more like your
own home. And so I mean, I just want to
encourage folks to not be afraid to purchase a home
that might feel a little ugly, but it's got the amenities,
it's got the room count, and it's got the number
of bathrooms that you're looking for, or it's in the
right area that you're looking at. You want to make
sure that the crucial, like the most important things are
taken care of. Don't be turned off by, Oh, they've
(34:32):
got weird pendance over their bar I would never put
those in my house. Well, it doesn't matter, you can
swap those out. I see. First time homebuyers would have
fall into this line of thinking, right, and it keeps
them from purchasing a home that they could really get
a deal on and then spend a couple hundred bucks
on after the fact and truly make their own and
just maybe a couple of weekends worth of work. Yeah,
if you're looking at wood paneling or old cabinets with
(34:54):
old hardware, those are the kind of things that you
can quickly change for almost no money. But those are
the kind of things that so many homebuyers ride a
house off because of even though it is a solid
home in the place where they want to live, they say, Matt, Nope,
it's antiquated, it doesn't fit my style needs. I think
it's really good advice, Matt. That's something you want to
avoid judging house purely based on because there are so
(35:17):
many other intangibles. Maybe dealing with those things and being
able to fix those little things up over time can
help you get into the size house that you want
in a neighborhood that you like, and then make that
house your own over time. Plus you mentioned wood paneling.
It all comes around. Dog. I feel like wood paneling
is hot. That's true. That's true. Man. When we bought
our house, it has the original wood molding from the
(35:38):
nineteen twenties. Yeah, the trim around your door. But yeah,
that like the crown molding and all that. Yeah. Yeah,
so there it's all unpainted, original wood molding, original stain.
It's amazing. It's hard to find, right. And I remember
walking you with my wife and she said, well, maybe
if we painted this white would be a little bit better.
And I was like, no, no, no, we can't do that.
We can't do that. This is original. I mean, this
(35:58):
is a hundred years worth of age on this beautiful trim.
No one's painted it yet. We can't be the ones
to do that. We're not going to touch that patina. Yeah,
until we grew into it and we love it. I
mean I loved it from the get go, but we've
really grown into it. And that's just the kind of
thing that once you've lived in the house for a
matter of months, that stuff just doesn't bother you like
it did when you walked in there the first time.
(36:19):
Your eyes are tuned to every single detail as a
first time HomeBuyer, especially walking through a home, and you
know what, you can change little things over time, and
also some of those things that bothered you maybe upon
first walk through start that big of a deal as
you grow into the home. Let's go ahead now and
take us back to the beer. We've got Ryan Geist
Brewery and today we're drinking ink, which sounds weird to say,
(36:42):
but this is an Imperial stout aged and bourbon barrels.
This beer, to me, Matt, felt like a quintessential stout.
None of the flavors necessarily stuck out in a major way.
Nothing was off putting. It was just amazingly nice, pleasant
bourbon barrel aged out. If anything stuck out in my
mind just a little bit, there is a little bit
of kind of light fruitiness, almost like Belgian quad or
(37:04):
something like that. Oh yeah, dude, kind of mixed in
like get you if you're fine tasting notes. You know,
I'm thinking about becoming a SMaL Ya. Maybe in my
next life, we'll see, but yeah, this was super delicious.
I thoroughly enjoyed it. Nice man, I am with you.
This was an incredibly well balanced beer. You know, when
you think of like the classic or the quintessential college experience,
and you think of, you know, the perfect college town
(37:26):
and you've got the sports, and you've got the academics,
and it kind of has it all. And that's when
I feel about this beer. When it comes to a
bourbon barrel Aged Doubt, it's sort of quintessential. It's got
everything you want. It's got the barrel, it's got the
dark flavors, it's got a cool name, inc It's got
everything you think of when you want to have a dark, boozy,
bourbon barrel Aged Doubt. And I'm incredibly thankful that our
(37:47):
friends over at Ryan Guy sent this our way. We're
looking forward to, hopefully someday visiting that sweet tasting room
that we mentioned last episode. Just this amazing industrial space.
And that's one of the things I love about breweries
is how they're sort of reclaiming these old, massive spaces
that have been neglected and turning them back into spaces
that people can enjoy and serve amazing craft beer in
(38:08):
all Right, Matt, onto our final thoughts. What to do
before you buy a house? Well, just remember house does
cost a lot of money, and any time that you
can spend researching and familiarizing yourself on the front end
will prevent you from making an ill advised decision buying
a bigger house than you need, buying a house that
you're unwilling to stay in for seven years or longer.
Don't be afraid to spend more time before you buy
(38:30):
in order to ensure that you're making the right decision. Also,
now is the time to clean up your credit. You
want to make sure you have things in order before
it comes time to applying for your mortgage. It takes
time to straighten now your credit, so make sure you
go ahead and get started on that well before you
start shopping and putting offers on houses. Yeah, a good
credit score can make a huge difference in the rate
(38:51):
that you end up getting offered, which has a specific
correlation to the out of pocket costs of your mortgage
every month, And in regards to that getting financing, be
sure to shop, shop shop. You want to make sure
you get three to five quotes minimum. Most people skip
this step. They go with one lender and it ends
up costing them thousands of dollars. Getting multiple loan estimates
that you can compare against each other will save you
(39:13):
lots of money. And also, don't underestimate the importance of
a great neighborhood agent who's familiar with your area. And
while you're looking at different houses, keep in mind you
want to look at a ton of houses, especially if
you're a first time HomeBuyer, and don't forget the wave
test and to see how maybe receptive the community might
be to you. And also don't be distracted by weird furnishings.
(39:33):
You know, a house with less curb appeal could be
an incredible deal for you. Alright, Matt, this episode has
been about before you buy a house. Next week we're
gonna get into I'm ready to buy a house? What
do I do? All right? And so we're gonna get
into all those specifics a week from today. So make
sure you check out next week's episode for more details
on what's next in the process. And so everyone, thank
(39:54):
you all for listening. We really appreciate it's we'll have
our show notes up for you on our website how
some money dot com. And also if you have some
feedback for us. If if you feel like that we
have left some things out or that we have some
room for improving, go to how to money dot com,
forward slash do Better and there you'll be able to
send us a note and we would love to hear
your feedback. We're always trying to improve and make sure
(40:16):
that we're doing things well, so we'd appreciate it if
you shot us a message. Yeah, and if you like
the show and you found it helpful, we'd appreciate it
if you would consider leaving a review on Apple Podcasts.
And also if you dig it, hit the subscribe button
while you're there. Joel, Until next time, Best Friends Out,
Best Friends Out,
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