Speaker 1: Episode to nineteen home buying tips in a crazy hot market.
Speaker 1: Welcome to the Frugal Friends Podcast, where you'll learn to
Speaker 1: save money, embrace simplicity, rice and liver with your life.
Speaker 1: Here your host Jen and Jill. Mm hmmmmm, Welcome to
Speaker 1: the Frugal Friends Podcast. My name is Jen, my name
Speaker 1: is Jill, and we are coming off the heels of
Speaker 1: the Spending Symposium. We are quite tired, quite fulfilled, and
Speaker 1: very excited all of the things that happened after a
Speaker 1: crazy fun high of an experience and now talking about
Speaker 1: spending on housing, the largest purchase most of us will
Speaker 1: make in our lives. So hopefully we've learned a lot
Speaker 1: from the Spend Symposium that can help to inform those
Speaker 1: of us who are looking to buy a house currently. Yeah,
Speaker 1: but we'll also turn to the internet like we normally do. Yes,
Speaker 1: we will turn to the internet. And also my personal
Speaker 1: experience of having just bought another house. We bought a
Speaker 1: house in and we closed in May on another house,
Speaker 1: and we will be weaving some of that Um and
Speaker 1: Jill closed down a house in So we'll be weaving
Speaker 1: all of our knowledge of previous home buying, current home
Speaker 1: buying and research from experts to help you decide whether
Speaker 1: it's the right time to buy a house and how
Speaker 1: to do it. But first, this episode is brought to
Speaker 1: you by the Frugal Friends Club. So we've reimagined our
Speaker 1: membership to be more accessible and more affordable for more people,
Speaker 1: and we can't wait to show you what's inside. So
Speaker 1: a few of the things that you will get is
Speaker 1: the Radical Middle Method video series and it's going to
Speaker 1: walk you through step by step in designing your dream life,
Speaker 1: writing your one page financial plan to get there. And
Speaker 1: every month you'll get a new challenge that will help
Speaker 1: you save smarter, not harder, so you can live a
Speaker 1: frugal life in pursuit of your financial goals. So we
Speaker 1: have a ton of new members as we just wrapped
Speaker 1: up the summit yesterday, so it is the perfect time
Speaker 1: to join. If you're looking for community, if you're looking
Speaker 1: for a hive mind, if you're looking for something to
Speaker 1: keep you motivated on your journey or to figure out
Speaker 1: where to go on your journey. It's a great resource.
Speaker 1: So head to Frugal Friends podcast dot com slash club
Speaker 1: to join in our July challenge, which is called the
Speaker 1: Mindset Makeover. If you are coming off the summit just
Speaker 1: like we are, and just wanting more and feeling sad
Speaker 1: to miss all of your friends. Join us in our
Speaker 1: in our membership club, because there's just more like that
Speaker 1: coming at you constantly. Yes, So if you are looking
Speaker 1: to buy a house, uh, then there are a few
Speaker 1: other episodes you might want to que up for after this.
Speaker 1: We've got episode one sixty one, which is tips for
Speaker 1: first time home buyers with Scott Trench and Mindy Jensen
Speaker 1: of Bigger Pockets. We've got episode one four which is
Speaker 1: how to save money when buying a house or refinancing,
Speaker 1: and then episode sixty seven talks about if buying a
Speaker 1: house is the right frugal move for you. So one, six,
Speaker 1: one and sixty seven are really good ones to queue
Speaker 1: up after. But with the caveat that, with the exception
Speaker 1: of one st one, this is a really unique time,
Speaker 1: and this is a really unique market, and we're going
Speaker 1: to talk about some of the nuances of it and
Speaker 1: maybe why some of the advice you've gotten previously from
Speaker 1: people who may have bought houses five ten years ago
Speaker 1: may not be worth listening to, and so we're going
Speaker 1: to dive into some of that in both of these
Speaker 1: articles that we're checking out today. So the first one
Speaker 1: is twelve tips for buying a home in a hot
Speaker 1: real estate market, and it's from meta share dot com
Speaker 1: for some reason, but they took it. It's a syndication
Speaker 1: from another website. So don't don't let that. Don't let
Speaker 1: the healthcare sharing website fool you. It is syndicated. Um.
Speaker 1: I know the writers and they are extremely smart women.
Speaker 1: So we're going to go through all of these and
Speaker 1: uh talk about some tips for buying. Jill start us off.
Speaker 1: So the first one, if any of you have watched
Speaker 1: House Hunters, you're familiar with this up clarify your housing
Speaker 1: needs versus wants. It really is good to get this
Speaker 1: on paper. I think thinking through processing what do I
Speaker 1: want in a home can also help us figure out
Speaker 1: whether now is a good time to buy. There's some
Speaker 1: dual purposes in thinking through what do I want, what
Speaker 1: do I need? Why do I want a house right now?
Speaker 1: And put that in writing and then prioritize those things
Speaker 1: of what is a high ranking need this is in
Speaker 1: many ways a non negotiable and what might be lower priority.
Speaker 1: And the article indicates that if we maybe buy a
Speaker 1: house that has some of our lower priority needs but
Speaker 1: not our highest priority needs, we could end up regretting it.
Speaker 1: So having that time, taking that space to think all
Speaker 1: of those things through will help because for many of
Speaker 1: you who know right now, with how hot the housing
Speaker 1: market is, decisions have to be made very quickly. It's
Speaker 1: very fast paced, and in any type of market, buying
Speaker 1: a house can it can feel like wait, wait, wait, wait, wait, okay,
Speaker 1: do everything right now. So have knowing these things ahead
Speaker 1: of time and being really clear about them will help
Speaker 1: in some of those very quick decision making moments that
Speaker 1: you will most likely find yourself in. Yeah, it definitely
Speaker 1: is a hurry up and wait kind of scenario. And
Speaker 1: this list is super important because you will get to
Speaker 1: a point where you're like, give me anything, I'll take
Speaker 1: any house please. But it is it is worth taking
Speaker 1: your time, even in a market this crazy, it is
Speaker 1: worth taking your time. Pay for the month to month rent,
Speaker 1: It is worth it to make this decision right. So
Speaker 1: definitely look at your non negotiables, but being negotiable with
Speaker 1: a lot of things like if you're looking for the
Speaker 1: waterfall courts, countertop island, like that's probably not a non negotiable,
Speaker 1: So be realistic about your wants and needs and recognize
Speaker 1: what can be done once you're in the home. It
Speaker 1: always made me laugh watching house Hunters when they're like,
Speaker 1: they don't have stainless deal appliances, and for that reason,
Speaker 1: I'm out and I'm like, you're gonna not buy a
Speaker 1: couple hundred thousand dollar home just because of the appliances
Speaker 1: when you could buy the appliances that you want once
Speaker 1: you're in the home. So looking at more of the
Speaker 1: foundational pieces that are must have that would be very
Speaker 1: hard to create on your own versus the lower hanging fruit.
Speaker 1: That's like, all right, it doesn't have this, but in time,
Speaker 1: I the space. Can I can create that in this space? Yeah,
Speaker 1: when we're talking about hundreds of thousands of dollars in
Speaker 1: a purchase, like you can get a stainless Deel appliance
Speaker 1: package from home depot for three four grand, So like,
Speaker 1: don't let that be a big difference for you. Second
Speaker 1: is to get your finances in order. So let's really
Speaker 1: dive into this one. So I've made a list of
Speaker 1: the most important points from this one. First, credit scores matter.
Speaker 1: Don't let anybody tell you that credit scores don't matter
Speaker 1: because they get you a better rate. If your credit
Speaker 1: score is zero and you plan to do manual underwriting,
Speaker 1: you will pay a higher interest rate and you will
Speaker 1: need to put down, and putting down in this market
Speaker 1: is unnecessary for a first home. Three and a half
Speaker 1: percent will get you in the house. You will need
Speaker 1: extra money in your bank account. Even if you're like, oh,
Speaker 1: I can afford to put five or ten percent down,
Speaker 1: you will probably need extra money just in case. If
Speaker 1: you do an appraisal gap on your UM on your
Speaker 1: when you're under contract and it appraises for four but
Speaker 1: you're like, I'll do a ten tho dollar appraisal gap um,
Speaker 1: and you might have to pay an extra ten tho
Speaker 1: out of pocket that the bank won't pay. So it's
Speaker 1: more advantageous to you to have the money to do
Speaker 1: the three and a half percent down if you can, um,
Speaker 1: we did five percent down on our house. But you
Speaker 1: can also say like you can put down on like
Speaker 1: when you're putting in your offer, that's the word I
Speaker 1: was looking for offer. You can say I'm gonna put down,
Speaker 1: and then you go to your lender and you're like,
Speaker 1: I'm doing three and a half like they don't communicate
Speaker 1: until there's a contract, you know. So I'm not saying
Speaker 1: lie or do something unethical, But you can change your
Speaker 1: mind at any time, Like if you say on the
Speaker 1: offer and you're like, man, I'd rather do three and
Speaker 1: a half, that's fine. This one set this article says
Speaker 1: to consider to get pre approved for at local companies,
Speaker 1: at local banks. I have found that I love credit unions,
Speaker 1: but they're taking a really long time, like forty five
Speaker 1: days to close, and nobody's gonna very few sellers are
Speaker 1: doing a forty five day clothes. They're preferring to sell
Speaker 1: to hedge funds that can do a you know, two
Speaker 1: week clothes all cash, which we'll get into that later.
Speaker 1: But look at local banks, but also compare national. We
Speaker 1: ended up doing going with a national bank because the
Speaker 1: interest rate was lower than what we could get at
Speaker 1: a local and you can always refinance into local. That's
Speaker 1: what we did with our first home. We went national,
Speaker 1: and then we refinanced to our credit union. So get
Speaker 1: pre approved at several lenders, so local and national, and
Speaker 1: get all compare apples to apples, so like what you
Speaker 1: can get at the same percent down with the same
Speaker 1: like price house like all for just estimate sake with
Speaker 1: no points and see what, see what you get at
Speaker 1: all of them. You need to get pre approved. I
Speaker 1: don't even think anybody's pre qualifying right now, so I
Speaker 1: don't think that's a problem. But they will do a
Speaker 1: soft credit check. And then also whatever you are quoted
Speaker 1: is just the mortgage payment, and you want to be
Speaker 1: sure to add about thirty to that to predict your
Speaker 1: taxes and insurance and p M. I. So whatever you get,
Speaker 1: add thirty and that just times it, you know whatever,
Speaker 1: two thousand times point three and then add that to
Speaker 1: the two thousand and and that's really closer to what
Speaker 1: you'll probably get your monthly payment to. So but if
Speaker 1: you take anything away from this, credit scores matter, and
Speaker 1: don't even look at putting more than three and a
Speaker 1: half percent down. And as so, I'm not a real
Speaker 1: state expert per se. I'm speaking from immediate experience and
Speaker 1: what I experienced, so take what I say with a
Speaker 1: grain of salt. I'm our market is hotter than most
Speaker 1: other markets in the country too, so I'm a bit
Speaker 1: more jaded. But yeah, and everyone's situation is going to
Speaker 1: be different. If you've got and extra then then go
Speaker 1: for it. I think it can be great. Everyone's p
Speaker 1: m I is different. I know for some people it's
Speaker 1: an extreme weight when you don't put down, and for
Speaker 1: someone like me, I think we put seven percent down
Speaker 1: and it's like an extra thirty bucks a month for
Speaker 1: the p m I. So to me, it's like that's
Speaker 1: way better than having stretched to put down. It's it's
Speaker 1: pennies for now until you know we can get up
Speaker 1: to the point where we've paid off of the house.
Speaker 1: So all that to say, there's permission to do the
Speaker 1: three and a half, and especially to make sure that
Speaker 1: there's room for the additional expenses, not just in the closing,
Speaker 1: but what you're going to run into with homeownership and
Speaker 1: if something goes wrong or you want to do renovations,
Speaker 1: so you can keep some cash in your pocket, especially
Speaker 1: if your interest rate is pretty low. Number three on
Speaker 1: here is to find a responsive and knowledgeable real estate agent.
Speaker 1: I could not agree with this more and that, especially
Speaker 1: when we're talking about first time home buying. This I
Speaker 1: just could scream from the rooftop. I think it can
Speaker 1: be meant really incredible if you want to help a
Speaker 1: friend out, but if you know who's just getting into
Speaker 1: real estate. But my suggestion is this is a big
Speaker 1: purchase and if you've never done it before, it is
Speaker 1: best case scenario, especially in this housing market, to have
Speaker 1: someone who's very knowledgeable, knows what's going on, knows the neighborhoods,
Speaker 1: knows how to get in a deal, get it approved.
Speaker 1: I think we got our home because of the amazing
Speaker 1: real estate agent that we had. I don't think, I
Speaker 1: pretty much know we wouldn't have gotten this house if
Speaker 1: it weren't for him, because the seller told us that.
Speaker 1: So so, speaking from my personal experience, having someone responsive
Speaker 1: and knowledgeable, so not just knowledgeable, but like they say,
Speaker 1: responsive available, someone who is able to answer their phone
Speaker 1: of all hours of the night, you know, someone without
Speaker 1: a family espouse at home, and so there are boundaries
Speaker 1: in work. So I never expected to talk to our
Speaker 1: agent past nine pm, um, and we actually had like
Speaker 1: a we lost a house because our real I mean
Speaker 1: because of the stupid like if you're doing business at
Speaker 1: eleven pm, I don't really I don't want to do
Speaker 1: business with you. But but yeah, so I don't. I
Speaker 1: don't think that's right. I don't think it's right to
Speaker 1: be working at all hours of the day, but every
Speaker 1: time I needed our agent, he was there. And so
Speaker 1: I call up several get offered, like start out working
Speaker 1: with several, and stick with the one who you feel
Speaker 1: best about, who's bringing you the most deals, who is
Speaker 1: the most invested in you. We tried out, I mean,
Speaker 1: we went with so we were trying to work with
Speaker 1: investor friendly agents because that's what we were most looking at.
Speaker 1: And then it just ended up that we couldn't compete
Speaker 1: with investors and so we had to like switch to
Speaker 1: own or occupied. But we got um I mean three
Speaker 1: or four agents, and they either wouldn't give us the
Speaker 1: time of day or didn't know didn't understand what we wanted.
Speaker 1: And this one came from a referral. We hired a
Speaker 1: real estate coach. Shout out to Sarah Weaver, you can
Speaker 1: find her on Instagram, and she recommended um our agent
Speaker 1: Calvin to us UM and so that's who we ended
Speaker 1: up going with because he was the most responsive, he
Speaker 1: understood us the most, he was local. So we started
Speaker 1: out with several and then we just winnowed it down
Speaker 1: over like a few weeks. And so that's more. You
Speaker 1: are not contractually obligated to any like agent at first,
Speaker 1: you can definitely try them out, um and see who's
Speaker 1: going to go to bat for you, and then pick
Speaker 1: that one. Like, don't everyone in their mom is a
Speaker 1: real estate agent. You're not obligated to Anybody who's not
Speaker 1: doesn't know their stuff will go to bat for you.
Speaker 1: Finding someone who's full time is recommended, absolutely, absolutely, especially
Speaker 1: right now. So number four, I really liked this one.
Speaker 1: Tell everyone that you were on the hunt for a house.
Speaker 1: Just tell everyone. Don't let it be a secret because
Speaker 1: if you tell everyone, tell your mom, tell you, tell
Speaker 1: your friends, your mom's friends, tell everyone, um. Because if
Speaker 1: there's a chance you can get an off market deal
Speaker 1: through word of mouth, you can save a ton of
Speaker 1: money if you can get something like you know, my
Speaker 1: mom's friend, um, my, my mom's mom's friend died and
Speaker 1: they didn't know what they were going to do with
Speaker 1: the house, and so we kind of looked into if
Speaker 1: we could buy the house, and they ended up just
Speaker 1: like selling it because the market was so hot. But
Speaker 1: if it was a closer like friend or relative, I'm
Speaker 1: sure we could have had more common versations about that.
Speaker 1: So just tell people what you're doing and see if
Speaker 1: that's something that can happen for you to get an
Speaker 1: off market deal. Number five, Watch for new listings and
Speaker 1: then stay in touch with your realtor so you don't
Speaker 1: have to only let your real ittor do all of
Speaker 1: the work and just call you up when they find something.
Speaker 1: If you are actively wanting a house, you need a
Speaker 1: house now, sooner rather than later. You can also be
Speaker 1: a part of that search process. It is very possible
Speaker 1: that you could find something that is not on your
Speaker 1: realtors radar, but yet they could be an incredible help
Speaker 1: and then making that final sale happen. This was my
Speaker 1: in Eric's experience. He actually found a house that was
Speaker 1: only listed on Zillo for sale by owner. Our realtor
Speaker 1: never did see it, so the fact that we were
Speaker 1: able to find it and then utilize him to kind
Speaker 1: of close the deal was incredibly helpful. So definitely be
Speaker 1: on those sites, be searching. It's very possible that you
Speaker 1: might find something just as it's listed and be able
Speaker 1: to pounce in the right timing that the place could
Speaker 1: be yours. Yeah, we had the same experience for our
Speaker 1: first house. It was for sale by owner because the
Speaker 1: flipper was also a realtor and so she just represented
Speaker 1: herself and didn't put it on the MLS for some reason.
Speaker 1: So and then this one we founded ourselves. So, like you,
Speaker 1: you have to be proactive, you have to be doing
Speaker 1: your own research. And everyone looking for a house is
Speaker 1: on Zillo night and day. So this isn't something that
Speaker 1: we have to reiterate, um, but just know, like you,
Speaker 1: you have as much, if not more access to everything
Speaker 1: that's out there than like your realtor. So next we're
Speaker 1: going to combine six, seven, and eight. So these are
Speaker 1: basically getting your offer in order. So six is to
Speaker 1: put in a strong, clean offer, seven is to consider contingencies,
Speaker 1: and eight is don't make demands of the sellers. And
Speaker 1: these are all very true. Uh We So we were
Speaker 1: looking for about six months UM and and our story started.
Speaker 1: We were looking for an investment property. Initially, we had
Speaker 1: saved up enough to put down on an investment property,
Speaker 1: and we were going to do hard money, which is
Speaker 1: considered like a cash offer, so we were we went
Speaker 1: in very well prepared. In any other market, we would
Speaker 1: have been very well prepared to buy an investment property,
Speaker 1: but there were too many investors looking at the houses
Speaker 1: that we were able to afford. With that you know
Speaker 1: down they were paying for those houses in cash, two
Speaker 1: week close, no inspection, no contingencies, all cash. As is
Speaker 1: like if these were the offers we were competing with,
Speaker 1: and we just we couldn't compete. And I know other
Speaker 1: people are looking at the same like first time home buyers.
Speaker 1: We were standing next to them, you know, the same deal.
Speaker 1: They were going to put down even less, and they
Speaker 1: wanted traditional mortgages and just there was absolutely no competing
Speaker 1: against them. And it's made me truly embittered, honestly by
Speaker 1: the process of I don't hate real estate investors, like
Speaker 1: we are real estate investors now technically, but corporations and
Speaker 1: hedge funds going in and buying up communities like there
Speaker 1: are communities where thirty percent of all homes purchased were
Speaker 1: purchased by corporate rations and hedge funds, and in predominantly
Speaker 1: black communities like they are they are consuming, they are
Speaker 1: wiping out the market for first time home buyers and
Speaker 1: mom and pop investors, and it is it has embittered
Speaker 1: me to the process. Um so if that comes out,
Speaker 1: I'm super sorry. But so the so what I experienced
Speaker 1: is definitely to put in a strong offer is really
Speaker 1: one that two people who bought a house five years
Speaker 1: ago would would seem stupid, Like it would seem very stupid.
Speaker 1: We in February, our realtor was saying, like he lost
Speaker 1: four millions, put in offer, four million dollars in offers
Speaker 1: that got lost, and the ones that got taken they
Speaker 1: were seeing. We were seeing sixty two seventy k over asking,
Speaker 1: no inspection, all cash, and so in a lot of it.
Speaker 1: In a lot of the country, it's about fifteen to
Speaker 1: conservatively that's being pot all cash. Um. We're seeing twenty
Speaker 1: five in a lot of places in Florida. It's about
Speaker 1: half half of homes sold in recent months. I can't
Speaker 1: I'm looking at like at a different article for these facts,
Speaker 1: but it's half of home sold. We're paid for in cash,
Speaker 1: according to the National Association Real of Realtors. So there
Speaker 1: are companies that will help you make a cash offer
Speaker 1: that are not hard money. So you've got companies like
Speaker 1: Ribbon and home Light that will charge you one to
Speaker 1: one and a half percent of the homes value um,
Speaker 1: but they will make a cash offer on your behalf.
Speaker 1: And then in the time in the month that you're closing,
Speaker 1: you have time to switch that to a traditional mortgage,
Speaker 1: but the offer looks stronger because the offers cash um.
Speaker 1: There's also orchard that's just in Texas. But so if
Speaker 1: you want to look into Ribbon and home Light and orchard,
Speaker 1: these you will pay a little bit more for it,
Speaker 1: but they will do cash offers on your behalf. So yeah,
Speaker 1: there is an but even still with ribbon, they require
Speaker 1: three day inspection period. So there you you have to
Speaker 1: go in. Your realtor should know the state of the market.
Speaker 1: You need to be asking them how much over asking
Speaker 1: our houses going for? What are the contingencies, what are
Speaker 1: the inspection like? Ask all these questions so you know
Speaker 1: in advance what to expect for your offer. If they're
Speaker 1: like the offers that are winning are are fifty k
Speaker 1: over asking three day inspection um, traditional mortgage or cash offers,
Speaker 1: then you know you need to go. You know, if
Speaker 1: it's ca shofers winning, you know you need to go
Speaker 1: with a with a cash offer. If they can't answer
Speaker 1: these questions, you need to move on to a realtor
Speaker 1: that does know what offers are getting accepted. And then
Speaker 1: you also want to ask which offers are not getting accepted,
Speaker 1: what's the common denominator between offers you see not getting accepted,
Speaker 1: so you know you can't do that in your offer.
Speaker 1: It's going to be a little different in different places
Speaker 1: throughout the country, but your realtor really is your asset
Speaker 1: when deciding what a strong, clean offer is all at
Speaker 1: all is going to take a bit more fortitude in
Speaker 1: this market for a buyer. It just there's just a
Speaker 1: lot more stacked against It's that it's not saying don't buy,
Speaker 1: but certainly consider all these things that are being said
Speaker 1: and talked about in these articles of whether or not
Speaker 1: now is the exact right time for you. You know,
Speaker 1: some of us it's not an option, and we for
Speaker 1: various reasons it is necessary and so this episodes for you.
Speaker 1: But if you don't have to, or or you're not
Speaker 1: sure that you're cut out for what all it's gonna
Speaker 1: take right now, just consider that number nine is talking
Speaker 1: about including an offer letter. So this was something new
Speaker 1: to me. I don't know within the past few years
Speaker 1: that people might take a more personalized approach and write
Speaker 1: a letter to the seller of what attracted to them
Speaker 1: to the property, mentioning personal touches that you admire, sharing
Speaker 1: some of the memories that you hope to make in
Speaker 1: the new home. And it's definitely and this is not
Speaker 1: a part of the homebuying process that you have to do.
Speaker 1: Some people choose to some people don't. I know, Jen,
Speaker 1: you are not a fan of this, so curious to
Speaker 1: hear your perspective. So I had asked, I was like,
Speaker 1: would it help if we did this? And our realtorm
Speaker 1: made a really good point is that there everybody is
Speaker 1: advising against it because it it actually goes against fair
Speaker 1: housing laws, or it can go against fair housing laws
Speaker 1: where if somebody doesn't want somebody of a certain religion
Speaker 1: on their street, or of a certain race, or of
Speaker 1: a certain like interest group, I don't know, if they
Speaker 1: see that in the letter, it could actually hurt their
Speaker 1: chances um or it can um impede diversity. So if
Speaker 1: somebody wants somebody who looks like them entering the neighborhood
Speaker 1: and they see that through a letter and choose them
Speaker 1: versus somebody who maybe of um a different you know,
Speaker 1: religion or race, that could slow down um diversity coming
Speaker 1: to neighborhoods. And so really it's not a great idea.
Speaker 1: Realtors are starting to advise against it some if they do,
Speaker 1: if the buyer really does want to send a letter,
Speaker 1: they'll redact um names and just make it very generalized.
Speaker 1: But it doesn't really help anymore. Realtors are advising against it,
Speaker 1: and I think there's probably going to be he are
Speaker 1: realtor thought there was going to be something nun that
Speaker 1: actually stopped it from happening. Yeah, prohibitive so nice. Yeah.
Speaker 1: Ten is be ready for a bidding more and it's
Speaker 1: it's happening, it's there. Be prepared, Like we put in
Speaker 1: an offer every week for about six weeks, so be
Speaker 1: be prepared to do that for at least a few months.
Speaker 1: And just get up your resolve because remember that first
Speaker 1: part one, Step one is make your lists of non negotiables,
Speaker 1: and you need to be prepared to, you know, to
Speaker 1: not put in an offer on something that like doesn't
Speaker 1: meet those non negotiables. The more you get into it,
Speaker 1: the less the more negotiable those non negotiables become. But
Speaker 1: you just need you need to be prepared to put
Speaker 1: in a bunch of offers and to just keep doing it.
Speaker 1: That said, too, though, I think it's important for you
Speaker 1: to be clear on what is the top of your budget.
Speaker 1: Because I think through this process and going through many
Speaker 1: bidding wars, folks can get really worn down. But please
Speaker 1: don't find yourself house poor at the end of this
Speaker 1: having maybegotten at home, but you actually can't afford it
Speaker 1: even if you were approved for it. So that blends
Speaker 1: into number eleven and twelve. Be patient and be persistent.
Speaker 1: I think there's a whole other emotional self care and
Speaker 1: regulation piece that's connected to this, because it really can
Speaker 1: be an emotional roller coaster, not only for your your home,
Speaker 1: your living space, but also investing a ton of money
Speaker 1: into buying a home. There's a whole lot of emotional, relational, physical,
Speaker 1: mental dynamics that go into this. So also engaging in
Speaker 1: some of those exercises that are going to help you
Speaker 1: to maintain that per assistance, maintain that patience knowing that
Speaker 1: something is going to work out, and it might seem
Speaker 1: devastating when the place that you thought was perfect doesn't
Speaker 1: work out, but finding something that's going to be anchoring
Speaker 1: to you through the process. Because home buying is stressful
Speaker 1: to begin with, and again we are in a really
Speaker 1: extra difficult housing market for buyers, So practice some of
Speaker 1: those resilience pieces that will carry you through this time,
Speaker 1: um and hopefully find a support network through it as well. Yeah,
Speaker 1: and if you, I mean, if you want to buy
Speaker 1: a house, you will buy a house. It will take time,
Speaker 1: it will take perseverance, but you can do it. And
Speaker 1: I'm not going to say don't buy a house. I
Speaker 1: just bought a second house, like and I didn't need
Speaker 1: to do that and I just did it. So like,
Speaker 1: I'm not going to tell you not to buy a
Speaker 1: house in this market. It's just you have to be
Speaker 1: I just we just want you to be prepared. I
Speaker 1: wrote down here offer lose cry, drink wine, start again.
Speaker 1: That was my process pretty much every week. And yeah,
Speaker 1: and then I needed even more wine when it came
Speaker 1: time to get approved for the mortgage. That is difficult,
Speaker 1: they really, I mean, lending is super I mean because
Speaker 1: everybody wants a house. There's a shortage of housing, and
Speaker 1: so they're like they don't care. They just they want
Speaker 1: everything from you. They want to make sure you're the
Speaker 1: best possible candidate because if they don't get you, they
Speaker 1: can get someone with more money, or they can get
Speaker 1: an all cash offer. So like lending is I mean
Speaker 1: very intense right now, so they want everything from you,
Speaker 1: and they want everything at the last minute. So know
Speaker 1: that on both of the houses we were under contract
Speaker 1: on two houses two and a half before we got ours.
Speaker 1: Everything was left to the last minut it. So, speaking
Speaker 1: of lending, we wanted to spend a few minutes. We
Speaker 1: won't hounded on this for too much longer because you've
Speaker 1: pretty much these are all the tips, but we wanted
Speaker 1: to spend a few minutes looking at a second article
Speaker 1: called Housing Market Predictions for and so this was written.
Speaker 1: UM this is a collection of expert studies and data
Speaker 1: across multiple different real estate data companies, updated monthly. This
Speaker 1: one was updated in April, I think because we just
Speaker 1: finished May when we're recording this. But so, yeah, we're
Speaker 1: not going to go super deep into this, but we
Speaker 1: did want to touch on a few of the housing
Speaker 1: market forecasts. Why the markets hot, why it's going to
Speaker 1: cool down but not um but not crash essentially, and
Speaker 1: why why XP it's predict this. So, Jill, I know
Speaker 1: you did not love this article. I just I mean,
Speaker 1: I think we we know, we don't know, none of
Speaker 1: us know for sure, and I think sometimes with predictions
Speaker 1: there can be various motivations for the predictions that people
Speaker 1: make given their interests, and what is going to be
Speaker 1: useful for them to say. But I think it's worth
Speaker 1: listening to a lot of these different voices to inform
Speaker 1: our own decision making, because if we are of the
Speaker 1: mindset of, well, soon something's going to have to happen
Speaker 1: and I'm gonna be able to scoop up homes for
Speaker 1: dirt cheap, that that might not be the case. Like
Speaker 1: if if we're holding out, we're deciding not to buy
Speaker 1: right now, it can be helpful to know, well, what
Speaker 1: are some of the experts saying related to this. So yeah,
Speaker 1: on the one hand, I'm like, we don't know, None
Speaker 1: of us know. We've got to do the best we
Speaker 1: can with what we've given and then ledge that we have.
Speaker 1: But it can be valuable to look at it. So
Speaker 1: they're looking at the next three years of what what
Speaker 1: we think is going to happen with the housing market,
Speaker 1: what they think is going to happen with the housing market,
Speaker 1: And it can be informative of if you're holding out
Speaker 1: because you think something is going to change drastically, well,
Speaker 1: experts are saying it might not, and so you know,
Speaker 1: we're just read off a couple of quotes that stand
Speaker 1: out from this article, the one being that explaining that
Speaker 1: prices are rising because of the mismatch between supply and demand,
Speaker 1: but that doesn't mean that it's a housing bubble. That
Speaker 1: previously many people were predicting that the pandemic would cause
Speaker 1: a housing crash similar to what we saw during the
Speaker 1: Great Depression, but that hasn't happened, and experts are saying
Speaker 1: it most likely will not happen, and that the market
Speaker 1: is in far better shape today than it was a
Speaker 1: decade ago, and that the housing industry has had a
Speaker 1: boom in the last year, with the largest annual gain
Speaker 1: in a single family house values and rentals, historically low
Speaker 1: for closure rates, highest number of home sales in fifteen years.
Speaker 1: So just kind of indicating that it doesn't look like
Speaker 1: much is going to change. We might see some things
Speaker 1: that might be a bit more favorable, but if you're
Speaker 1: waiting to be able to scoop up homes for under
Speaker 1: two hundred thousand, I don't know, it just might not
Speaker 1: might not be a reality. Yeah, I heard UH family
Speaker 1: function a few months ago that um Travis's uncle said
Speaker 1: that he was waiting for another crash to Um for
Speaker 1: he told his daughter not to buy a house to
Speaker 1: wait for the next crash, And I'm sitting there like
Speaker 1: this is not great advice. Like highs and lows happen.
Speaker 1: We see it in this we're seeing in the stock market,
Speaker 1: and we see it historically. So there will be a
Speaker 1: slow down and possibly even a correction. But there's a
Speaker 1: lot of legislation that's been put in place and a
Speaker 1: lot of money that's been put into place to ensure
Speaker 1: what happened in two thousand eight does not happen again.
Speaker 1: So we won't see something like that. We would see
Speaker 1: something different. And so I think the biggest I mean,
Speaker 1: let's not look at speculation. We'll just look at facts
Speaker 1: that the article talks about is that millennials have been
Speaker 1: delayed into home buying. And there's more millennials than any
Speaker 1: other generation currently um buying houses, and there their first
Speaker 1: time home buyers. So there is there has been a
Speaker 1: decade long shortage of new home production. Uh, and so
Speaker 1: there is a discrepancy between lower inventory of starter homes
Speaker 1: essentially and more millennials trying to buy homes right now.
Speaker 1: So normally it's just kind of paces um, but a
Speaker 1: lot of millennials have been delayed, and so a lot
Speaker 1: more are looking to buy in one cramped period of time.
Speaker 1: And then also there wasn't a lot going on in
Speaker 1: home sales um, you know, for for reasons we know,
Speaker 1: so there's also a little catch up that kind of
Speaker 1: plays into why there was the highest number of home
Speaker 1: sales in So those things all combined is that the
Speaker 1: decade long shortage of new new building and all the
Speaker 1: millennials trying to buy, and the pandemic. So this all
Speaker 1: has created a perfect storm of to to create the
Speaker 1: hot market. And so we know that it also takes
Speaker 1: time to build new houses. There's also a labor shortage,
Speaker 1: so the speed at which houses are still being built
Speaker 1: right now still isn't fast enough to close that gap
Speaker 1: um in the next three years. That's the prediction that
Speaker 1: could change too. But so and like I said, it's
Speaker 1: very difficult to get a mortgage. You have to be
Speaker 1: very qualified, and of houses are being paid for in cash.
Speaker 1: So the factors that were there for the last crash
Speaker 1: we saw are not there now. So it would have
Speaker 1: to be something different and unique that would bring on
Speaker 1: a crash. So like the things we're seeing now are
Speaker 1: indicators of of one, and then we have the rising
Speaker 1: mortgage rates, which would in a normal sense say like, oh,
Speaker 1: it's gonna you know, turn into a um a buyer's
Speaker 1: market now. But again, because of the low inventory, so
Speaker 1: many houses being paid for in cash, it's just not
Speaker 1: it's not The experts say, it's not enough to flip it. Yeah,
Speaker 1: we were chatting a little bit about this before we
Speaker 1: pressed record, and I think that helps to answer some
Speaker 1: of my questions around why are we seeing this nationwide
Speaker 1: within the states of what people are calling a housing shortage.
Speaker 1: It makes sense in the Tampa Bay area where you
Speaker 1: and I are, everyone wants to move to the amazing
Speaker 1: weather and beautiful turquoise water, but like, why is Indiana
Speaker 1: experiencing this too? Indiana is great too for their own reasons,
Speaker 1: and and that that helps to inform why are we
Speaker 1: seeing what we're seeing, so that we can wrap our
Speaker 1: heads around it makes sense of it again, be informed
Speaker 1: with the decisions that we're making of Okay, this is why,
Speaker 1: rather than just feeling so out of control and like
Speaker 1: what's going on? Because there's a lot of that that's
Speaker 1: happening when we're trying to buy currently that can be
Speaker 1: really frustrating. So even just having an understanding of how
Speaker 1: did we find ourselves in this place, what's the trajectory
Speaker 1: moving forward? What do we see could be some helpful shifts?
Speaker 1: What not shift? So then how do I want to
Speaker 1: shift around that with what is inside my control? So
Speaker 1: all of this is just informative, I think, and we'll see,
Speaker 1: we'll see what happens. But you know, it can be
Speaker 1: helpful to know that folks are not predicting a housing
Speaker 1: market crash like what we've seen in the past, and
Speaker 1: you know, there's real reasons behind what we're seeing. It's
Speaker 1: not just arbitrary because of the number of millennials that
Speaker 1: are first time home buyers right now. Yeah, but I'll
Speaker 1: also point out that only in April, only eight percent
Speaker 1: of buyers were first time buyers, while seventeen percent were
Speaker 1: investors or second home buyers. And historically, first time buyers
Speaker 1: account for approximately forty of the market. And so we
Speaker 1: are seeing a shift to more hedge funds and corporations
Speaker 1: buying usually that that's seventeen number, um I saw it
Speaker 1: in somewhere else in this article is about twelve per cent,
Speaker 1: So that is increasing. And while first time home buying
Speaker 1: is decreasing, and I can't tell you the reason for that, um,
Speaker 1: But I can tell you what I've experienced is that
Speaker 1: first time homebuyers don't have a chance in this market
Speaker 1: for what they can afford because investors are buying everything.
Speaker 1: Like we had to buy something that was definitely not
Speaker 1: a starter home in order to be able to get
Speaker 1: back into the market. Uh. And so all I want
Speaker 1: to say is like, stop selling to hedge funds, tell
Speaker 1: your parents, tell your parents friends, stop selling new corporations,
Speaker 1: because that's really where this is coming coming to. Is
Speaker 1: people are listening to the commercials on the radio and
Speaker 1: TV and the flyers, and they quit clothes, all cash,
Speaker 1: no hassles, Audi, YadA, and it seems really easy and
Speaker 1: it is, um. But it's created this shift where it
Speaker 1: is easier for an investor to get a house than
Speaker 1: it is for a first time home buyer. Um. And
Speaker 1: So that's I mean, that's the reality. And I don't
Speaker 1: know what that's going to do to the market. I
Speaker 1: it's not sustainable. I just I don't know what it's
Speaker 1: going to do to the market. UM. But and yeah,
Speaker 1: foreclosures and short sales are less than one percent of
Speaker 1: sales in April two so which is down um from
Speaker 1: from two percent in April. So it's there's no room
Speaker 1: for I can't speculate on what's going to happen, but
Speaker 1: those are facts. There's some there's some social change pieces,
Speaker 1: policy change pieces, activism pieces that are certainly wrapped up
Speaker 1: in this and what you're highlighting gen and at the
Speaker 1: end of the day, everything that makes frugality amazing is
Speaker 1: still amazing. Implementing problem solving and research and making informed,
Speaker 1: wise good steward and decisions can get you in a
Speaker 1: home if that is what is going to be best
Speaker 1: case scenario for you. We're just in some ways commiserating
Speaker 1: with those of you who are finding yourselves in that
Speaker 1: process and recognizing the emotional toilet can take and finding
Speaker 1: a community around you, and then also finding some ways
Speaker 1: to resolve some of the more macro level issues that
Speaker 1: we're noticing with the housing market. So a lot of
Speaker 1: different layers, but if you're an individual listening, it is possible,
Speaker 1: but recognize the fortitude and grit that it will take
Speaker 1: speaking of something that doesn't require much fortitude and grit
Speaker 1: and just gives us the joy that we need to
Speaker 1: keep going. It is the respite the bill of the week.
Speaker 1: That's right, it's time for the best minute of your
Speaker 1: entire week. Maybe a baby was born and his name
Speaker 1: is William. Maybe you've paid off your mortgage. Maybe your
Speaker 1: car died and you're happy to not have to pay
Speaker 1: that bill anymore. That's bills, Buffalo bills, Bill Clinton, this
Speaker 1: is the bill of the week. Hello jan Hello Jill. Hi,
Speaker 1: my name is Emily. I've been listening to for a
Speaker 1: bill I don't know three months now, and my bill
Speaker 1: of the week it is comprehensive car insurance. I had
Speaker 1: a dear hit the side of my car and the
Speaker 1: the cost of making the car look pretty was four
Speaker 1: thousand dollars that I didn't have to pay because I've
Speaker 1: been paying comprehensive car insurance. Have a great week. This
Speaker 1: is the second bill in a a row about car insurance,
Speaker 1: and I love it because I also pay for full
Speaker 1: coverage car insurance even though I don't have to, and
Speaker 1: it's for stuff like this, I mean, not necessarily DearS,
Speaker 1: but other unforeseeables and it's just dear. And that's how
Speaker 1: you know. Jen grew up in Florida, not around here.
Speaker 1: It's both the singular and the plural. How's that for
Speaker 1: the English language, Emily, How amazing. I'm so glad that
Speaker 1: your car looks beautiful again and that you don't have
Speaker 1: to pay that high price because of the monthly payments
Speaker 1: you made, and that you're okay after that run in
Speaker 1: with the deer. At least it sounds like you are,
Speaker 1: if you're able to call it in your bill of
Speaker 1: the week. Oh, if you're listening and you want to
Speaker 1: submit your bill of the week, if it's about deer
Speaker 1: or car cars, that one is plural. Dear car. Visit
Speaker 1: Fringle Friends podcast dot com, slash bill, leave us your bill. No,
Speaker 1: it's time for so let's talk about one tip about
Speaker 1: the home buying process. Nobody told you that you wish
Speaker 1: you'd known, Jill, I wish i'd known about the stamps.
Speaker 1: There's nothing I could have done about it, and just
Speaker 1: wish I would have known about the stamps. Anyone on
Speaker 1: the stamp bought a home. I still don't know what
Speaker 1: they are, Jen, I think people have tried to explain
Speaker 1: it to me, but I just remember seeing this line,
Speaker 1: item after line it I'm listing out stamps and they
Speaker 1: were expensive to like four dollars for some stamps, And
Speaker 1: I'm thinking, are these postage stamps, sticker stamps? Are these
Speaker 1: just ink pad stamp? What in the world kind of
Speaker 1: stamps are we talking about? Are they made of gold, diamonds,
Speaker 1: sapphire pearls? I don't know, but I think the main
Speaker 1: thing is that everything is negotiable except except for the stamp. Well, yeah,
Speaker 1: so interest rate was negotiable, how much we pay real
Speaker 1: ittor was negotiable price at the home, although in nowadays
Speaker 1: not totally and it wasn't totally for us when the
Speaker 1: house was for sale by owner. But just know that
Speaker 1: we can implement some of these negotiation things, and even
Speaker 1: if the price of the home isn't negotiable, maybe there's
Speaker 1: some other things that we can weave in to be
Speaker 1: able to get what we need, and maybe just negotiating
Speaker 1: with ourselves at the end of the day's what what
Speaker 1: we need. But also I think I was really surprised
Speaker 1: by how much cash I needed to just close. I
Speaker 1: think I thought that I was estimating really liberally. I thought, oh,
Speaker 1: I'm just gonna attack on thousands of dollars, and it
Speaker 1: just still wasn't enough. By the time the stamps came
Speaker 1: around and paying different I can't even remember what all
Speaker 1: it was. It's just be prepared to have a lot
Speaker 1: of cash on hand. It's not just the down payment.
Speaker 1: Yeah uh mine is. You are not married to your
Speaker 1: real turn like your first realtor you pick you try
Speaker 1: out realtor date them and see who cares the most
Speaker 1: about you, who cares the most about your business. If
Speaker 1: you don't get good vibes, drop them like you're I mean,
Speaker 1: just because they looked at a few houses with you
Speaker 1: does not mean you're obligated to stick with them. Choose
Speaker 1: one that will go to bat for you and is
Speaker 1: available during working like they're working hours are after work
Speaker 1: and weekends, so they need to be available to see
Speaker 1: houses any day of the week that you are available
Speaker 1: any day of the weekend, Like maybe not at midnight,
Speaker 1: that's fine, but like any other time you're available. So
Speaker 1: just I mean, don't go with a real tur that
Speaker 1: doesn't drive well with you. Let us know how you
Speaker 1: all are navigating this housing market. If you've got more
Speaker 1: tips and thanks everyone for listening. Many of you know
Speaker 1: we have a private community where we do monthly money
Speaker 1: challenges and we offer accountability groups so more of that community.
Speaker 1: So if you are in the first time homebuying process,
Speaker 1: we're here for you. Come, come get at this community.
Speaker 1: And we want to congratulate one of our members for
Speaker 1: a big win that they just experienced. This comes from Vanessa,
Speaker 1: who says, I've been making around two hundred to three
Speaker 1: hundred dollars per week with Corner Shop, and I've been
Speaker 1: funding my future trip to Niagara with it. My best
Speaker 1: friend is in the midst of a separation, so I
Speaker 1: wanted to make sure everything was covered ahead of ahead
Speaker 1: of time, even restaurants. I knew she wouldn't accept me
Speaker 1: paying for everything, but I told her, look, take five
Speaker 1: years paying me back if you'd like, but know that
Speaker 1: it's all taking care of already, so we can enjoy
Speaker 1: our trip and not worry about the money. So I'm
Speaker 1: glad I could do that for her, and it's making
Speaker 1: it less stressful for me as well. That generosity amazing, Vanessa. Yes,
Speaker 1: we are big proponents for generosity and serving and helping another.
Speaker 1: So Vanessa, congrats. And Vanessa recently just met her accountability
Speaker 1: partner in real life. Vanessa and Christie got together and
Speaker 1: took a picture and posted it and it was like
Speaker 1: the dream of my life. Uh so, thanks for sharing that, Vanessa,
Speaker 1: Thanks for listening. If you want to check out our
Speaker 1: monthly challenge community had to Frugal Friends podcast dot com
Speaker 1: slash club to see what challenge we have coming up next.
Speaker 1: See You Next Week by Frugal Friends is produced by
Speaker 1: Eric Sirianni