Buying A Home Part 2: There’s A LOT To Think About

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[00:00:17] And now here's your host Lyster.

[00:00:21] A recent episode talking about

[00:00:24] purchasing, property purchasing

[00:00:26] seemed to be fairly popular and

[00:00:29] I

[00:00:30] Committed that I was going to elaborate a little bit based on other information that was not directly related to my purchase, but just overall

[00:00:39] History walk through time etc and so on and I will just preface I am

[00:00:47] Battling something at the moment. So there may be awkward pauses. I apologize, but it's what it is. So

[00:00:54] Just to elaborate further I made the statement

[00:00:58] I said

[00:01:00] You have to understand when you're about to buy property, home, condo, town, whatever

[00:01:06] Or even an apartment. You have to stop and think about what you really need

[00:01:11] If I think back

[00:01:14] That was one thing I could do better, but I didn't have

[00:01:18] arguably

[00:01:20] The school system doesn't educate you these things

[00:01:22] They don't tell you about what you need to know to actually survive in the real world

[00:01:27] When you're in elementary school, you learn the basics

[00:01:30] Arguably what you learned in elementary didn't probably change since I went

[00:01:34] But what you learn in elementary is the vast majority of what you need to know. I learned later

[00:01:40] There are some kids who were never taught about currency actual cash and that's sad

[00:01:46] To not know your denominations. I literally just had a kid

[00:01:51] didn't know all you got to do is pull out two dimes and a nickel and

[00:01:56] Four pennies or a quarter and four pennies either way he struggled with it

[00:02:01] so

[00:02:02] You should be taught these things because this myth that everything is just gonna be a swipe of the card away is just that

[00:02:10] But also you have to understand if you don't know how to count currency and denominations

[00:02:15] How can you be on the lookout for when you get ripped off when you go to these places?

[00:02:19] I think there's an assumption that everything is more accurate because there's computers

[00:02:23] And so they don't pay attention to the money flowing out of your account. You might be surprised to learn

[00:02:29] when you're swiping the card your

[00:02:32] You don't realize it but subconsciously you're gonna spend more money because it's easier to spend you have cash

[00:02:39] You can only spend what you carry with you. You should not carry vast majority cash

[00:02:44] So cash helps constrain budget

[00:02:47] The same concept applies when you're going to go purchase a home

[00:02:51] There you're dealing with checks you're dealing with bank transfers

[00:02:55] I know that we're in a world where Venmo and cash app and all this garbage is kind of at front, but

[00:03:02] You should be aware of how checks work. You should be aware of how money orders work

[00:03:06] You should be aware of how bank transfers work

[00:03:08] You should be aware how money grant works how Western Union works

[00:03:12] You should be aware about basic bank interactions that have to do with cash

[00:03:17] Because when you go to do this purchase and even apartments

[00:03:21] But when you go to do this purchase, you're gonna be asked for one of these forms of tinder

[00:03:25] You're not gonna use your phone to get away with it in an apartment

[00:03:30] Usually not always but usually they're gonna want first months last months some deposit something

[00:03:37] And they're gonna want it not always but usually is like a money order

[00:03:41] Did you know that you can get a money order from a bank?

[00:03:45] Did you know that you can get a money order from the postal office?

[00:03:49] Right. Did you know that you can do that? Maybe it didn't

[00:03:52] Did you know that if you can find a local money tree, they do money orders

[00:03:57] Did you know that your bank even if it's not where you have your funds stored

[00:04:01] But you know your local bank and probably do money orders

[00:04:04] Do you know the difference between a bank check a cashier's check at a money order?

[00:04:10] Chances are a lot of this is down in the weeds and that's again a failure of our education system

[00:04:16] Because these are more important things that I think you should be learning in high school

[00:04:21] Versus the garbage they saddle you with but that's my opinion

[00:04:25] if you have to produce a cashier's check, which sometimes you may have to a

[00:04:30] Cashier's check essentially says the bank is going to guarantee that money

[00:04:35] Many

[00:04:36] organizations prefer cashier's checks over regular checks that you would write or a bank check which is nothing more than a

[00:04:43] personal check that the bank writes for you

[00:04:46] because the certified check the cashier's check is

[00:04:50] essentially guaranteed funds and

[00:04:52] They like guaranteed money a money order should be guaranteed money

[00:04:57] Not every organization treats it as guaranteed money

[00:05:01] It's critical you understand when each one needs to apply and

[00:05:06] The limits of each the money order has dollar limits

[00:05:09] If it's a cashier's check certain banks you have to bank with them for you to get access to it

[00:05:15] So on bank transfers and I do not refer to Venmo or cash app. I'm talking about ACH

[00:05:21] The idea that I can go to my bank and just request a regular transfer

[00:05:25] It takes 24 hours or I can do a wire

[00:05:29] Usually wires about an hour. Maybe two

[00:05:31] These are transferring from your bank to another bank not from your phone

[00:05:35] Your phone may have an app that lets you do it. The point is your phone's not really doing the transaction

[00:05:41] It's done at the bank by humans because it's done by humans and not by technology

[00:05:47] These are generally trusted forms of money transfer

[00:05:51] All of what I just described again

[00:05:53] These are things that your high school should be teaching and they don't I know they don't

[00:05:57] How to count currency your elementary should be teaching if they don't anymore

[00:06:02] Because it certainly doesn't seem like it because I see less and less kids knowing how to count currency, which is troubling to me

[00:06:09] Knowing how to write a check knowing how to balance an account

[00:06:12] To me and a rushing away from the plastic to me. That's what we should teach is the fundamentals for how to do things

[00:06:20] and we don't so then what happens when you grow up become 18 or older and

[00:06:26] Now you're ready to sit on your own. Well first it's a terrifying time in it. You're a little afraid to go out on your own

[00:06:32] I

[00:06:34] Was excited to go out on my own. I was excited to basically say I'm not gonna look back

[00:06:39] Because I knew that would force me to step up

[00:06:43] That's missing today's youth the fear is kind of cultivated

[00:06:48] You know, we celebrate that fear we coddle. I there are stories of kids stay at home till like 30 something years old

[00:06:54] That's mind-boggling to me, but it is what it is. I've known people that have done that

[00:06:59] I don't understand it cuz I don't know how you could tolerate that good being told

[00:07:03] What to do by your parents because that's what's going to happen all the way through because you're in their home

[00:07:09] Right and essentially you're a freeloader and some kids are actually happy doing so I was not gonna be that I

[00:07:15] Did everything in my power to get out of there because it was gonna force me to step up and I knew it was

[00:07:20] Gonna help long term and I think it did. So what was the first step? Well, my first step was the bad step

[00:07:27] My first step happened randomly. I met a girl and I forget exactly how we met

[00:07:34] I know is a blind setup, but I forget the specifics

[00:07:37] blind setup talked around the phone really sweet gal and

[00:07:41] We went on a first date to like some haunted house something or other

[00:07:45] sure

[00:07:46] Okay, seem cool. This is where I learned that she was under lock and key and there's a long story behind this

[00:07:53] But the point is she asked me to move in with her. Okay fine. It got me out of the home

[00:07:57] I didn't move everything out, but I moved the core essentials and some things I regret having done

[00:08:03] but because of this lock and key she was under wasn't gonna work but what it gave me was a taste of what it was like a

[00:08:11] Sample of what it was like to not be in my parents own and to be kind of on my own and

[00:08:17] Calling the shots and I liked what I felt. I liked the way it worked

[00:08:22] That may be a suggestion if you're younger

[00:08:25] To get a sample of it

[00:08:27] Possibly consider renting a room from someone else so that you're out of that home

[00:08:32] You will have to answer to that person eventually but it gets you away from your parents house

[00:08:37] Let's you sample what it's like to be on your own obviously you need to be 18

[00:08:42] So that you can be or an emancipated minor so that you can take advantage of it

[00:08:46] The point is if you get an opportunity to do it that may help you tiptoe into and feel what it's like

[00:08:52] Some will still say I don't like this. I like that safety. I like that that certainty

[00:08:58] but is it really certainty or

[00:09:02] Potentially, are you a burden?

[00:09:04] Consider if you're a burden if you're a burden and they'll not tell you that you're a burden some will but most won't

[00:09:11] But think you think are you a burden? Are you burdening them if you are?

[00:09:16] Why do you want that? Why do you want to continue to do?

[00:09:19] How is that serving them any when all it's asking of you is to be autonomous and be independent?

[00:09:26] What some will do which I didn't but some will do is they will shack up with somebody they're dating

[00:09:31] I moved in with them, but I was paying you know, it's not free

[00:09:36] You know, so sometimes it's like okay

[00:09:38] I will find a significant other and I'll shack up with them or I'll go to college and we're going splits on the rent

[00:09:45] Or dorms right all of these are viable ways

[00:09:49] to move out on your own and

[00:09:51] Kind of test the waters and see what it's like and then eventually cut the umbilical cord

[00:09:56] No problem with it

[00:09:58] But if you're always sharing if you're always splitting if the cost is always born

[00:10:05] Partially by somebody else you never understand what it really is gonna take for you to self-sustain

[00:10:12] The reason that matters is because if something happens to those other people

[00:10:16] You're gonna be screwed and not know what to do about it. I

[00:10:19] think

[00:10:21] Society has lost the idea of the what-ifs or the focus on the what-ifs

[00:10:27] How to build in a way build yourself in a way where you're prepared for the what-ifs if

[00:10:34] Let's say you have two or three people friends and you decide to be roomies and you split the rent three ways or something

[00:10:41] So okay my rents only 300 bucks a month and you work at Burger King. So that works for you, right?

[00:10:47] Well, what happens if one of those friends loses their job?

[00:10:51] Are you gonna be able to pick up their slack which is gonna be an extra hundred fifty bucks on each of you

[00:10:57] Or is that gonna cause contention between you because of whatever happened? What if that friend?

[00:11:03] Decides to shack up with their significant other

[00:11:06] What if that friend dies?

[00:11:08] My point is are you thinking about the what-if situations that drive your decision?

[00:11:14] To go in that way see I never went in the split route the one time

[00:11:20] I rented a room and it was a higher upper middle class family

[00:11:26] And I rented a room in the home

[00:11:27] So I am a shared split but I didn't stay there forever nor was I going to because I knew it was gonna be a nightmare

[00:11:33] There was all sorts of drama with that that I'm not gonna bore you here

[00:11:37] But the point is I already committed

[00:11:38] I wasn't gonna stay there because it what what happens if these other two move out and one of them was a foreign

[00:11:43] exchange student never there

[00:11:46] There's all sorts of ifs that I had to think about and then there was car repairs and work

[00:11:52] How much money I was or wasn't making

[00:11:54] All different things that I had to really say this is not gonna be a long-term thing

[00:11:59] I'm only here because I need to kind of bridge until I can get to my home. I

[00:12:04] Get to my own

[00:12:06] Now it's on me to start thinking about rent not just the basics of rent because what I didn't know at the time

[00:12:13] Was they'll happily raise your rent whatever they feel like it deep deep deep. I had to think about food and

[00:12:21] Not just fast food I had to think about gas more than I did because I was further away from work I

[00:12:28] Had to think about all the other things I needed to do for my studying and everything else that now I'm on the hook for

[00:12:34] So the rent bill was nothing

[00:12:37] There's everything else that was going into it

[00:12:40] If you're about to break out in your own and I don't think anybody listening to show is but maybe you are

[00:12:46] You're about to break out in your own. I

[00:12:48] Would recommend the first question you ask yourself is is this really what I want

[00:12:54] Whatever that is. So if it's an apartment if it's renting a room if it's buying something

[00:13:01] Is this really what I want some of you may come from families where you have the luxury of buying something. I didn't

[00:13:08] Just wasn't gonna happen. Some of you may have the luxury of working in an area

[00:13:13] With a really low cost of living but you work for a company that pays you a decent amount

[00:13:17] I

[00:13:18] didn't

[00:13:19] So everybody's situation is gonna be different

[00:13:23] Everybody's gonna have certain advantages and disadvantages that they have to navigate around. Let's assume

[00:13:29] That you're in that situation of buying a home

[00:13:32] And in the last episode I talked about my journey of buying a home

[00:13:36] Which I've learned in the place that I'm at basically the bottom line is everybody plays hardball

[00:13:44] everything so

[00:13:46] Now that I know the game I know how to play it

[00:13:49] I know how to play hardball and there's a lot that I know about home buying and selling and I'm using that knowledge

[00:13:55] Many people don't ever get because our school system doesn't teach you about these kinds

[00:13:59] But I learned

[00:14:01] Everybody just hardballs. So I talked about the other place and

[00:14:05] That went back down. They basically said nope. We're not taking your offer

[00:14:10] And I said, okay kick rocks and then they came back and said oh well we'll get within

[00:14:15] $2,000 what you want and I told him to kick rocks again

[00:14:18] Because even at that one I still it was I didn't want the house at all. It wasn't that good

[00:14:23] It's not it was the land. It was on like half an acre of land

[00:14:27] I wanted the land not the house house was garbage

[00:14:30] So I told him to kick rocks. Well, then I got another one and this other one

[00:14:34] Visually, I talked about how it reminds me my grandparents house. It's not a great house, but it's certainly not terrible

[00:14:41] It's you know, it's workable but it needs a lot of work

[00:14:45] But it's livable. I would say there's some things that I've checked but it's generally livable

[00:14:50] But there were things I want to fix and I wanted them to go part on it and I said here's what I'm offering

[00:14:56] You eat part of it. I'll eat part of it and we'll meet in the middle and

[00:15:00] The way I position the offer and this is kind of one of those things

[00:15:03] I'll talk about here the way I position the offer when you are doing the home

[00:15:08] The first thing you should always do always

[00:15:12] Is get your money in order get your money, right? When I say get your money, right?

[00:15:18] You need to make sure you have a solid reliable

[00:15:22] Provable source of recurrent income of a certain level that proves it's easy for you to make the monthly payments

[00:15:31] For the most part as

[00:15:33] Long as whatever the monthly payment is gonna be long as you're making more than like three times that amount

[00:15:39] ish the bank will work with you I

[00:15:43] Recommended having a 20% down. I don't suggest that it's easy to do it

[00:15:47] I'm saying I recommend doing it because it gives you power. It gives you leverage

[00:15:53] When you come in to the offer

[00:15:56] It's it's written as part of the offer you're coming in saying I'm a I got a loan and I'm 20%

[00:16:03] down in on the loan

[00:16:06] Showing I got money to work this the only thing more appealing is gonna be a cash buyer

[00:16:12] The cash buyer is somebody who and that might not be somebody super wealthy. It could be just somebody who had a home

[00:16:18] There are stories of homes like in Southern, California before it built out where they bought it for like

[00:16:24] $16,000 and they sold it for like

[00:16:28] $800,000 these are real stories. So it's a different time. My point is that people that bought way back

[00:16:35] Right at the point where a home was starting to appreciate and they made a mint on the home

[00:16:41] They can just pocket that extra as the equity when they sell it and then go buy something that they really want

[00:16:47] Those are can be cash buyers. You're coming in saying I already got the money on deck. We're ready to go

[00:16:52] There's no loan there's nothing now the downside of a cash buyer the only downside I would argue of a cash buyer

[00:17:00] With a cash buyer, they're generally less likely to accept your asking price fresh out the gate

[00:17:07] They're gonna try to negotiate it down as they should you know

[00:17:11] You should always try to get a deal

[00:17:12] Shouldn't try to pay full price unless it's perfect. None of the homes are perfect. I'll talk about that in a second

[00:17:18] with a loan buyer

[00:17:20] They're more likely to be closer to the price you want or

[00:17:25] They may ask for some discounts, but it's for a reason, you know, there's something with the house we find

[00:17:30] There's something with the neighborhood we find

[00:17:33] So this one this second one that I put an offer in here's the story and how it ties back

[00:17:39] Again, it's a I like the home, but it's got problems. There's things that need to be fixed

[00:17:44] It's certainly not the lowest crime area. I wouldn't say it's not a slum

[00:17:48] Nowhere close, but it's not the lowest crime area fact. There's like a Catholic Church

[00:17:53] That's like a block away and it's marked in red as far as crime zone. I've found that kind of interesting

[00:17:59] so

[00:18:00] Between that like location kind of weird things

[00:18:03] I need to get fixed and it's it's on not a crazy busy street

[00:18:07] But there's like schools that front it

[00:18:10] All of this together to me kind of brought the price down. And so I said, alright, let's cut the price and this is

[00:18:17] I'm talking about how this works you come in and then you say alright

[00:18:22] I'll offer you this and it could be they're asking or it can be a little bit lower

[00:18:27] We do an inspection. So now there you hire as the buyer somebody to come in and do a deep

[00:18:33] Inspection of certain things there's certain things

[00:18:35] They don't do unless you ask for it

[00:18:37] but high level deep inspection to understand all these things that you're gonna have to fix or

[00:18:43] There could be certain non-negotiable things, right?

[00:18:45] It's like these are non-negotiable things these have to be fixed or you just take it all on

[00:18:51] The inspection is your leverage. You can say these things need to be fixed and it's gonna be 50,000 that like in my case

[00:18:57] It was 60,000 bucks worth of fixes

[00:18:59] Okay

[00:19:00] What I normally do it's your home

[00:19:04] So you want I'm assuming you want to sell it and get out of it because that's why it's on the market

[00:19:08] All right. Well, I need you to you know, I got five on it

[00:19:12] You know and I need you to come in a little bit on your side

[00:19:14] so you come in a little bit and I'll come in a little bit and we make the deal and

[00:19:19] All this I'm describing to you if you're newish to buying you're not gonna know this stuff

[00:19:25] This is stuff that you're not taught in school

[00:19:27] Like you should be and your realtor might not be ethical enough to tell you and that's a whole different story

[00:19:33] I know because I went through this process multiple times

[00:19:35] I saw the game because I got gained on the one house. I did buy

[00:19:40] And I wasn't gonna let that happen again, so here I'm saying okay come down to this price and fix this this

[00:19:46] They basically came back and said well, we'll cut the price down but nowhere it was like three grand

[00:19:51] No, that's not gonna work for me brother. So I

[00:19:54] Said look, let's make one final deal. If it doesn't work walk away

[00:19:57] Like I'm not wasting time with this business. That's the one lesson

[00:20:02] I would tell everybody in addition to what I said

[00:20:05] Don't spend too much time unless it's like a dream home

[00:20:08] And if it's a dream home, would you still consider it a dream home?

[00:20:12] Minus the sixty thousand dollars worth of repairs because you could be looking at rose-colored

[00:20:16] Rose tinted glasses and saying well, it looks like an amazing home. That's what this one is

[00:20:21] It looks like an amazing home on the inside

[00:20:24] It's got all these amazing features and all this great stuff

[00:20:28] But it also has fundamental issues that you can't see those are gonna bite you at some point

[00:20:33] And so if you're okay

[00:20:35] Because it's got such potential you're willing to invest that that's one thing but if it's like I wouldn't say it's catastrophic

[00:20:42] But there's fire risk. There's other things to think about when I say as you go through the process

[00:20:48] You have to be thinking about these things. You got to be thinking about fire risk

[00:20:52] You can't assume that somebody that's been in a home and the older it gets the worse it is

[00:20:57] I would argue if it's a home that's older

[00:21:00] Did they do anything to upgrade these things like they should have there's things we learned

[00:21:06] Over time that should have contributed to home upgrades

[00:21:10] Asbestos asbestos was a big thing. It contributes to cancer

[00:21:14] So they should have gotten rid of it in some of the older homes. It was for fire

[00:21:20] Some did not get rid of it tiles

[00:21:22] There's tiles that have asbestos in them that were used in entryways

[00:21:26] Did they get rid of those tiles to get rid of the asbestos these are things that you won't see and so it looks nice

[00:21:33] But if let's say you have a kid and they disturb this stuff that dust can be health hazardous

[00:21:39] You might have pipes. You might have electrical that's loose or frayed or rodents or something else that you don't see

[00:21:47] So you're going in thinking it's something and it turns out to be something way worse

[00:21:53] Now I'm not trying to freak you I'm saying

[00:21:57] You have to you have to go through this process of thinking about what you really want and want to watch out for and

[00:22:04] Not just go in simply because it's a pretty home or it's in a nice neighborhood. There's more to it

[00:22:11] That may or may not affect the negotiations

[00:22:14] So when I tell them they come down on the price a little bit

[00:22:17] I need you to meet me and fix this they told me no all right fine, and then they didn't do my second offer

[00:22:24] The second offer I did was lower the reason is because and this is something they don't tell you the realtors in it

[00:22:29] But and even my realtor didn't know

[00:22:32] There's in taxes when you sell a home

[00:22:35] There's a threshold and it targets capital gains taxes

[00:22:40] So everything that you do around money is gonna be taxed at some level right you have

[00:22:45] Consumption based taxes in the form of sales taxes you have income taxes

[00:22:49] You have a state taxes if you inherit something from deceased folks

[00:22:53] You have capital gains taxes from your investments

[00:22:57] You also have capital gains taxes on the profit basically the proceeds of homes yourself

[00:23:03] So think that also you're buying a home. It could be a condo town

[00:23:07] It doesn't matter, but you're buying something with a mortgage. Let's say you pay it off

[00:23:12] Let's say you own it now free and clear you want to go sell this to somebody else

[00:23:17] Presumably you want to sell it at a profit the profit might not be anything that you did could be that the home just

[00:23:23] Appreciated like the examples I gave they buy it at 16 grand and then sell it at 800 grand

[00:23:29] They're getting nailed on capital gains taxes to sell that home

[00:23:32] And so what some will do there's tricky ways that you can you know pass down a home to a child?

[00:23:38] or other things to try to

[00:23:40] Avoid or delay those capital gains taxes, but they're gonna get you you know so

[00:23:46] I'm thinking all right. Well you guys want to sell this home

[00:23:50] Let me sweeten a little bit by cutting your tax bill down

[00:23:53] So if you go lower on the price down to this threshold it basically

[00:23:58] Nullifies your capital gains, so you don't get a check up front as much as you might want

[00:24:02] But I'm negating essentially $10,000 worth of taxes come

[00:24:07] 2025 well they completely shot me down

[00:24:10] So I told my agent all right well then tell me kick rocks

[00:24:12] And we'll just walk in and let's start the next round of home searches

[00:24:16] I have like six or seven or eight in queue that I was gonna evaluate

[00:24:21] And I'm like he was like okay. Let's go ahead and do that

[00:24:24] We did this over the weekend

[00:24:25] Then I get a contact this morning early morning

[00:24:28] And he says you know I talked to the agent because I had talked him through this whole

[00:24:32] capital gain situation to help him understand why I

[00:24:36] Basically backed out three days off scratch it was because I

[00:24:41] assumed they were

[00:24:43] Really motivated to get out of the home and that they were open to different ways of saving money

[00:24:49] Because doing it my way saves them 10,000 bucks it saves me

[00:24:55] You know 25,000 bucks we both win. That's how I'm thinking it

[00:24:59] They're likely thinking well yeah, but it's cutting into our check up front which it is

[00:25:03] I'm thinking big picture you know I'm thinking bigger and

[00:25:07] So I just explained it to him. This is why I backed out three days out

[00:25:11] he contacts me and says well I talked to the listing agent the sellers agent and

[00:25:17] They're gonna talk to their client and get them to down to this number

[00:25:22] Because my agent likely talked to their agent and explained to them what I was doing

[00:25:28] It's like I'm trying to help you guys out here, bro

[00:25:31] Because if you take my deal you're gonna save major amounts of money long term the tax bill is gonna be nothing

[00:25:38] It'd be like three grand instead of ten grand. I get what I want

[00:25:41] It's not exactly the price

[00:25:43] I'm cool with but if you come down to there I can make it work and then it just you know you're paying

[00:25:48] 15 grand

[00:25:50] Towards the fixes I got to do I still got to pay 35 grand

[00:25:54] But that's certainly better than you know having to pay the whole shot 60

[00:25:59] So that he came back and apparently the agent was able to get the bear

[00:26:04] Seller to sign off on it

[00:26:06] They sent me the form and I approved it and then it went to the bank to do all this

[00:26:10] My point and the reason I told that story

[00:26:13] They basically hardball just like the first one

[00:26:15] You know it's like the moment I say walk away all of a sudden you're coming back

[00:26:18] And you're open to my offers that you weren't open to up front, and that's cool

[00:26:23] If that's the game then I'll play it I

[00:26:25] Had the flexibility to do that because I put 20% down so I've got the leverage

[00:26:30] It's like you're probably not gonna find somebody else coming in with 20 grand 20% down

[00:26:35] The price that you want for the home we start to go through an appraisal

[00:26:39] I doubt the appraisal is gonna come at your price and

[00:26:43] Here's how sketchy this is if the appraisal is lower than the asking that you agree to

[00:26:49] You have to pay the difference out of pocket so that means hot

[00:26:52] So even if you did 20% down

[00:26:54] Let's say it's 15 grand shorter from the price

[00:26:57] You're gonna come up that 15 grand somehow between you and the seller seller is not gonna do anymore

[00:27:02] Okay, so for me

[00:27:06] I'm again looking at it as

[00:27:08] The appraisal there's no way with this level of issue that the appraisals that have come anywhere close to your price

[00:27:14] We got to come down this business. Let's come to this number and I was able to make that work

[00:27:20] We still have to do the appraisal that's presumably been ordered here soon to see if we can move this forward

[00:27:26] Assuming we have no problems, which I have no idea

[00:27:29] But assuming we still have no problems with this and we can move it forward freaking forward finally

[00:27:35] The last step then is to you know tell my current place what what I'm doing

[00:27:39] I'd already paid the rent for a couple months to buy some time to let the process flow

[00:27:44] I don't know if this is gonna work all the all my stuff's done at this point

[00:27:48] It's it's now in the hands of you know banks and agents and title and all that other stuff to see if this can move forward

[00:27:56] And bring this to a close looks like the target for that is end of May

[00:28:01] So that's right on deck for when I need to pay the next deal

[00:28:05] So I would tell the current place, you know

[00:28:07] I'll just do month-to-month and not renew the current and just stay here

[00:28:12] well

[00:28:14] You if you're going in the situation I just hit you with a bunch of stuff that's all gobbledygook to you

[00:28:22] right, but that's because I went through the process at least once and I understood how it generally flows and

[00:28:29] The only difference from state to state is here. They just play hardball straight out of scratch. They're not flexible

[00:28:36] They just play hardball which is fine

[00:28:39] And in other places they may be flexed they may be willing to work with you

[00:28:43] So I knew what to do you would not know what to do

[00:28:46] So you'll have to trust your realtor to kind of guide you it starts with knowing what you want though

[00:28:52] So you're gonna need to know are you going in as a family as in, you know, wife kids husband kids, whatever

[00:28:59] Pets right?

[00:29:01] You're gonna need to be thinking about schools if you've got kids or will have kids because that's part of the plan

[00:29:07] If you plan to have kids and you plan to be there for a while

[00:29:11] proximity to schools is important and most of the sites will tell you

[00:29:15] There are certain schools that are earmarked for your location

[00:29:18] You're gonna need to understand the scoring for those schools some schools suck. They flat-out suck, but they're the school

[00:29:25] assigned to that property I

[00:29:28] Remember when I went to high school

[00:29:31] The high school and the junior high school that were selected for my address

[00:29:35] Were both rated garbage because they were garbage I would argue

[00:29:40] That junior high wasn't terrible terrible, but it wasn't great and in high school was a catastrophic nightmare

[00:29:47] Terrible school. It may have improved since but I don't think so

[00:29:51] But other my childhood friends all went what's called out of district. So they went to a different school

[00:29:57] Versus the one that was selected for our address

[00:30:00] So very few of the people I grew up with actually went to that school at least fresh out of junior high

[00:30:06] Some would go later for like a year or something, but the vast majority of them did not go to that high school

[00:30:13] Which it didn't surprise me, but it disappointed me

[00:30:16] They're actually even people that I knew from junior high the transfer to a different out from that school to a different school

[00:30:23] I

[00:30:24] Described that because as if your parents are going to be parents in this new place

[00:30:29] these are things you should think about the schools that are earmarked for your address to be and

[00:30:35] Actually assess them and evaluate them and the quality of education the things that they're taught

[00:30:40] But also not just the lessons in the source material

[00:30:44] But also the morals and the ethics and belief systems that should be shared

[00:30:49] To make sure that they're not being taught things that are not in conformance with what you believe

[00:30:54] That you don't want certain things taught to your kid that are not consistent with what you're teaching them off the side

[00:31:00] That your kids not being mistreated at school that your kid is getting the right type of attention

[00:31:06] You know some of these schools they have too many kids in the class and so the quality of education degrades

[00:31:13] Now all of that's covered. They want you to use that because your tax dollars

[00:31:18] Go to paying these teachers and schools, but if they're not consistent with what you want

[00:31:23] I don't recommend that you do. It's just that when you buy something

[00:31:27] Condo house town home, whatever they've already pre selected the schools from a district perspective that your kids should go to

[00:31:35] Unless you have a compelling reason not to and then you have to jump through hoops to have them go through a different school

[00:31:41] There's no wrong answer. It's what you want to do a lot of parents. I think

[00:31:46] Simply defaults to what's available because of cost that may be the course that you take up front

[00:31:52] Consider if somebody in the family is going to be military

[00:31:55] Where it's gonna be disruptive to the children and you have to move around

[00:31:58] Maybe it doesn't make sense to buy something because you know that you got the uprooted move when they get deployed somewhere else

[00:32:04] All of these are part of the thought process when I say make sure you know what you want

[00:32:08] Make sure you know what to expect make sure you know have a plan before you ever talk to a lender

[00:32:14] Once you get to the lender you still have some flex

[00:32:18] But the lender is gonna expect that you're signing a contract for a specific home

[00:32:22] It's not like you know just get a random loan and then get any home that you want

[00:32:27] You know it still has to make sense from your income. It has to make sense for your credit

[00:32:32] It has to make sense for the size of home

[00:32:34] You really need it has to make sense for the neighborhood that you plan to live in

[00:32:39] Then the loan should fit according to the ratio for your credit and finances that the data

[00:32:45] And you have to anticipate things don't buy based on bonuses

[00:32:50] You may not get you know buy based on money. You know you're getting a salary and

[00:32:55] Buy when you know that you've got some comfort at your job if you just start a new job

[00:33:01] You're still you're still on pins and needles

[00:33:03] They can absolutely cut you and then they're gonna be left in the lurch and trust me

[00:33:07] The last thing you want on your credit is a home foreclosure and the last thing you want is to be evicted from

[00:33:13] Your own home

[00:33:16] Let's say you get past all that let's say you're comfortable

[00:33:19] You know what you want to do you know how the school thing should work

[00:33:22] You know the kind of home that you're looking for now. You're trying to assess price and what you can afford budget

[00:33:30] When you budget for the home

[00:33:33] You can't just budget for the house itself

[00:33:36] You've got a budget for the land aka property taxes

[00:33:40] Because although you own the home and although you technically own the land

[00:33:45] There's other things to think about depending on the age of the home

[00:33:49] There may be an HOA a homeowners Association. I talked about it in my situation. It was little old lady down the street

[00:33:57] Almost every HOA they have what's referred to as the bylaws

[00:34:00] You need if you're gonna go there

[00:34:02] make sure you read the bylaws because the bylaws probably say something to the effect of if

[00:34:07] You don't pay your property taxes, or you don't pay your HOA dues we can take your house

[00:34:14] And you're like horror

[00:34:16] If you don't pay your dues to the HOA or you don't pay your property taxes

[00:34:22] They almost always concedes your house

[00:34:25] Regardless of owner of nothing it doesn't matter. You could own it free and clear paid off deed in hand

[00:34:32] If you don't pay the taxes or the dues for the HOA chances are they can seize the house

[00:34:39] That's the downside of the HOA

[00:34:41] You don't really own anything under HOA you own it as long as you keep them happy

[00:34:47] You can't do you can't have your broken down car in the front yard or they can seize your house

[00:34:53] You can't paint it off pink because they can seize your house like that's how petty this business is

[00:34:59] so when you go in

[00:35:01] Make sure if there's an HOA you read those bylaws read them if you need help

[00:35:07] Contact an attorney to help you interpret what it means

[00:35:09] I can almost guarantee you every last one of them is gonna say something that says they can take your house get your house

[00:35:16] Took if you don't follow their rules. It's not really yours if there's not an HOA

[00:35:22] You still could get your house took if you don't pay your taxes, but at least there it's the state right?

[00:35:28] It's a lien and it's the state and that's understood

[00:35:31] But but you even if you own the land quote unquote, you still have to pay taxes on the land

[00:35:36] You have to account for taxes on the land

[00:35:38] You have to account for the mortgage payment that you're paying you have to account for homeowners insurance

[00:35:44] You now are basically as a given had to account for internet access of some kind

[00:35:50] Because phone is governed over the Internet

[00:35:53] You can say well, I'll just do my cell phone that assumes that it's gonna work in that area

[00:35:58] It assumes it's reliable in that area. You might consider getting the regular phone service, but it's all internet-based now

[00:36:05] They got rid of the copper you need to account for this

[00:36:08] If it's got a sewer tie into the municipal sewer system

[00:36:12] You need to pay an account for a sewer bill of some kind

[00:36:15] You're gonna need to account for electrical

[00:36:17] You might be thinking well just put solar

[00:36:20] Solar is very expensive if it didn't already come with it and if it did come with it

[00:36:24] It's probably gonna skyrocket the price of the home. So chances are you got the paint electrical bill of some kind in

[00:36:29] Some areas you're probably not the pay to have the sidewalks snowplow

[00:36:34] Yes, if it's a sidewalk in front of your home, you're kind of on the hook to make sure snow plowing is done and safety

[00:36:41] It's kind of put on you in the vast majority of areas. You have to account for these

[00:36:46] Landscaping you have to account for this trash disposal you have to account for this

[00:36:50] All of these are extra expenses that nobody really thinks of but you really should

[00:36:54] In some cases when you rent some of those are covered by the property manager when you purchase

[00:37:00] They're not so much if it's an HOA property like a condo building in some cases. It's part of the condo

[00:37:07] association fee

[00:37:08] rarely

[00:37:09] You have to account for repairs that may come up

[00:37:13] Your siding depending on the type of siding your siding is gonna have some issues at some point

[00:37:18] Your foundation is gonna have some issues at some point

[00:37:21] Your electrical is gonna have issues at some point your insulation is gonna have issues at some point

[00:37:25] Your roofing is gonna have issues at some point your water piping is gonna have issues at some point

[00:37:31] Your doors are gonna have issues at some point. Your windows are gonna have issues at some point

[00:37:35] Your your HVAC system heating and venting and air conditioning are going to have issues at some point

[00:37:41] Your bathrooms are going to start having problems. Your kitchen is going to start having problems.

[00:37:48] Security is something you have to think about. I'm describing, and I haven't even given you the

[00:37:54] full list, but I'm describing all of these other tertiary expenses that nobody thinks about,

[00:37:58] but you're going to need to when you go in to purchase. Now a lot of these are not covered

[00:38:03] in the upfront mortgage. They're part of your budgeting. Budgeting is how you understand

[00:38:09] what your monthly bill is going to look like every single month going forward with this new change.

[00:38:14] When you rent, you should be budgeting things like how much food does your household need?

[00:38:20] If it's a household of one, presumably it's less. If it's a household of four,

[00:38:25] presumably it's more. All the different utility bills you have to account for,

[00:38:29] all your internet stuff you have to account for. Everything that goes into living somewhere

[00:38:37] should be part of your budgeting plan and you should readjust your budgeting plan if you plan

[00:38:42] to purchase a home. And what does that look like? A lot of people do not do so,

[00:38:47] and they really should because if they did, you would probably find that you're not

[00:38:51] financially capable of purchasing a home yet. And it may take dual income, even in dual income.

[00:38:59] Like there's some dual incomes that don't make more than 60, 70,000 bucks a year,

[00:39:04] I can tell you. In most states west of the Rockies, you're not buying a good home for

[00:39:11] that much money per year. You're going to need to make much more than that.

[00:39:15] And you're wondering, well, it smells like a rat race. Yeah, that's what it is. It is now.

[00:39:21] It wasn't before, but it is now. Absolutely. Absafrag and Lutely. There was a time I said

[00:39:26] it. And to be fair, Chicago, right? You can buy a home on a credit card, but that's the

[00:39:32] other thing to think about. Security. Just because they help because you could find homes

[00:39:37] that are cheap. Okay, is it a safe neighborhood? Probably not. You have to look at crime in the

[00:39:43] area. Not just property type crime, but bodily crime. Crime to your kids, right?

[00:39:48] You have to think about all these things in your shopping and it's going to all of this

[00:39:54] together creates a price target. And you say that's basically what I can afford and what I

[00:40:00] can justify. And that number is going to be higher than what you thought it could or should be.

[00:40:06] If you're on the low end of income, you're going to have to settle lower, but you have

[00:40:09] to understand if you're settling lower, there's a direct correlation between low income and

[00:40:16] high crime. There's numbers all over the place. So if you have to settle for those things,

[00:40:22] you have to understand that the crime is going to be a higher risk. And if you're trying to

[00:40:27] build a family, you have to take that into consideration. Is that what I want to do?

[00:40:32] And sometimes you may have no choice, especially if it's a temporary solution.

[00:40:36] I apply the same logic to mobile home parks. Mobile home parks is a reason that they're

[00:40:41] referred to as trailer park trash because in the mainstream, when I say mainstream,

[00:40:46] I'm talking outside bubbles. In the mainstream, the thought is that trailer parks

[00:40:51] are filled with drugs and crime and whatever else. And there's numbers to back that up.

[00:40:56] It's not the common, but it is there. So if you go there, that's risk. And you have to understand

[00:41:05] is that all I can do is that all I can justify. And if I had enough to rent in a safer place

[00:41:13] versus buy in a lower crime, perhaps I consider renting knowing what I said before. It takes a

[00:41:20] long time to say 20% down. I am not telling you that's easy. It's not, but perhaps you have to

[00:41:28] think about safety. You have to think, perhaps I just got to bite the bullet and just rent for now

[00:41:35] and then find a way to increase income in the household. Legally, obviously. Find a

[00:41:41] way to increase income in the home so that you can afford more. Barring all of what I just

[00:41:47] described. And I left this for last because I don't recommend it, but I have to act in all

[00:41:52] fair disclosure say it. Most states have programs to help with down payment assistance,

[00:42:00] programs to help with closing costs, programs to help for low income families get into decent

[00:42:05] homes. Now the catch is there are certain counties that they're trying to help populate

[00:42:11] that are lesser counties. They're not getting a lot of people in these counties and they want

[00:42:16] more people in those counties. So the program is designed to entice more people to go there

[00:42:22] because they know that the more people that go there, the more tax revenue, right?

[00:42:27] So these programs are designed to help bridge it. Let's say you can't put 20% down,

[00:42:31] you could put 5% down, which is a lot easier for some people and you can do FHA. You do

[00:42:36] one of these programs and it can help fill the gaps on those things. Sure, but there's

[00:42:41] always catches. I talked about one of the catches before how they can yank it from you

[00:42:45] at the last minute. I'm not suggesting you don't avail yourself of those programs. I'm

[00:42:50] suggesting you be careful and don't overly rely on that it's going to be a, it's in your best

[00:42:56] interest. Sometimes it's not. Sometimes it's just a scam. I'm honest, even as a state program,

[00:43:01] some of them are scams. They're destined to trap you into something. So to me,

[00:43:08] if my recommendation is to figure out how to increase how much money you make to make it

[00:43:14] easier to save more down, at least get to 10% down, but try to target 20%, which may mean,

[00:43:23] and this is another thing to think about. I have a friend I used to work with and she

[00:43:28] refuses to leave California. I tried to get her to a lope, you know, whatever,

[00:43:34] and she refuses to leave California. It just, she just will not leave California,

[00:43:39] even though she'll complain about the prices of things in California. And I'm telling her,

[00:43:45] if you just elope with me here, between the money you make and the money I make,

[00:43:49] we could probably live like kings and queens deep, deep, and she just won't do it. You may

[00:43:54] be in an area that's pricing you out. That's another thing. Subconsciously, I get it. You

[00:44:00] like the whatever, sunshine beaches, whatever it is that's keeping you there. But if you

[00:44:05] really want to be in a safe place, that's good enough for family, that's hopefully got

[00:44:10] some good jobs around. Maybe it just makes sense to pack up and go to another state

[00:44:15] and also consider if the states out there, the one that you're in compared to the ones

[00:44:19] you could go to are more in alignment with your values and your beliefs. Some states

[00:44:25] might be closer to what you really believe than the one that you're at.

[00:44:28] You might see a dramatic shift away from your own value principles. Well, why would you stay

[00:44:34] there? Why would you enrich them with your tax dollars? Again, beaches, sun, I understand.

[00:44:39] I would rather be in a place that's more in alignment with what I believe because there,

[00:44:45] you're going to get along better with your neighbors. Sometimes the fast life is what

[00:44:49] people want. Sometimes the slow life is what people want. I would argue most people don't

[00:44:55] want to be in crime-ridden places and there's numerous causes for those situations.

[00:45:01] I'm saying that if you want safety and you want to try to build a home and you want to try to

[00:45:06] get the dream, right? The American dream, which isn't really anymore, but you want to get there.

[00:45:12] Be thinking about all of what I just talked about. There's a lot to think about.

[00:45:17] It's not easy. That's why there's realtors. They're supposed to try to help you navigate

[00:45:21] those waters. The best source though is somebody that's gone through it. I'm talking

[00:45:26] an actual buyer and even possibly a seller to help you understand everything they had to go through

[00:45:32] to be able to do it, especially if they've done it a couple of times. I think those are

[00:45:36] the best sources of that information. Your parents even might have gone through it and

[00:45:40] are willing to talk through it. It's just that things have changed since they did it.

[00:45:44] They were a paper process. We're no longer paper process. I would try to find,

[00:45:48] I don't know if your local church might have something, one of your schools, one of your

[00:45:52] colleges, your workplace, somebody that you can talk to that's gone through,

[00:45:58] ideally the buy process and the sell process so you can get both perspectives

[00:46:02] and just ready yourself for what you're up against. If they went through an attorney,

[00:46:08] which is rare, but if they went through an attorney, that's something to consider, but

[00:46:13] it's not common to do that only because the realtor's job is to actually help with all that

[00:46:18] stuff and there are good realtors and there are terrible realtors, I assure you. Try to see if

[00:46:23] you can find somebody that you can talk to the process from their lens and what they went through

[00:46:27] to understand it before you go through and even have them suggest and maybe even go with you

[00:46:33] on the walk through the home for things they might notice. Obviously, it's all subjective.

[00:46:38] Things that you like might not be things that they like and vice versa.

[00:46:42] Now, I told all that. The reason that I wanted to follow up on that story and about homes in

[00:46:50] general and people getting out going forward and the popularity of some of the stuff.

[00:46:57] The bottom line is this. I had to learn at a very, I don't want to say young, but I was

[00:47:02] young, age, like my 20s, so I say young quotes. I had to learn at a very young age what

[00:47:09] I didn't know and that's a slap in the face that some people are not ready to receive.

[00:47:14] Some people are not ready to understand what they don't know and they're not sponges.

[00:47:19] I'm encouraging everybody to be a sponge for these things that you don't know.

[00:47:24] Don't worry about the fact you don't know. That's what experience is all about.

[00:47:29] If you've been coddled, as in parents or somebody else,

[00:47:33] blockaded you away from bad news or negative whatever because they wanted you to always smile,

[00:47:40] they did you a disservice. There's nothing wrong with hearing bad news or this as long

[00:47:45] as it's intended to help you grow as a person. Going through this process,

[00:47:50] the first time I went through it, that was a catastrophic mess.

[00:47:54] If I hadn't gone through the catastrophic mess, I wouldn't have understood how to recognize

[00:47:59] when it's about to go down that road. Understanding what to do about it is the lessons learned.

[00:48:05] What would I do different? How would I adjust it? And knowing I'm in a different, completely

[00:48:10] different locale, so that changes the rules. I just have to understand how it works here

[00:48:16] and then play the game and make sure that I'm not swindled into something and that I'm

[00:48:20] in control. Long as you stay in control, which I'll just honestly tell you, you have

[00:48:27] to embrace pissing people off. And I know culturally that is foreign to a lot of people.

[00:48:34] You've got to embrace pissing people off. If you hear everything I just told you in this long,

[00:48:39] I didn't say anything that was a direct insult. I'm telling the truth because I want you to

[00:48:43] understand this is the real world and it's going to piss some people off. When you do an

[00:48:48] inspection on a property and it's finding all these fundamental issues, it's going to piss

[00:48:54] the seller off. If you're a seller and you get produced this document that's telling you your

[00:48:58] home is crap, you're going to get pissed off. But that's business. You're saying this is what

[00:49:04] it is. Let's move past it. I still want the home. Let's adjust the price. Let's negotiate.

[00:49:10] A lot of people struggle negotiating. They struggle with it's just business. It's just

[00:49:14] a deal. You can't take it personally. The temptation is always there, but you can't take

[00:49:20] it personally and you can't get set off triggered because somebody's asking you to come down on the

[00:49:24] price that you thought was a good idea. Because let's be honest, your agent should have already

[00:49:29] told you there's no way this price makes any sense. You're way too high. You might say,

[00:49:35] let's start there and then we'll have a fallback. That's great. Long as there's a plan

[00:49:40] and you don't take it personally. Could you imagine though on the rental side, if you had

[00:49:44] the flexibility to basically do an inspection report on that property and present it to them

[00:49:49] and tell them, you know what? You got rats in your business and you got jacked up pipes

[00:49:54] in your business and your lights are all screwed up and all that. And then they have

[00:49:58] to come down on the rent, but you don't have that power. You don't have that flexibility.

[00:50:02] You basically got to take whatever garbage they give you. And anybody that's rented

[00:50:07] in various different places will understand a lot of these are just cesspools. They're not,

[00:50:12] they don't keep them up to speed. They don't keep them up to date. And so they don't want

[00:50:15] to update them. They do the bare basic minimum and paint over the rest paints, cheap everything.

[00:50:20] The fixtures are cheap. The bulbs are cheap. Everything's cheaped out and you don't have any

[00:50:25] authority because that you're essentially answering to them. And then on top of that,

[00:50:30] you have to give them first month's rent last month's rent and deposit a thing. You

[00:50:33] got to give them 60 days notice. They can kick you out in four days. Notice like they

[00:50:38] hold all the power. And some people like myself are simply coded that that's unacceptable

[00:50:45] and we're tired of it. And so if you're one of those where that's your motivation for considering

[00:50:51] buying something is being sick of the rat race that is renting. That's why I did this follow

[00:50:56] an episode because I want to empower people to think about more than just the price. It's not

[00:51:02] just the price. There's so much more to think about. The maintenance is important. The bills

[00:51:07] are important. The taxes are important. The things that are going to fail are important.

[00:51:12] Crime is important. The schools are important. Proximity to work or can you work from home?

[00:51:17] That's all important. Security is important. So many things you never had to think about before

[00:51:22] you now own, but in exchange for that ownership, you run your business, quote unquote,

[00:51:30] and nobody can tell you what to do other than the state and the state just makes sure that

[00:51:34] you pay your taxes. Pay your taxes and you're good. If you're in an HOA,

[00:51:37] you answer to the HOA and the state, pay your bills and you're good. Outside of that,

[00:51:43] you have that coverage. You have that freedom and you're creating generational wealth to pay

[00:51:49] forward. And that's hard. A lot of us have lost or never had generational wealth to be

[00:51:56] able to pay forward because some of us were born in an era where that was not afforded to

[00:52:02] us or the laws were slanted away from us. Now, if you could get to that level to where you can

[00:52:08] start building it, you could help buck the trend and move your family forward. And that's a

[00:52:13] beautiful thing because rents not going to do it. Rents are just going to get higher before

[00:52:16] they get lower. Some people are fine renting for life. I just was not one of those people

[00:52:21] and anybody who's like me, I wanted to help them with some information. Next time we're back

[00:52:26] on women under attack because unfortunately they're under attack and I want to make

[00:52:30] sure I give them the time and attention that they so justly deserve.