First Time Home Buyer Seminar

Welcome everybody. Thanks so much for being here. This is another edition of the Drew 2, or as I call it, the Drew 22. So every 2 weeks we'll do another presentation right here for 22 minutes to get you back to your workday. And today is a topic very near and dear to my own heart. Buying your first time, buying your first home. So like as if you are a first-time homebuyer. So we're going to cover a lot of different things today in our first-time homebuyer workshop, including dispelling some myths about buying a home. We're also going to cover what questions you should ask your agents and lenders, and then what other things you need to know when it's coming to buy your first home. Right? So it's just me on this call today. This is not a big sales pitch. There's nothing here to sell. We hope this is just good information that you enjoy to have. And be warned a little bit that I might talk a little bit more frank about owning a home than any other first-time article or video that you've ever seen before, because I want you to know the real information about buying a home. Absolutely be aware that there are a lot of people who have a vested interest in selling you a home. But let's talk about the good and the bad. If I can give you all the right information, can you make a good decision? Absolutely. And that's what this discussion is about today. All right, so let's get into it, if you don't mind. So what exactly is the Drew 2? Well, the Drew 2 is me. I'm Drew. My name is Andrew Postell. My name and phone number are up there on the screen. You can reach out anytime. My email as well. I've been doing real estate for over 20 years. I own multiple properties. Yeah, multiple properties. I'm in the top 1% of all the loan officers in the whole country, and that's a blessing for me to be there. The other piece of it is that when we talk about real estate here, we're talking about residential real estate. Okay. 1 to 4 unit is a residential piece of real estate, and that means that a first-time homebuyer can qualify to purchase that type of a property. Certainly have lots of experience around purchasing homes, structuring deals, here to answer any questions if you need. And you can follow me on Facebook and Instagram too. And yes, I do post these to YouTube. We're getting it up and running and you can follow this also there. Let's get into it. When it comes to buying my first home, let's dispel some myths. Myth number 1 that drives me crazy anytime I hear it: owning a home is less expensive than renting. Wrong. This is so wrong. I wish I could talk about this for an hour, but we only got 22 minutes to cover several things today. Owning a home is not less expensive than renting. It is not. And I hope you don't mind me saying it that way. I want you to be aware of what the costs are when you purchase a home. So let's take example, like, let's say something breaks in your own home. Well, when you own, you pay. When you're renting, the landlord pays. I understand maybe some of our landlords are jerks, but if the stove goes out or the roof needs to be repaired, or any large items, you don't pay them as a renter. As an owner, you pay them. Also, when you purchase a home, There are closing costs that come into play, into view. So not only do you have to make your down payment or something, but you've also got extra costs just to even get in the door, just to buy the property. Third, don't forget, you gotta have somebody mowing the grass and other things too. So if you choose— and this is just one example, right? Pools, anything, I mean anything, trimming the hedges. If you choose to mow the grass, That means you have to buy the lawnmower, and you just created another expense for yourself. Now you got to maintain the lawnmower and buy gasoline and all this other stuff. Do not be fooled. Owning a home is more expensive than renting in just about every scenario. Okay, if you rent some luxury apartment, you go to a regular apartment, a regular home. All right, that'll be a little cheaper. But what I mean here is that I want you to know that when I own a home, I have other expenses besides the mortgage. It is not cheaper. Even if my mortgage is cheaper than my rent, it is not cheaper for me to own. So whenever you're doing your own calculations of buying your first home, I want you to think about adding 10% to your budget. So, hey, my— I want my home to be $2,000 a month, my payment. Add $200 on top of it. Now, you might not spend $200 this month or next month, but the minute a large-ticket item comes up to play, yeah, now it's on you. So over time, adding 10% of my monthly payment will help. Also, I want to be clear here too. Even though in the beginning my mortgage payment is $2,000, there'll be some paperwork. You'll see what your mortgage payment is. That payment can go up too, even if you have a Fixed rate, 30-year, no prepayment, no balloon, nothing. Regular old boring mortgage. Yes, your payment can go up because your home insurance can go up and your property taxes can go up. Oh, I hope I'm not dissuading you from purchasing a home, but maybe I am. And if that's the case, you got my support. I want you to know what really goes into it. Owning a home is absolutely more expensive than renting. Okay, I hope that answers that myth. The second myth I want to talk about, because I hear this one quite often: I can't afford to pay a real estate agent. Wrong. I hope, I hope people know this, but we'll put it out there anyway. You don't pay the agent. If you're a first-time homebuyer, you don't pay your agent. The seller of the home Pays the agent for you. The agent is free. Somebody else pays it, and that encourages you to use an agent. All right. So the things that an agent can do, they could tell you if somebody's acting ethically. Yeah. How do you know if it's your first time? They can tell you what the market price is on a home. Yeah. Even if somebody— oh, we'll reduce the price $3,000 since you're not using an agent. How do you even know that that price is fair? In some states, seeing what your market price should be is private. You can't even see it. I live in Texas. You cannot see comparable value here. What your home is sold for is private. It's very hard for us to estimate what the actual value of a home is here unless you're a real estate agent. And don't forget, you're entering a binding legal contract. Yeah, you can go to court over this document. So make sure you have somebody fighting for you and your rights in the beginning. And they can do so many more other things too, right? These are agents. So sometimes they're therapists in a way. They listen to what we want and they help us locate a property that fits our needs. You can absolutely afford to use an agent. And I would encourage you to use one at all times. All right. Now, the third myth I just wanted to dispel. It's only— we're gonna get hit 3 of these. So the third myth here: buying a house is easy. Again, there's lots of people selling you on the idea of buying a home. All right. We want to be aware that people say things to encourage us. I appreciate it. Buying a house is not easy. It is not easy. It is going to stress you and test you. And I'll have people who are like, oh, I'm getting married, we're having a kid, and then they put a house on top of it. Ooh, that can be dangerous. Not really. Just— it's just stressful. And I'm not using this to scare you away from purchasing a home. I want you to be aware of it so you know how to plan accordingly. Right. What are some of the most stressful things in life? Well, a death in the family. Yeah, that's awful. Divorce, it's terrible. And then moving. Yeah, it's up there. It's like the 3rd most stressful thing that you can come across. It's going to be that crazy for you. I've actually had, you know, I'm a loan officer, so I've had a pregnant mom call me, hey, everything's going great on your loan, you're great. And she is crying and cursing. And everything's fine. And it's all fine, and that's just how it is because buying a house and moving is absolutely stressful. Plan accordingly. Be aware of it. Just know that you're going to be tested when you do it. So buying a house is not easy. I don't want you to be scared of it, but I want you to be aware of it. And the biggest, most difficult piece of the puzzle right now is the affordability of buying a home right now. Buying a home, it's harder than ever. It's more expensive than ever. So yeah, I want you to be aware of it and plan on how to address purchasing a home. All right. So, Andrew, you just told me a whole bunch of terrible things about buying a home. Are there any benefits? What's the positive stuff? All right. So let's hit the first thing, the thing you're going to see the most articles about and the one that drives me the craziest. But that's okay. The financial piece of it. So if I buy a home, is it financially beneficial for me? Yeah, probably. The thing I want you to be aware of is if you own a home, the average homeowner is worth about a quarter of a million dollars. That's what the average homeowner is. What's the average renter worth? $6,300. That's a huge gap. It's a huge gap. So yes. Owning a home, don't forget, when you make your payment, you're paying yourself. When you make that improvement, when you repair the place, it's your place. Homeownership is amazing and it has great financial benefits. There's more than just this. I just want you to understand this concept. If you own a home, you're already an elite American. It's weird to even say it like that, but that's exactly how it is. But there's other things that benefit me as a family. Like, it's not all about money. What if I were to tell you that owning a home means your divorce rate is lower? Really? Yeah, 60% lower. Owning a home means your divorce rate is 60% lower. Owning a home means that your kids' test scores are better. Owning a home means that you are going to make higher income on average than somebody that rents. And there's so many other things. The crime rate in neighborhoods where people own, it's lower. Teen pregnancy is lower at home. Yeah, if you own. All these behavior problems— I mean, depression, mental wellness, anxiety— all are lower if you own a home. What's that worth? There's no price tag I could put on my children's education. And I know what you might be saying. Well, Andrew, of course it's better in these things because They're stable. They're stable families, and they're stable. You know, they own a home. Yes, that's it. That's it. You got it. That's exactly the concept here. Owning a home forces you to be responsible. Oh, do I have to say it like that? Well, it does. It forces you to make more money. It creates a stable environment because owning a home is more expensive, right? So I got to make more money at the job. It creates a stable environment because now I don't want to move because I put all this money into my house like it does. The ancillary parts of this is, to me, are the financial benefits. The real things that affect me and my family are these pieces of information, and there's lots and tons of studies on this. And this is why the government gives out grants to people to buy their first home. Because it's so hard. And then there's all these societal things that happen when I own a home. I hope this makes sense how I describe it. All right. So one of the things that's important to understand about when I go out to buy a home is that I need to first understand how much I qualify for. If I go out and look at some homes that I may not qualify for, I might be just discouraging myself from even buying a home. So if I know what I can afford, afford, quote unquote afford, then I can make a decision. All right, can I find the home that I want? Can I do this? And if not, we can wait and then plan accordingly. So whenever I go find a mortgage, I mean, unless you're very successful, you can pay cash. The rest of us need a loan though, right? Our loans look at 3 things. It looks at our income, our credit, and our assets. That's it. Those are the 3 things that it analyzes. And these are general concepts that I want you to be aware of. Okay, so loans prefer stable income. 2 years of history is great. And then, but if you don't have 2 years, it's fine. Oftentimes, if you just are a salaried person, we can use that income right away. You don't have to have your job for 2 years if you're salaried. The 2-year thing comes into play if you're commission only or if you have variable income, right? My wife's a nurse. She has overtime and shift differential and All these crazy things, on the crazy things where it fluctuates. Those are what I need 2 years of. But if I have stable income, I've gotten people qualified with just their offer letter on a salaried person. All right, so income is one. Credit, hey, reasonable. All right, 580, you can have some options at 580. 620 is better because now I can get those down payment assistance programs that I refer to. I'll hit on those more in a second. 680 helps me with pricing. It's a little better. So there are things that benefit me the higher I go, but I don't have to have— I don't even have to have credit. I can actually have no credit, zero credit history, and still buy a home. Now it helps me if I do have credit history, but I can still purchase a home with no credit history. So good credit history is good. No credit history is fine. And bad credit history, though, is bad. All right. Now, it's still possible to get a loan with bad credit history, but now I need more of something else. I either need more income or more assets. So usually on the asset side, right? Let's hit this for quick. 3 to 5% down is what we normally look for. Now you have closing costs. Those could be $0 to $10,000 depending on how you negotiate with the seller. Yeah. So could I— might I need like $25,000? You might. And how hard is $25,000 to buy a house? That's really hard, especially if you're a working-class family with 2 and a half kids, like the average nuclear family in America is what they called it. So there's solutions to this to help you qualify or purchase with a down payment. Your family or a friend can gift you money to help you. That's allowed. I don't know if it applies, but it's allowed. You can also get the seller to help pay your closing costs, especially right now. Where we have the upper hand as buyers. Negotiating power is on us as buyers. And then the third thing are these down payment assistance programs. So usually for me to get into a down payment assistance program, I need to have a 620 score. I need to have, you know, low to middle income level. Like if you're a millionaire, you're not going to get this. They have income caps. If you make too much, you have avenues. This is for like low to middle Income earners. And then usually they're either giving me a higher interest rate, or they might even put a second lien on my home that goes away. But there's some— there's something in there that if I could do it on my own, I'm gonna be better off in most scenarios. So whenever you work with a lender, I want you to find out what their programs are and then have them compared to a normal loan so you can see the difference. Okay, we're just covering concepts today. Every 2 weeks I do this for 22 minutes, so we have a lot to cover every week. I just want you to have this conceptually. You can call me or email me afterwards, totally fine. Questions to ask your real estate agent. 5 quick questions to ask your realtor. Are most of your clients buyers or sellers? Yeah, there are agents out there that don't represent buyers at all. They only represent sellers. Figure out what agent you're in front of. Work with somebody that works with buyers. Is it less expensive for me to buy a house without you, Mr. or Mrs. Real Estate Agent? And they should be able to answer this concisely and effectively. All right, how long have you been a realtor? That's always good to know. Where can I read your reviews and your references? How do you know if they're any good? Ask them for references. How would you negotiate for me to get the best deal I can? Anytime we talk to somebody, I want you to trust your instincts. I want you to work with somebody that you like, and don't feel that you've got to commit right away. Hey, you can tell them, hey, I'm just interviewing, trying to figure out who I want to work with. Talk to me about these kind of questions. All right, just conceptually, that's where I want us to go. Let's hit up lenders. Lenders don't get off. Let's ask them some hard questions too. Hey, Shouldn't I just go with the cheapest lender, Mr. or Mrs. Lender? Why not just go with the cheapest one? Make sure that they can tell you what the benefit is to work with them. Can you give me an idea of what I can qualify for without checking my credit? Just an idea. I don't need to be to the penny exact, but just give me a roundabout idea. If they're any good, they should be able to. Is there a fee To get me prequalified? And the answer here should be no. This should be totally free for you. Remember, you're a first-time homebuyer. You should not be paying anything to anybody on your first time around. Okay. All right. Number 4, how many down payment assistance programs do you offer? Yeah, there's lots of different ones out there. How many do you offer? The more the better, because that way I can see what I can get. And then number 5, how does working with you Allow me to get a better home, right? Same type of thing. Ask them. Trust your instincts. Work with somebody that you like. Now I want you to pay attention to something with the lender thing. I'm a lender, so I'm going to be extra hard on lenders. The 2 biggest complaints in the lending industry: I never can get in touch with my loan officer, and they keep asking me for the same darn documents over and over and over and over again. So pay attention to how long it takes them to respond to you initially. How quickly they can communicate, because when you're under contract and you've got a short amount of time to close on a property, you need your lender to be there for you. All right, this is it. We're almost at 22 minutes. I can see the timer. This is what we do every 2 weeks. We cover a different real estate topic for 22 minutes so that we can get you back on your day. In 2 weeks, I'll be covering the house hack. No, this isn't you chopping up your house. This means you're renting out your rooms or your other units to help decrease your expenses. We'll be covering it in 2 weeks— how to buy a property to reduce my expenses by earning income on it. If you're interested, it's always free. As you can tell, it's a pretty friendly— you know, there's nothing salesy going on here. I'm just here to give you information. If you have any questions, My contact information is on the screen. Feel free to call me if you have any questions. This would be the time that you would unmute yourself to ask, and if there's nothing, we can adjourn. Do I have any questions from the group today? Great. Everyone, thanks so much for being here. Feel free to call or reach out anytime, and hopefully we'll see you again. In 2 weeks. Take it easy, everybody.