1: THE DREAM OF HOME OWNERSHIP
It was a summer day in 1982 and friends Rowdy and Angela were spending the night in the Bank of America parking lot in south Colorado Springs, Colorado. They arrived right after work with their sleeping bags and lawn chairs and joined a line of people already there, waiting for the bank to open its doors again at 9 a.m.
The prize for the first 100 customers? A mortgage loan with an interest rate of 15%. The going rate at that time was 2-3% higher, and if Rowdy and Angela hadn’t been one of the lucky 100 (they were), they were prepared to pay 18% interest on a loan to purchase their first home.
Homeownership is the dream of many Americans. Beyond the stake-your-claim pride and the stability that owning one’s own home provides, real estate is a wealth builder. Home equity is the single largest form of wealth accumulation for Americans and it’s in a class all by itself. Where else can you put 3% down (and sometimes 0!) on an asset and realize appreciation on 100% of its value?
Unfortunately, the dream of home ownership remains just that for many people—a dream. They wait for interest rates to drop again or for the time or the deal to be just right. They wait until they can put 20% down or pay off their student loan. They wait for the stars to line up and manna to fall from the skies. They wait and they watch as others buy homes, increase their equity, and live the dream that once was theirs, but that grows dimmer as time passes. Meanwhile, their rents keep rising, saving becomes harder, and in the race to homeownership, they feel like they’re wearing clown shoes.
So, if you’re feeling like they are, you’re not alone.
Income levels have not kept pace with rising housing prices, making “affordable housing” either a national crisis or a national joke, depending on how you look at it.
The best time to buy a house was yesterday. Second best? Today. Don’t get shut out of the best opportunity you have to build wealth. Time is your enemy and it’s not going to get any easier than it is right now.
Here’s a sobering thought: Can you guess the net worth difference, on average, between a renter and a homeowner? Would you say it was 2:1 …? 5:1 …? 10:1 …?
Not even close.
Every three years the Federal Reserve publishes a Survey of Consumer Finances. The most recent survey found that the gap in wealth between a homeowner household and a renter household is 40:1.
The game is rigged, and the advantage always goes to the house.
I’ve been a real estate professional for nearly 20 years, and I’ve seen the difference home ownership makes in people’s lives. If I were rich, I’d buy everyone their own house! Failing that, I want to help as many people as I can by sharing what I know. I believe that anyone who wants their own home and is willing to do the work to educate themselves on the home buying process and take a few simple steps deserves to be a homeowner. Not in five years or 10 years, because waiting is a losing proposition. Right now.
What are these simple steps?
Step One: Prepare: Educate yourself, learn some basic terminology and the rules of engagement. Learn the best financing programs ideally suited to first-time home buyers that no one ever bothered telling you about. Programs that eliminate credit barriers, provide down payment assistance, and even help with closing costs.
Step Two: Pursue: Select a lender and begin the hunt for the right property, armed with the knowledge that your financing is already lined up.
Step Three: Purchase: Secure your home, negotiate the best deal, and follow through to closing and keys.
Each of these major steps has plenty of minor steps to take. But they’re all doable. You may have not saved much—or anything—for a down payment. You may have less than perfect credit. You may not even know where to start and you may not even believe that it’s possible. It is. You can own a home. YOU.
What You Can Expect
When we’re finished with our time together, you’ll not only be at the starting line ready to sprint, but you’ll also know the smoothest route to take, the hurdles to clear, and the obstacles to dodge to get you across the finish line in record time. You’ll know what to do and when, the language to use and with whom, the resources you’ll need and where to find them, and how to protect your interests through the entire process. In the quest for your just right home, I’ll be your secret weapon, your board of advisors, your mentor, your guide, and your genie in a bottle.
My clients pay me thousands in commissions to have access to the knowledge you’re about to have. Other real estate professionals who enroll in my courses only hear about a fraction of these strategies and techniques, because there I approach content from a licensee, not a consumer, viewpoint. But for you, in addition to thoroughly covering the basics you’ll need to know to prepare for, locate, and secure the property of your choosing, I’m going to share some nuances of negotiation that I’ve never shared with anyone outside of my own clients because they give us the competitive edge. Soon that edge—and the keys to your new home–will be yours. I’m excited for you!
About Your “Home Work”
At the end of each chapter, you’ll find a “Home Work” section. These activities will lead you through the home buying process, step by step. Come back to them or follow them step by step, right across the welcome mat to your new home.