How the heck do you figure out how to buy a home in a city you have never lived in? In this episode, David Sidoni discusses how to move to another state.
Remote working is one thing, but remote home buying can be filled with obstacles. Listen to the real-life story of how John and Adrienne, How-to- Buy-A-Home-listeners, figured out how to buy their first home in Portland while they were living in LA.
If you want to learn how to move to another state, this episode’s for you. Take other people’s experiences and let them guide you to find a smoother path for yourself. Tune in!
Ep. 55 – How To Move To Another State – Real First Time Buyer Story
Another Listener Success Story, With Tips And Tricks For Moving To A New Town
This is a story of a young couple who lived in LA. They met there, they worked together, and they decided they want to move to the Pacific Northwest. How were they going to find a realtor, pick a neighborhood and figure out how, and if they could buy a home in a city that they didn’t even live in? Let’s find out.
It’s story time. Enough of my babbling about how much I care about you and how you can do this. Let’s hear some results. This is not theoretical ideas or hypothetical advice. It’s time for another success story. If you’re new to the show and you’re looking for specific step-by-step instruction, it’s out there. There are a whole bunch of other episodes for that, but there are plenty that you can still learn from reading their stories. There are lots of tips, strategies and juicy nuggets of wisdom packed into John and Adrienne’s story of buying a home three states away. One of those states was California. That’s a long way.
Moving in general is stressful, but moving from one city to another city that you haven’t lived in before is crazy. Trying to buy a home before you settle into the city can be mind-melting. It’s a monster hurdle. What’s the best way to start planning and purchasing your first home remotely from another city? How do you do that? It’s an intriguing topic.
As a buyer, you’re getting new remote tools that are being invented and implemented every day. Don’t get confused. This is not going to be your guide on how to buy a home totally online. That still has some pretty major drawbacks that you want to avoid. Until you guys out there can teleport, it’s best that you use a local team, boots on the ground to help you out instead of trying to buy long-distance with your avatar. This is not how to sit in your PJs and click on your laptop to make the biggest financial decision and emotional investment of your entire life. This is how to properly secure yourself a remote and experienced real estate team located and specializing in your future city, and getting to them early.
This is how to get a pro rockstar team that’s not only willing to help you, first-time buyers, make a cross-country or a cross-state move. They are also there to help you plan well ahead of time before you start making offers. It’s a team that is up-to-date on all the tricks and the remote hacks to help you feel like you were there when you’re working with them remotely, preparing your finances and cruising neighborhoods. You can do this all in the comfort of your current home hundreds of miles away from where you’re going to buy. There are a lot of other great first-time buyer tips in this episode. We’re even going to get into some detail-oriented and not often discussed hacks, tools and techniques. I told you that you can do this. I tell you that all the time. Let’s learn how John and Adrienne did it.
I’ve got some exciting folks with us here. Adrienne has been a friend of mine since I don’t even want to talk about it. It was a long time ago. She and her husband, John, gave me buzz years ago. The thing that was interesting for me that a lot of our readers might be in that weird position is a lot of people don’t want to buy a house because they’re not quite sure where they’re going to live. Tell us about your journey and how that worked for you guys.
We knew we wanted to get out of California. My family is up in the Seattle area, so maybe somewhere near there and somewhere with trees. We’d been intrigued by the Portland area. We took a vacation out there and visited a few cities to see if it’s some place we’d want to live. We ruled out some cities and found other cities that we thought were good contenders. In those cities, every neighborhood was nice.
We’re like, “Let’s see if we can get a realtor while we’re still in California and figure out a way to do everything remotely,” especially because COVID came shortly thereafter. We had decided to take another trip out there and meet with the realtor later in the process. Earlier in the process, we did everything from California. We did the research on the internet, talked to you, eventually talked to the realtor and the lender over Zoom. That’s how we did it.
Did you guys have any tricks that you’ve found as far as looking at things online? Were you using Google Maps? What were the things that you were doing to explore a neighborhood without being in it?
We were looking at a lot of different properties in a few different areas. I do know some people who live out there. We just talk to people and looking up a lot of sites like, “What are the safest neighborhoods? What are the farthest neighbors?” There are many top ten lists of everything. It’s looking at a bunch of those and then see, “This one is listed in five of them. I can probably trust that.”
That’s smart. When they’re clickbaiting you, you resource them against each other to see which one pops up the most.
I figured if five different sites say that Beaverton is a good place, there’s probably got to be something about it. I was able to ask the people that I didn’t know about that. It seems like a lot of people were saying that area was nice. That’s where we started. Other than that, it was strange to not know. It was exciting to get out there and start looking around.
What were some of the other scary aspects when you were trying to figure out how to do this whole process?
Looking at different states, we told Ben, our realtor, “We’re depending on you to tell us if this area is not safe or something that we don’t see.” Because it’s got beautiful trees doesn’t mean it’s awesome. We don’t have kids. We don’t need to be in a nice schools zone or anything. It was not knowing what was out there. In terms of buying a house, what was scary is there’s going to be a bidding war and there’s going to be no inventory. These were all things that we were facing right as we got down to the wire.
We’re seeing things like if we had bought this six months ago, it would have been $50,000 less. It was increasing so fast. We were like, “If we wait another six months, we’re going to be priced out of this.”
What’s scary is before we got on, being the idiot nerd that I am, I was looking through real estate data. What’s crazy is since you guys bought, it’s even more straight up. It’s been unbelievable. It’s an interesting thing for us realtors. For those of you out there who don’t know, Adrienne and I have known each other forever. I saw you guys get married on Facebook. You know how it goes when you have friends who are all in different places.
I knew John long before he ever had a conversation with me. I’d seen the posts. When you called me, it was a weird thing for us because it was like, “This is what you do now.” It was great because one of my favorite unicorn realtors is up there in Portland. The hardest part of our jobs as realtors that all the buyers out there need to understand is Adrienne taught me how to use a computer. I knew that they would probably understand the tech side of it, but there’s a lot of stuff like, “Is this neighborhood safe?” I’m all for it because it’s as far as what we can and can’t say as realtors.
Ethically, we can’t gerrymander and say certain things because we can’t discriminate. There are a lot of websites out there, Sheriff’s sites, Crime Safe and stuff like that, that you guys end up having to figure out for yourself. Talk to me about Ben, the Portland unicorn who’s helped a lot of people. In this case, it was great because I was like, “A++ service.” He’s like, “Am I going to do anything less?” Tell me about how he helped you guys understand what was going on with the community that you’d only visited on vacation.
He was very helpful when he came out. When we were in Portland to finally look at houses with him, he told us before we went into a house not to say anything like, “I changed the cabinets.” He’s like, “Assume that the seller is somewhere listening somehow.” He taught us that little nugget and we’re like, “Okay.”
I saw a stat. It’s like 37% of homes have nanny cams now. That’s what they’re putting in the house because sellers want to know, “What does everyone think?”
That was the first thing he said to us and that scared me. I was like, “We’ll be so nice.” He would tell us about the area too when he came out like, “Nike’s not too far.” He gave us his opinion of some of the attractions in the areas.
He was actually therehat we were concerned about going with some of these other companies is that you’re talking to someone and then you’re pushed off to an assistant. He was very involved the entire time.
Everybody out there, hit the little rewind button on your iPod. I dated myself. I said, iPod
There should be a drinking game every time you say you’re old, by the way.
[bctt tweet=”Don’t get freaked out by top ten lists when you’re doing your research and looking at an unfamiliar area. Don’t put all your eggs in one basket and assume that one list is correct.” username=””]
This Is A One-Off Sale
Thank you very much. I appreciate that. That’s very nice. It’s fun to just be a guy with experience now but again, go back to that. I had a conversation with somebody in Poughkeepsie. I’ve always heard of Poughkeepsie probably from Bugs Bunny but I don’t know where it is. I talked to an agent there and she’s an experienced agent, but she still takes on first-time buyer clients. That’s that magical unicorn that you’re looking for. I always say it’s about 25% of the people. Ben’s a bigwig, the fact that he didn’t just pass you off to somebody else.
I know that you guys got incredible stellar service and for what you guys were doing, you totally needed that because you were coming into a town out of nowhere. Tell us about the search. Was there anything that you thought you had to have that you realized suddenly like, “No big deal?” What were the fun things that made you pick this place?
It was the first place we looked at. We had a few links that say places we want to check out. We were going into it fully thinking like, “This is the first day we’re here. Who knows what’s going to happen here.” We walked in there and it checked all the boxes. It was big for us to make sure that we like the area because the area is harder to change than the house itself. Not being too stuck on, “This layout is not something I like,” or something like that. All that stuff change. It’s yours. At some point, you can do whatever you want with it.
It had four bedrooms. We needed office space for both of us. It had a great outdoor area, a balcony, built-ins. It checked pretty much every box. It seemed silly, we looked at two other places that day and they were nice but the first one was it. We’re like, “Are we crazy to put an offer on the first one we looked at?” He’s like, “I don’t think so.”
We texted you and you said, “No, it’s not crazy.”
You sent me that text and it was so funny because all I’ll think was one of my first apartments in North Hollywood. The first one I went to, I looked at a dozen. The second one I moved into was the first one I started looking. I was like, “This place is great.” Every place I looked at I kept leaning back towards the other place. Forget it. That has a lot to do with the fact that if you’re going to get someone who’s going to listen to you, who’s going to have a real consultation with you.
I always tell people, “I don’t build the houses, so tell me what you like, and then when we get outside away from the nanny cams, tell me what you don’t like because that helps me figure out what to look for.” If you had a good initial conversation with someone, sometimes they might be like, “I know a couple of places that might work for you.” It is always crazy. You feel like, “Am I nuts? Am I going too fast?” I’m glad you saw a couple of other houses. That solidified it for you guys.
We only had four days to do this. I would say to anybody who’s interested in doing this, go try and see what happens because we got lucky with this house and that’s an interesting story.
It was one of those things we were assuming like, “We’re going to put it in this offer but that’s not going to work.” We were doing it at asking and I’ve seen things going for higher like, “What real chance do we have here?” Whatever, it’s worth it to give it a shot. We have nothing to lose. The next day, we were driving around looking at other places.
We’re planning a route so we could hit a bunch of stops instead of going back and forth across town. That made it easy. He had called us as we were looking at the fourth place. We were planning on saying like, “We went and looked at twelve places. We want to see if you can get meetings for these five,” or something like that.”
Instead, he called to tell you about your “what the heck” offer.
He did it like an HGTV show. He’s like, “There was another offer and they were putting down more.” We were expecting to be like, “That makes sense.” After this long speech, he goes, “It’s yours if you want it.” We’re like, “What?” We’re so in shock that we don’t know how to be happy.”
We were on the side of the road, parked and it’s like, “What happened?”
I know Ben pretty well and I’ve been doing that for years too. It’s super fun. All you guys who came for education, I’m excited you’re here. Thank you so much for that. We’re getting to get into the part that a lot of you want to know about real estate. Tell me this crazy story. Give me the gossip.
It’s a beautiful house. It had been on the market for over a week in that area, which was weird.
In which month?
That was June.
June 2021, a house on the market for a month, you’re thinking it’s overpriced, it’s haunted, or they’re just not opening the doors to anybody because everything is going like that.
This is only a week and that was still weird. Ben was surprised too. What had happened was the listing realtor had checked the box that said this house was a townhouse or a shared house.
It was being filtered out of a lot of people’s searches.
That’s a search. That’s a big one.
We were searching for everything. It came up for us and we could see that it’s a single-family home. That was a mistake that this realtor made. The next was all Ben because I said there was another offer. They were putting down more money than we were. They were offering more like $5,000 over, not that much.
The problem was their money was contingent on them selling their house, which they had not done yet. It wasn’t disclosed necessarily that was the case. They didn’t have that money, which I know probably happens fairly often. They wanted to move in right away and the owner were hoping to stay at least for a couple of weeks in August, rent-free because they weren’t ready yet. These other people were like, “We want it now.” We were fine with that. That worked at our timeline anyways.
Ben is calling and he insisted that they look into where the money was coming from for the other offer.
What we’re seeing is the other offer was contingent. They had to sell a house to have the money in the bank to buy this house. They were presenting that they could do that and move in quickly, but the listing agent hadn’t verified that, yet you’re buying agent called him on it and said, “Are you sure?”
He said that if they’re lying about this, what else might they be lying about? That’s why they went with us.
Number one, have a great realtor who’s got big cojones and could do stuff like that for you. Number two, you guys had the advantage. I tell people there are two things in real estate and that’s it, time and money. Explain how the time factor worked for you guys for this particular seller who had their box checked wrong, and that’s the reason why you got it. I love that.
She wanted to stay an unknown amount of time into August without paying rent on it. We weren’t ready to move anyway. As you have often said, you pay rent the first of the month but you pay your mortgage at the end of that month instead. We would have that free month anyway. We ended up staying here too long so we’re paying another extra month of rent, but we wanted to give the seller more time. She didn’t end up meeting all of it. It’s hard to plan for that stuff. That was something that she wanted, and that was the only thing she asked for.
We had to take it as is. There were inspections that we did but now, it seems like the sellers can kick the windows out on the way out.
Just make sure there are no dead bodies. If there aren’t, then you’re good.
There were a couple of minor things, but nothing that would be worth arguing about. There was an issue with the sewer line like 30 feet of pipe going on the sewer line, which was going to be somewhat expensive. As Ben said, that’s one of those things a lot of sellers are like, “That’s the last thing I want to be worrying about. I’m leaving. I would not spend a bunch of money on fixing the sewer line. They took a bit of credit off the closing costs in order to pay for part of that once we do get it fixed. That was all Ben as well.
Ben and I do this all the time. It’s very difficult for first-time buyers to separate what everything means when you’re talking about, “We’ll fix something or credit something,” or because they don’t want to fix it. The reason they don’t want to do that is because it takes time. That could mess up the escrow. Not to mention if they fix it, you usually don’t check it until 3 or 4 days before you close. What if you go to check it and you hate what they did or they did it incorrectly or a shabby job?
When you get credit, it’s the easiest way to explain to people. It’s like, “You get to keep more cash.” Now instead of having to pay $10,000 closing costs, you’re only paying $5,000. Now you move in and if you want to fix the sewer, you can, or you can use that $5,000 for all the other little things you want in the house. That’s incredible. The whole rent back thing, if you’re brand new and you don’t know what’s going on, understand that this is the market now. The rent back thing is a great way. Those of you who are into it know what’s happening.
The cool thing about that is what you guys do by doing that and giving someone a cheap rent back or free rent back. You don’t have any appraisal issues. If you’re going to say, “I need an extra $10,000 so I can stay in this house, or get a storage unit, rent or live someplace else.” It’s a way to up the price without upping the price. Whatever that rent would have cost her or that mortgage would have cost her, you’re now giving it to her by having free rent. It doesn’t change your purchase price, so you still stay at a nice appraisal level.
I will do a whole another episode. I’ll probably do it as a video with a whiteboard to explain that whole free month thing, but there is a free month so you guys have some time. You guys aren’t even in the new house. We’re interviewing you. You’re fourteen hours away from a property that you own.
That’s about 1,000 miles. It’s sitting there empty.
[bctt tweet=”The negotiation part of real estate is 50% persuasion and 50% presentation of the facts to the seller’s benefit.” username=””]
Here’s the big thing I know with you, guys. You got four bedrooms. Is one of the bedrooms for the cats?
It will end up being that way. The way the world has shifted is that people can work from anywhere and that’s what we’re doing. That’s why we’re able to move out of state. I’m sure that this is a very common thing that you’re going to be dealing with.
It’s funny how other realtors call me and say, “You’re a genius for starting this show to help people all over the country.” I’m like, “That’s why I started it, exactly.” It’s true. I got a call from a guy in San Jose in the big tech world. Everyone knows how expensive the Bay Area can be. He asked them and they said, “You have to come back once a month.” He added up a 20% pay cut and had to come back once a month. He still could buy a three times larger house in Charlotte. He and his wife moved in and she got a job there and they’re super happy. The remote living is interesting. For you guys, remote living offered affordability and maybe a different lifestyle too. I’ve seen Portlandia, it looks different than California.
It’s beautiful. It’s the nature that we don’t have out here anymore. The rents around here are going up so much and so fast that we’re going to be priced out anyway. The fact that we were able to do this now is amazing. If I didn’t listen to your podcast, I don’t know if we would have started as well or as soon as we did.
It was something we were sort of, “This is an idea. This is something I want to maybe do in a couple of years.” After talking to you it was like, “This makes sense to do it.” A lot of people, you hear this 20% number as if this is some sort of gospel like, “If you don’t have that, then forget it.” That’s not even close to accurate. One of the things that I’ve kept telling other people is it’s what you had said which is like, “Are you going to let an extra $100 a month keep you from doing this because you have to pay the private mortgage insurance? Is that worth not owning a house?” I’m pretty sure you can probably work that out.
I know someone’s going to be reading this in 2024, 2025. Maybe it’ll be flat by then but your extra $100 a month, how much have you guys made while you haven’t even moved in? That’s what’s scary. Your house has gone up in price and you haven’t even moved in. It’s still going to be that way for a little while. That’s exciting because, for me, it was amazing and wonderful, and also incredibly sad that you’re my friend and I talked to you all the time, but it took my stupid show for you to listen to me.
I support everything that you do.
That is very true. It is funny because my friends won’t even ask me questions because they have the old gospel in their heads. They’re like, “I’ll call David when I’m ready.” I’m like, “I should have named it How to Plan to Buy a House.” Maybe my friends would call me. I’m so excited for you, guys. It’s such a neat story. Do you have any other words of wisdom for people out there besides finding a house where the realtor is dumb and checks the wrong box?
We liked the lender that you’re worked with, Scott. He was very good. He was also involved in talking to us through the whole process and giving us those options like, “We can lock in this interest rate. We can lock it in at a higher rate, and then you get this money back.” He’s showing us these calculators and all these things. He’s like, “I want you to know that you made that decision, and you’re not necessarily being told this is what you have to do.”
Going with a lender that your realtor trust is a way better idea than going with a big online company or something like that. That made a huge difference for us.
They worked together so much that everything was able to just be instant. They’re texting and calling each other the entire time. It’s like a couple of hours and it’s done.
That’s the big thing I always try to tell people. It’s what you were talking about if you call one person, then you get passed off to an assistant or somebody else. You never work with the person whose name is on the door like with Rocket Mortgage, Quicken Loans, LoanMart and all those places. I was watching baseball and LoanMart’s big in the Major League Baseball. I’m sure they do a great job but you’re going to talk to eight different people.
That’s one of the things I’m trying to explain with the show. It’s not just because I’m a realtor, but the realtor is the hub. When you’re good and you do a lot of business like Ben and I do, you have the best lenders in town calling you, and then you get to find a Scott, and you’re like, “Cool.” Now Ben and Scott are Batman and Robin. If Scott does a bad job for Ben, half his business goes away. He treats you like gold. It’s the opposite of a vicious cycle. It’s a fantastic cycle where everybody has to take care of each other and keep it going.
Once the process starts, you have to move pretty quickly on everything. That was what’s surprising. It’s like, “We need that earnest money by tomorrow.” It’s like, “Right away then.” Getting everything in motion, and getting everything signed, and then getting everything to us happened so fast. A lot of that had to do with them knowing each other so well.
It’s like any occupation out there. If you do it well, you make it look easy. A lot of people think, “That’s great.” All you have to do is go online and you’ll see a million horror stories in real estate. Especially now in 2021, being able to move as quickly as we can, being able to negotiate and out-negotiate as Ben did for you guys. All of a sudden you’re like, “It’s our first house, we’re going to take it easy. We’re just up here a few days.” All of a sudden, you realize the earnest money is due immediately and you have to get that in. Get ready to move when you move, but I’m glad that you guys did reach out to me and that I got to plant the seed in your brain, and get you going. I’m super excited for you. Thanks so much for joining us all. I know it’s probably the most exciting thing you got to do.Thank you for your help. It’s been awesome. Thank you. You guys are great. —
That story was amazing. Did you catch the part about the nanny cams or security cameras? That was pretty sick. There are a lot more of those these days, but you’ve got to be careful of the nanny cams because those are the ones that are hidden inside something. It doesn’t look like a camera, so don’t say anything in front of that teddy bear or that weird art piece. It could be a camera. It’s a big one. I tell my clients all the time, “While in the house, take mental or written notes.” I always give them something they can write on. Later on, we’ll discuss what’s going on outside, away from the front door cameras.
Remember, this is a one-off sale. It’s one seller selling one thing, one time. They make the rules and they’re not allowed to discriminate, but they can decide to do whatever they want because they’re crazy. Sometimes people are very emotionally attached to their homes. Think about how emotionally attached you are if you got in a home that you’ve been looking at online when you’re doing your Zillow searching? Imagine how you’d feel if you own the home for 10 or 20 years. You did all the upgrades that you’re watching on HGTV yourself. How proud and emotionally attached you’d be to it? Don’t give those folks in the house a reason to think you don’t love what they’ve done or what they haven’t done to the place.
Another great tip that we got from that episode was, when you’re doing your research and looking at an unfamiliar area, don’t get all freaked out by all those top ten lists. Don’t put all your eggs in one basket and assume that one list is right. Don’t Snopes every single list to try to figure it out. Do what John say he did. He gathered the data and cross-reference them to get a top ten list. If something is mentioned multiple times, that’s probably true. Don’t tell me, “That’s so much work.” How many reviews do you read before you buy sneakers, a tech gadget or something else online? This is a little bit bigger than that. Why don’t you give it the time it deserves? It’s a freaking home. Go deep on your city research and cross-reference everything.
While you’re on the internet, I have to remind you of a few simple safety internet reminders. When my kids were in elementary school, my wife and I had to go take all these classes on how to be safe on the internet with your children. Here are the things I learned. Number one, the internet is the best place for people to bitch, so don’t believe everybody’s nasty, negative comments. Number two, next door is useless when you’re trying to figure out what’s going on in a neighborhood, and it’s built for whiners who have nothing better to do but sit around and whine about coyotes and teenagers on their electric bicycles. Number three, most community boards are built for horrible, terrible people who do nothing but bitch online.
What we are going to talk about now is the last piece that I’m going to give you on internet stuff. This is true. Make sure you source who’s putting up the information. Many bests of the city sites are sponsored by realtors, lenders or local people trying to get you to move to where they are to make them more money. Not because they ever talk to you and figured out where the best city for you to live is. They just want you to come to them. Make sure you curate or you check and see who’s curated all those lists. That’s what you’re buying.
They also talked about the sewer repair. This is something that people ask me all the time. It’s when you’re in a transaction, you have a period, that’s your condition period or your contingency period. That’s where you get to inspect the home. This is not for everybody, but most of you in a traditional transaction. After the inspection, you will get to either request for repairs or you’re going to be able to ask them for a credit for the repair.
There’s a whole bunch of stuff that goes into that. If you’re wondering about the basics of how that works, the inspection, getting the repairs, getting the credit for repairs, instead of me rehashing one more time, go back to about the middle of the interview where John, Adrienne and I discussed it. We discussed that. It’s a non-hypothetical real-life situation for you from a real first-time buyer. You can get the straight scoop from people who did it.
In that same section, we also talked about something very important, the big rule of time and money. Each deal for each home on the market. That means you’re going to have a different seller for each one, and each one is going to have different needs. If they’re not crazy bonkers, or even if they are, they’re going to have different needs. They might be willing to compromise on one of those things, time or money, to get more of the other.
How do you combat that? The best way to do it is to be as flexible as you can on both. Have your finances set and have extra money if you can. Your timing-wise, don’t stress about it. We can go deep into not trying to line up the exact end of your lease and have a month across over. Being able to have that extra time to offer them if they need more time to move out, or being able to move super quickly and paying double rent because you got to get in there quickly, but you’re still in the other place is great. You just move slow, but the more that you can offer on both time and money, the better the chance that you’re going to land something closer to that dream home that you’ve been thinking about.
Another biggie that these two talked about was that the 20% down is not gospel. They made this purchase before they took the time to save 20% down because they knew the math. PMI, $100 a month is totally worth it. I went into detail on this on Episode 40 talking about buying now or waiting. John and Adrienne are some real-life examples of how the math worked for them. It worked for them to go in with a lower down payment instead of trying to save up 20% while still paying their skyrocketing rents. That’s a Catch-22. It’s tough to save money while you’re spending rent every single month. This is also discussed with Madison in Episode 53, and in-depth on Episode 44 on how much should you put as a down payment.
What A Solid Unicorn Team Can Do For You
John and Adrienne also touched on something I want to reiterate. A solid unicorn team cannot only protect you from harm but also can net you a better deal. A lot of times I talked to you about how your unicorn realtor or real estate agent is your best ally protecting you against those gigantic financial mistakes. That’s big.
[bctt tweet=”Take other people’s experiences and let them guide you to find a smoother path for yourself. ” username=””]
Newbies and inexperienced or part-time agents are likely to miss things that might cost you. That’s a big problem that you don’t want to run into. The bummer is they still get paid the same for the transaction but you pay for their mistakes. Sometimes you pay for them during the contract. Sometimes you pay for them at the closing. Sometimes you end up paying for them in the long run when something unexpected that they didn’t know anything about shows up.
Most of the time, these rookies have great intentions, but they don’t have the knowledge to see the hidden things, the hidden fees, the costs and the pitfalls that show up every time you’re buying a home. I feel for them and they probably want to do the best job they can for you but they don’t have the training. I get these lists all the time of 187 things that could go wrong in a transaction. When I used to teach the class to new agents to my old broker, I hopefully try to train them so they could do their job well.
I would put that list out, pass it to everybody, and then have them raise their hands. I told them, “Here’s what I’m going to do. I’m going to read this one by one. When I get to 1 of these 187 things that can go wrong and you can’t explain it to me like I’m a first-time buyer, then put your hand down.” It starts with everyone with their hands up. I told them, “By the way, if you keep your hand up after I read something, I might call on you and ask you to explain it to me.” Everyone started with their hands up and I never got past number ten on that list without every hand in the room being down.
Those realtors that were in my classroom right there were the ones being pushed by the broker to go out, start prospecting, talk to all your friends and see who wants to buy a house. You need to use those first-time buyers to help you gain some experience. Do you see why I bailed and started my own thing? As the first-time buyer, you’re looked at as on the job training. You’re guinea pigs for the new agents to figure out how to do this right so that later on, they do it better for somebody else. The system is so busted.
The experienced agents will have a broader knowledge-base to help protect you. That’s super important. They want to make sure that you don’t overpay or worse, get stuck with a costly situation that other agents without necessary experience might not recognize. What was great about John and Adrienne’s story was that not only did their unicorn expertise protect them from those scary pitfalls, but he also save them even more money through savvy negotiations.
It’s great to protect. It’s better to sweeten and make the deal even better. There was nothing obviously wrong with the home, but he had the expertise to identify a real value in the way the home was being marketed, and then he jumped in and closed the deal. By identifying that mislabeled property that wasn’t getting the full exposure in the competitive market, they were able to pounce on it with a fewer number of buyers. That’s less competition which is a great thing.
That’s not avoiding a mistake. That’s having the expertise as a realtor to know what to look for and finding true value. Once he got into the negotiation, the cojones on this guy, he is confident in what he’s saying because he’s done this before and he knows it. There are lots of young agents out there who are brand-new, and they’re super sharp and bright people. They are maybe smarter than other things before they came over to the real estate. They are super business savvy with a great education, or they got world experience in all kinds of other cool things.
Maybe they even read all the negotiation books ever written, but nothing beats the years of experience and understanding within the real estate industry. It helps us figure out how to read between the lines when we have competing offers. As real estate insiders, we are going to be able to speak the language and throw in tricks and little ways to make your offer. It might be very similar to another offer when you add everything up, but we can adjust it and make it look and feel better. Once the offer is presented, we can explain why your offer is far more likely to close. Ultimately, that’s the big thing a lot of sellers are looking for.
The negotiation part of real estate is 50% persuasion and 50% presentation of the facts to the seller’s benefit. You want to present it, so it looks as most beneficial to the seller as possible. To do that, as a unicorn, you have to understand all the facts and know how to present them in a favorable, beneficial way to the seller, and that only comes with experience. A big part of the presentation when you’re trying to show the benefit to the seller is to show that you’re a valid buyer. A valid buyer is someone who was verified.
You’ve got a unicorn team of a realtor and a mortgage broker that’s verified, not an online brokerage where the listing agent knows you’re just a number to them. You and your unicorn team are vouching for you. You’ve already said, “I already vetted this guy. I vouch for him.” It’s like a mafia except instead of vouching for a guy because he put a hit on somebody last week, I’m vouching for you with pre-approvals, verification, bank statements, credit scores, and cool mafia things like that.
What happens? We’ll keep with the mafia theme. We make them an offer they can’t refuse. You can’t present a Godfather offer and vouch for the stellar buyers that you’ve got if your agent has only been whacking people for six months. That’s not a Godfather. At the negotiation table, you want Don Corleone backing you and vouching for you.
Moving on to the next thing, John and Adrienne are smart cookies. One of the things they brought up, which is a good lesson for you guys, is that even they were taken aback by the speed of things once the contract was accepted. Be prepared. It’s going to move quick. I’m talking super-fast. Once you’re ready to start making offers and then an offer gets accepted, things go into turbo and your spaceship of life goes into hyperspace.
Those stars and planets come whizzing by you, and you’re going to freak out. That is why you don’t want to put the cart before the horse. Don’t go into open houses unprepared if you haven’t done all the stuff to get ready, and then fall in love with the place, then you have to scramble and work backwards. You got to start with the loan. I know it isn’t sexy and fun, but you got to go step by step. We’ve got examples of that in other episodes. You can learn from Alvin and Ashley from Episode 33 who jumped right to step C, skipped A and B, and then called me freaking out.
3 Steps To Avoid Horror Stories
There’s a simple process for you. Three steps to help you avoid the horror stories and get to your happy ever after. Step one, find your unicorn first before you look at any houses or even think about it. Have your unicorn realtor help develop a plan for you, and find an area that you want to make this happen. Build your unicorn team of advocates that treat you like a valued client, not customer number 3,472. Follow the action steps as your unicorn realtor and the unicorn mortgage broker, both are working in your best interest, gets you ready to go. Step three, when you’re all prepared, go out and look at homes. Get ready to write a pitch and offer that’s going to go to the top of the pile of all those other offers, and get yourself a great deal.
One of the things I did want to point out to you is that I’ve had a lot of you that I just met. We ended up doing finding your unicorn or give you some advice. Some of you even come to work with me here in Southern California. Adrienne has been my friend for a long time. She benefited from half a lifetime of friendship to know that she could trust me. Adrienne and John are real people. This is their real experience, and the facts of what happened for them can’t be disputed.
Is this going to work for everybody? No, because all your situations are different. If you have any reasonable intellect, which I know you do, then you can take some of their experiences and let them guide you, so you can find a smoother path for yourself. Speaking of friendship, Adrienne, she’s a true friend because she still sees me as young and relevant, and wants a drinking game for every time that I say that I’m old.
Me being old is good for you as a first-time home buyer. Maybe not drinking while you do your research, but me being older with experience and in the game, I’m old enough to help you learn from not only the things I’ve learned as a real estate agent but also from my mistakes. I rented for too long. I’m doing this now with all the energy of my 22-year-old renting self because I’m so pissed off and passionate about how I did the wrong thing when I was at that age. I made a huge mistake and I want to make sure you don’t.
It’s the experience of unicorns that counts when you’re taking this humongous step. As John said, he was afraid when he talked to some of the other companies and he might be passed on to an assistant. That’s a relevant fear, good fear, valid fear. His unicorn was involved right from the beginning. He became a great guide for them. Anybody can take a phone call from you. They can check your pulse, run your numbers, and then pull up some homes on a computer that says, “You can afford these.” When I say anyone, I mean anyone. You deserve more than that, and you get it for free.
I wasn’t going to do this but I’m going to give you one more tip, maybe 3 or 4. This is one that I wrote down on my notes here. This is going to upset and anger a whole lot of the realtors and brokers out there, but you guys need to know the way this works. I’ve been in this game for a long time. I know the folks that are out there that can help you out. They’re not easy to find, but a portion of experienced realtors out there are still making a good living doing the work with first-time home buyers. Things like asking you about your goals and talking about your finances. Maybe 10% is better than 20% because the PMI is not so bad, and things like that. Getting to know you, getting to know your plan, sharing the intimate market knowledge of the area, but there’s an attack happening.
Zillow, Redfin, Opendoor, and all these online mega giants are doing an incredible job creating these amazing sites. They’re trying to make you think that you can buy a home online. That’s an investor’s game, not a first-time buyer’s game plan. They can do everything online. That’s fantastic but the big tech sites, there are some things you still can’t do online when you’re buying a house. Do you know what they’ll do? They’ll gladly hook you up with one of their agents. They use them to help do the work that they can’t do online.
Who are these folks? They’re either people who’ve paid to have a spot on their website. Do you think they check their credentials before they check their money? No, they don’t care at all. They take the money and they’ll stick anybody up there. They themselves like Redfin will hire some agents who work part-time. Those are the folks they’re going to hand to you. Why do they do that? It’s because they can get those people for cheaper prices.
Either they’re making money off them because they’re buying to be featured agents on their site, or they’re giving the people less money as the buyer’s agents who work for them because it’s more cost-effective for them. They put all their money to attract you and convince you that they’ve got it figured out and that you can do it quick and easy like buying a printer or something else online.
The reason why they get you in and then have you try to do so much of this online, and then give you these part-time or paid agents is because it’s more cost-effective for them. It’s about doing less to get paid more. Future years from now, things may have totally changed, but right now there’s a trick and that’s the unicorns. They grow their business through referral, not Google searches. Their business grows if they are involved and if they serve you well.
John and Adrienne’s unicorn agent actually showed them homes so they could discuss these things in detail. They didn’t get passed off to an assistant, a newbie or worse, a showing agent. This is a term that I’ve heard for the last several years when I’ve been going out to these real estate conventions. This is the reason why I don’t get to sit at the cool kids’ table when I go to the big real estate conventions. This is why the brokers don’t like me.
Showing agents is a thing. They’re not even full-time agents. They’re admin people in the office who are learning how to be an agent. When a good buyer lead comes in for that big realtor, the guy whose name is on the door, they give it to the showing agent. That’s a showing agent. They’re not even someone who is up the ladder. You want someone who buys property, who sells property, who’s involved in the community, and most importantly, in negotiating deals, not just someone who is a door opener.
This entire business is built on this old antiquated idea that you put the sign in the yard, and that’s the way the buyers come and find you. They think that you can’t find information anywhere else. People, have you ever heard of this little thing called the internet? Keep in mind that this industry was built with the guy whose name is on the door, you’re never going to talk to that guy. There’s the listing agent, the person who has 5 to 10 years of experience. He’s the person who goes out there and sells a lot of the big fancy homes in the neighborhood. There are buyer’s agents. Those are the people that have maybe 1 or 2 years, but some of them are 1 or 2 months.
Now, they created this thing below the buyer’s agent called a showing agent. What they think of as these poor suckers with the biggest financial decision of your life. It’s the blind leading the clueless. Don’t be mad that I’m calling you either blind or clueless because you’re supposed to be. You don’t know what you’re doing. Not until you sit down with someone good. That’s how it works.
What you want to do is find yourself a pro-team, a unicorn realtor with experience that’s going to be your guide. Someone to help you find a unicorn lender. You’ve got that unicorn lender and unicorn agent, then you’ve got this whole team of people based on referral-based business and client-first service. You’ve got yourself a unicorn bubble. Madison coined that phrase and I love it. It’s a whole team protecting your little bubble.
You’re hardly going to notice anything inside your unicorn bubble, and the process will be easier than you expected. It’s your choice to go out there and find a bubble, or go online and click on anybody and knock yourself out. Don’t do it. Get a unicorn bubble and find some magic. If you’re looking for one, DM me, email me, join the How to Buy a Home Facebook page.
The best way to get ahold of me is to go to HowToBuyAHome.com or DavidSidoni.com and fill out the contact form. I’ve got hundreds of people that have come in and I’m helping them out. I’m helping them either get hooked up with a unicorn, answering their questions, and getting them a plan. If you’re looking, you can always find me on YouTube and Instagram where I mostly am. I’m also trying TikTok but it’s pretty scary.
The goal is to help you get started on your path. Trust me, the number one thing or the biggest thing I hear from all my buyers is, “Why didn’t I talk to you sooner? I didn’t know of anybody who helped me if I wasn’t ready to buy right away.” Somebody will, but you’ve got to reach out. Ask for help and get the right guidance way before you’re ready to buy a house to help you get started on a plan. Here’s the deal. You start now. I don’t know when it’s going to happen, but I do know it will. You can do this.
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This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!