Ep 65 – Where Do I Start, What’s An HOA, When Can I Get Down Payment Help, Who Is The Best Lender, And Why Is This So Confusing? 

 December 7, 2021

HBH 65 | Down Payment Help

How do you buy your first home? When can you get down payment help? These are questions that first time homebuyers wrestle with. In this episode, David Sidoni guides you, so you won’t get lost in the labyrinth of convoluted information, as each new piece of information has a new term that leads to more questions. You may wallow in confusion conundrum or the who, what, when, where, and why. Do not fret – your answers are right here, ready to be inserted into your earholes. Tune in! 

Where Do I Start, What’s An HOA, When Can I Get Down Payment Help, Who Is The Best Lender, And Why Is This So Confusing?

The Who, What, When, Where, And Why For First Time Home Buyers

Who, what, when, where, why? I tried to do that order. I couldn’t deny that the first one had to change, the biggest first question from people about buying their first home. It doesn’t follow that order because the biggest question is always, where do I start? This episode is a first-time buyer guide to where, what, when, who, why.

We are going to be getting into it. I’m so excited about it. Why? It’s Saturday night. It’s me and my dog in my office. My where, what, when, who and why episode. The number one question I get is, “Where do I start this whole thing?” We’ll then talk about, “What the hell is an HOA and should I pay for it?” We’ll talk about, “When can I get down payment help?” Our who is going to be, “Who’s the best lender for you,” and our why is, “Why is this all confusing?”

Where Do I Start

The biggest, most frequently asked question is, “Where do I start?” Don’t feel bad that you’re forced to ask this. There are plenty of things you’ve done in your life that you could feel worse about. Admit it. You’ve got bad things. It’s all right. I don’t judge, but I know you’ve done stuff. A lot of you out there think that you got all the research at your fingertips. No matter what it is in life, you can discover the best, smartest, frugalist, most consumer-friendly ways to do anything since you have the world wide web right there in your pocket, and you’re way smarter than those dumb Boomers.

What do you do? You search all the articles, the reviews, the consumer-centric blogs, and you get tons of information before you do anything. I feel you. I admire it. Trust me. I learned from a lot of younger peeps to show me how to be a more savvy shopper using the internet. The bummer with being a first-time homebuyer is that almost the entire real estate industry is trying to run away from you.

Their goal is to move up in the business away from first-time home buyers and not work with you. They don’t market to you. They don’t put the good stuff out there for you because they don’t want you to come knocking on their door. There’s not a lot of decent information out there for you to research. They don’t do any publishing. They don’t put out big articles. Most of the stuff that you’re going to see out there it’s either from new inexperienced agents, God bless them for working hard, but most of the info they have is from a class they took, not real-world experience.

What freaks me out is that a lot of the information you find online it’s from non-realtors. Everybody’s got an opinion about everything. Most of the stuff you find online about first-time homebuyers is bloggers and vloggers who bought a home once or twice and they’ve crowned themselves the experts. Google it. How many long-time pros do you find advertising and marketing to you, the first-time homebuyer? Not a lot. It’s this giant void of your research.

The old realtor mantra to first-time homebuyers is, “Save your money, figure it out and call me when you can afford it.” That’s pretty rad. You’re sitting there thinking, “What do I do in the meantime? Where do I start?” To answer the where do I start? It’s actually a when. It’s right now. If you’re reading this and you may think, “I’m doing something now.” That’s good. You are. It’s important that you understand that where you’re going to start is going to be different for everybody. You’re all reading, but you’re all at different phases.

The key is you have several steps of doing no matter what phase you’re in that you can be doing now. I saw something on Instagram and I love this. It said, “You don’t need to be ready to get started.” You start by understanding what you need to buy a home. If you don’t have these things, then your first step is very simple. You work to get them. That’s your goal.

[bctt tweet=”You don’t need to be ready to get started.  ” via=”no”]

When do I start? You start now. You start getting these three things. Number one, you need a steady job. Number two, you need some income that you can verify through pay stubs, or if it’s a new job, a contract, or if it’s self-employed two years tax returns that show the income. Number three, you need a down payment. Those are the three things you need. I give that to you, assuming that you don’t have the cash to buy a house, but if you want to know where you start, you start with those three things. Have a job, be able to show your pay for your job, and then save up for a down payment.

If you don’t have all that stuff, unless you got a big pile of cash hiding somewhere, you’re going to need it because that is what a lender, a lending institute or a bank is going to need in order to give you a loan to buy a house. You start by putting that on your dream board or your vision board and you start working for that.

The cool thing is simultaneously, while you’re doing that, you can also build your credit score and also build your savings account. I highly recommend starting an automated savings account. You can also start living on less. Tips for all that stuff, automated saving and your credit score, it’s all back in some of the old episodes in the podcast using the 70-10-10-10 method that I’ve described in previous episodes to help you with your saving.

If you’re new to the show, starting at Episode 19, there’s a seven-part series on how to financially prepare to buy a home. I do repeat that one often in all my shows because as you move up in your phases, some of those episodes and you thought, “That stuff’s never going to apply to me.” Maybe now it does.

Also, check out the rest of the show to look for topics to help you and binge all of the episodes. Binge all of the episodes. Why? Because then you’re going to be more prepared. You’re going to learn everything about contracts, lenders, bidding wars and market conditions. When you go do that stuff, it’s not going to be the first time you’ve ever heard it. If you’re more of a reader, go to DavidSidoni.com or HowToBuyAHome.com and you can find the transcripts. Print them out, copy and paste them in your word or your pages, and then pick the parts that you need to work on and put them up on the fridge. Don’t just read, do. Apply things and start now.

For those of you who have those three things and you’re here to figure out, “I do that. I’ve been paying rent for 2, 3 or 4 years. What do I do now?” Even if you only have a dollar saved for your down payment, you still want to know where do I start? This is going to sound weird, but having a lot of people reach out to me, I think it’s because of the whole pandemic and working remotely that are telling me they want to live in multiple different places.

The first thing you need to do is you got to pick a place to live. I know that maybe we’re working remotely. You got to live wherever the hell you want, but if you have several places that you can live and you reach out to me and go, “I’m ready to go. I want to live in five different places. They’re in different states and different time zones.” The trouble with that is you can’t get a rad unicorn team working for you in five different cities in three different time zones. You’re going to have to narrow that down using your best friend, the internet.

Episode 10 has a whole lot of tools to help you navigate the web to research homes and neighborhoods. Thanks to my pregnant friend at the time, who was using her maternity time to become an online home shopping pro. She had that baby and she had a second baby. I was Zooming with them because we’re talking about selling the condo that we purchased in 2019 for $454,000. We’re going to sell it for $600,000 and they’re going to use the equity and all that profit and go buy a bigger home because they have way outgrown that place.

Down Payment Help: No matter what it is in life, you can discover the best, smartest, frugalist, most consumer-friendly ways to do anything since you have the world wide web right there in your pocket.

Some other things you can do to get started because where do I start? You start by researching the areas you want to live. Other readers have suggested curating a top ten list. Those top ten about all the things in the cities, by cross-referencing several lists to find items that you keep seeing, showing up on lists, the repeat items that corroborate your findings.

Whatever you’re looking for. If you’re looking for fun things to do, safety stats about certain areas, getting information on schools, parks, hiking, public transportation and all that stuff. Do your research and try to figure it out. We start seeing stuff that appears on several top ten lists. Then it’s probably a good bet that that’s legit.

Where else do you start? Automated savings. Even if you got all that stuff and you’re getting ready to buy. I’m hesitant to say this because some other people out there say cash is king. They tell you to try to buy a house with 20% down or as much cash as you can. I’ve got certain thoughts on that. All the extra money that you have moving forward will only help you be able to make better decisions for yourself.

If you know nothing and you still need to research all the next steps. I can tell you one thing you can do now. Automate savings. You will need money when you’re buying a house. It’s right there in the phrase, “Buying a house.” Once you’ve got your automated savings set up, here are some of the things you can do to start now. Less lattes, rely on ramen. Stop silly spending. Those are all alliterations that.

That’s the holy alliteration trio of saving money. Less lattes, rely on ramen and stop silly spending. Silly spending is big because I know those new shoes are fresh, but what’s more attractive than a fresh outfit or dope new ride? Homeownership and stability. Do you want to turn someone on that you’re trying to impress? Ask them to come over to your place. You own it. Say, “We can work on some fun crafty DIY stuff.” Why does date-making pottery at some place making a crappy bowl that you’re never going to use when you can invite someone over to the property that you own and have them help you install custom shiplap?

The biggest question that I get asked has the answer right in the question. Where do I start? Start. That’s the key. Start automated savings, work on your credit, bingeing the show to get the next steps in the plan, and make this plan a goal, not a someday dream. Dreams happen when you sleep. Reality happens when you’re awake and you take actions, even small ones.

The show has been going well. I’m getting readers to reach out to me and tell me, “I had no idea. I could do this. You changed my life.” No, I didn’t. You did. All I’m doing is giving you guys the tips, the tricks, the know-how, insider information, the confidence to find these steps and to follow the steps. You did it. You changed your life.

All you needed was that confidence and a little bit of humility to believe that you don’t know everything, you can’t research everything. You do need a team to guide you and take the reins. This is bigger than a click on an app. Start doing what you can. If you do all those things, getting all those things happening, it’ll take you at most a weekend to get all that stuff going. You reach out to a unicorn team in your area and you build the plan, no matter what phase you’re in if the plan is for something you want to do in 3 weeks, 3 months, or 3 years.

[bctt tweet=”Don’t just listen. Apply things and start today. ” via=”no”]

What Is HOA?

On to the what. What is the deal with HOAs? HOA is an acronym for Homeowners Association. My completely non-PC dad calls them the HOA Gestapo or the HOA Nazis. He says it purely in a derogatory way. That’s still okay if he says it like that. Frankly, it doesn’t matter. He doesn’t care if you cancel him. He’s retired living in the Midwest. The biggest thing that we talk about these days how on earth he’s going to get a gardener to handle all his unique lawn issues.

I keep telling him, “Dad, stop Googling yellow pages gardeners. Angies List, TaskRabbit, Yelp, come on, dad. Get with it.” We all agree Nazis are bad. My dad thinks that most HOAs are Nazis. They’ve got a pretty bad rep. I get it. A lot of it is deserved, but some of it is people being mad because in their area, they can’t afford a home without an HOA and they want to paint their home a different color.

The way I explained to everyone is you need to think of HOA as a necessary evil. When you’re trying to buy your first home, HOAs are part of what you can currently afford. Plenty of first-time homebuyers can’t afford what we call a single-family home, a standard house, picket fence, walls not attached to anybody else, a little yard, the whole thing. In other more expensive areas like in the area where I live in that whole Norman Rockwell dream, a house with the picket fence, it ain’t happening. You’re not starting with homeownership. You’re starting with condo ownership or townhome ownership.

I know things are different. Feel free to scream out the window. “Boomer, things have changed since you got out of college. I know back in the ’60s, you bought a cute little home for $18,000.” Buyers nowadays, you got to do things differently. You’re going to have to utilize the smart option of buying your first condo instead of paying rent on an apartment that is the same type of living space.

The HOA is there, part of that condo and townhome living. Why? Oftentimes the units are attached to each other and part of one large building. The units are sold separately, but that means that there are decisions. When you have a structure that is divided but still has the units attached to each other, that one structure is going to have decisions based on the structures, the landscaping and other areas surrounding that are communal areas.

That means that decisions are decided by an association run by a board. That’s usually of homeowners in the community. Pretty much with people with nothing else to do. They’re super fun. You pay dues to the HOAs monthly and then the board operating on your behalf. They work with a management company to decide how the funds are allocated.

Here’s some you need to know. HOAs will have restrictions on what you can and can’t do on and inside your property sometimes. Yes, it is an extra monthly fee on top of your PITI payment, your principal, interest, taxes and insurance plus HOA. Also, you might end up getting some perks with your HOA that you wouldn’t get with a regular house. You might get community areas that are going to be maintained by your dues. You’re going to get pretty landscaping possibly. Sometimes, they’ll have green spaces or parks or what they call top lots, little areas with playgrounds.

Maybe you’re going to have a pool area or spas, gyms or barbecue and other recreational areas. Sometimes you get security in the security gate and sometimes you can get a community clubhouse. Sometimes you’re paying to get some extra stuff right there in your community. Most importantly, the thing that most of my first-time buyers, I realized that no one has told them, once again, another great reason for me starting a podcast and sitting in the dark with my dog.

Down Payment Help: The bummer with being a first time home buyer is that almost the entire real estate industry is trying to run away from you.

The one good thing about the HOA is this. Remember the PITI payment. What’s the second I for? Principal, interest, taxes and insurance. What is your insurance for? Most HOA dues will eliminate your I. You’re getting an extra fee, but your PITI went to PIT. The HOA has to cover the big insurance issues because everything’s all connected. That’s the reason you get the I in PITI. It’s homeowners’ insurance.

You have to buy that for a standard single-family home to protect the stuff inside the house, but you’re also protecting the big stuff on the outside. That’s where the big fees come for the roof, the foundation and most importantly if your house burns down. That’s the big three in homeowners’ insurance. That is covered by your HOA payment.

Here’s an example. If you’re buying a home in Southern California, a $700,000 home if it was a single-family home, it’s got no HOA, but you’re going to pay probably $125, $150, $200 a month to get insurance for the big three, the roof, the foundation and the fire. It does cover some of the things on the inside too, but it’s going to be in the hundreds for that.

If you can’t afford a $700,000 house in the area, then you’ve got to jump down to let’s say a $600,000 condo or townhome. You’re probably going to pay $300 to $350 in HOAs dues on top of your PITI, but remember, no, I. It’s just on top of your PIT. I get buyers that freak out when they’re looking at the HOA dues. They can afford the $700,000 house, but they’re still freaking out about the extra payment they have to do on the condo because the $300 only covers some landscaping. That’s all they think it is.

They think, “The money is for the extras.” No, it’s also for your big insurance payment you would have on a house. That’s the big thing in the PITI. Your I goes away with an HOA and your structure, roof, foundation and the fire, it’s all covered. It saves you monthly money. That’s all part of your $300 and $350 HOA payment that you have.

You still have to get walls in insurance, they call it, but it’s really cheap. I tell people right away, when you look at a $350 HOA, knock $100 off that and think you’re paying $250, or maybe even $200. What are you paying that for? You’re paying that to be part of a community, to have maybe those extras, a pool, barbecue area and some green space for you. You’re also paying it because you can’t afford a $700,000 house.

That’s how it works. It’s the PIT versus PITI in the PITI fund. That’s a fun acronym question. PITI and HOA. Here’s a question from one of my readers about HOA, “I’d like to see an episode in the future focused on HOA fees. Mostly because I’ll find a nice house in my price range, and it’ll have a manageable $200 to $350 monthly fees, which seem reasonable.” Then a similar home in a nearby community will have a budget-breaking $600 or $850 per month HOA fee.

Some of these houses turn into rip off when you have to smack on top of HOA fee along with your mortgage. Where did the money go? Did it go to the land or the community? She said, “Your advice travels through my earholes almost daily. Even with a former realtor as a father and half a finance degree into my belt, I still learn something every episode. One last thing, just so that you know, I know I can do this.”

[bctt tweet=”Understand what you get for what you pay. ” via=”no”]

First of all, to the reader, I’m glad I can supplement the knowledge you’re getting from your dad and half a finance degree. Let’s fill in some of those gaps. Many questions that I get, the answer is better answered by your local unicorn, even though I do care about all of you and sound arrogant because it’s fifteen years of me and I’m so frustrated with all the bad information out there. I want you guys to understand that somebody out there wants you to get the right information. I know that it’s frustrating to know that you need to talk to someone local, but that’s because I don’t know everything.

I can go for different cities in the county that I live in and their different rules. I don’t know what’s going on in your state or your county. It’s important to know that sometimes there is a total logic to these dues. To understand why they’re hundreds of dollars different. I don’t know those answers. Maybe you don’t see the major benefits or the difference, but a local unicorn can help you figure that out.

Sometimes it makes perfect sense. There is a reason for the difference. I will also let you know that the frustration that she had, it’s true. Sometimes it makes no sense. The community just thinks a lot of themselves and they’re hoity-toity and lame. I usually advise to pass on those homes, if it’s my buyers in the area and the HOA is too darn high.

The issue that readers having is that, you’ve got to do some research and look into what matters to you specifically. Is it living in those communities with high HOAs? They’re paying for the hoity-toity and if that’s something that’s important to you? You’ve got to pay for it, or should you be expanding your search to other areas without the dues?

You might not love my answer because the answer is more work for you when you’re trying to compare houses and you’re looking for the simple explanation, but it’s houses and sellers. Sellers are a one-off sale and they can individually do what they want. Condominiums and townhome complexes are individual entities that can make up their own rules and whoever buys, buys.

You got to learn the difference. You got to get the information and then you have to compare the apples to oranges. I know sometimes it’s like comparing bananas to screwdrivers, but it’s all about understanding what you get for what you pay. Your best bet is to interview and find a local professional who can help you with the details. You can always hit me up for a local unicorn, throw them in the mix, and see if they’re the person that’s going to be able to help you out the most. To the reader, I love your dad and your professors, and they’re probably cool people, but you need a unicorn.

When Can I Get Down Payment Help?

Now we get to the when. “When can I get down payment help?” I hear this one all the time. “I’m ready to go. When can I get it?” There’s a bunch of different philosophies on this and my answer is going to be a little bit blunt, but there are two reasons. Real talk number one. Most of the time, my first-time home buyers over the last many years, they’re using low downpayment options that are not first-time buyer grants. It’s a low downpayment option, a 3.5% FHA loan.

If this is something that you can’t get to, if you can’t save up 3.5% for down payment on a home, are you sure that you’re balancing your budget well enough to be sure that when you purchase this home, you’re going to be able to pay your mortgage without any problems? That’s not me saying that. That’s me getting real with you and trying to make sure that everyone who does this is successful.

Down Payment Help: What’s more attractive than a fresh outfit or dope new ride? Homeownership stability.

I want you to work on a budget so your plan sticks. I’m also getting realty on this because you know who else looks at it like that? The banks, the lending institutions and the people lending you money. The people granting the first-time buyer grants, if you were so lucky enough to get one, they look at it the same way, too.

Real talk number two, real reason. Why are the first-time buyer grants not so great? At the end of 2021, it’s a big-time sellers’ market. For real, being a buyer is a fricking battle royale. It’s competitive. The terms you offer matter to the seller. They’re looking to stack offers. They want to pick the buyer that won’t have any issues with financing and won’t fall out of contract. If they’re choosing between 5, 10 to 15 offers, they might even take less total overall money to choose the offer that seems the most likely to close for sure.

I was looking at homes for a client and three of the homes that we looked at had fallen out of escrow. One of them is under contract. One of them had gone in and out of contract twice and was under contract for the third time. They’re looking for the one that’s most likely to close with a bigger down payment and more extra cash. If the buyer has extra cash, they can use that for whatever comes up, if it’s inspections. That offer is most likely the one to get chosen.

I have buyers with 20% down and extra cash getting beat out by offers with 50% down or cash offers. That means that our 20% offer downpayment got passed over and below us there are other offers at 10% down, 5% down, 3.5% down, 3% down, some VA loans at zero down and at the very bottom that’s where the buyer assistance buyers are. I know it sucks. Those are my two for real reasons. If you’re looking at a first-time buyer grants, I will tell you don’t give up. The worst thing you can do is look into it, start your plan, create a budget and maybe even give it a shot with the grant programs.

On the opposite side of this, I was talking to a unicorn in Albuquerque who said that she’s making it happen for buyers because they’ve got something there in New Mexico, it’s the MFA, the Mortgage Finance Authority and it’s down payment assistance. They help you with the first loan when you qualify for that. The assistance is a second loan that’s attached to the first. Sometimes that second loan was even forgiven. She said that it’s even working in the competitive market if you’re using the right realtor.

Once again, it’s all local knowledge that is the key to getting the best service and giving you all these opportunities. She said that they act as a secondary underwriter and there will always be some restrictions and guidelines to these. In this particular one in New Mexico, there’s an income max. Sometimes you can make too much money to be eligible for it. You cannot own a home in the last three years and can’t use it for manufactured homes, not on a permanent foundation.

If you’re thinking, the only way you can buy a home is with some downpayment assistance, here’s my suggestion. Start like that’s going to happen for you, but at the same time, start like it’s not going to happen for you. Start a budget, savings plans, get a unicorn to see if they’re available in your area, and if they’re not there, at least you can start your plan. Instead of dreaming about it. Things are going to change all the time, including the housing market. Eventually, it won’t be this competitive. The lending guidelines, maybe you’ll get better, new and fun-fangled products to help you out.

Who Is The Best Lender?

Moving to who. Who is the best lender for you? I will say it again. First, friends don’t let friends use online lenders. Don’t do it. Here’s an exchange between a audience and me who’d been referred to a unicorn mortgage broker, but then asked me the big question. He wanted to go out and look for competitive rates. He wanted to shop the rates.

[bctt tweet=”Start your plan, create a budget, and maybe even give grant programs a shot.” via=”no”]

A spoiler alert on what happens in this discussion. “Stop shopping rates. Change your mindset. I’m not telling you not to go out there and get the best deal. I’m helping you get the best deals, but shopping rates is shopping the wrong thing. You need to be shopping service and the fees they charge you to do the loan, not the rates.”

How do rates work? Rates are like gas prices on the same corner. If you’ve got a few good lenders that you’re working with and they’re all serving you well, and they all are charging you about the same to give you that service. Then they’re like three gas stations on the same corner. They’re all within one penny of each other with the rate. The financial market sets the rates. In this case, the corner, they all need to be around the same price because if one of them was higher, they would get no traffic. The rates are all set by these big banks and Wall Street. They change multiple times throughout the day.

I have buyers that do this. They’ll shop and they’ll get one rate for one guy. The next week they’ll get a rate from someone else and they’ll go, “This rate’s way better.” I’m like, “You’re not buying.” They can’t guarantee you that rate. It’s not what we call locked in. The rate was different because the rate changed. When it comes to shopping rates, you have to change your mindset and any good mortgage broker does the rate shopping for you.

They’re going to shop for the best rate for multiple sources at the time when you apply. The best rates will all be the same from different lending institutions based on your approval. Everyone will be pretty much at the same place for a borrower like you, based on the current market rate that all the investors and lenders are getting from Wall Street. The mortgage brokers going to shop for you at that moment and give you the best rate. A mortgage broker shops the rates for you.

I like the lender to clarify it was a mortgage broker that we send them to, but people get that confused. I want to make sure you understand. “Do you suggest checking out other lenders as well to see if we can find competitive interest rates?” I replied back. I hear this all the time. The short answer is “You don’t need to when you work with a good mortgage broker.” He said back, “With that said, you must have seen a lot of mortgage plans and would have a good idea of the interest rate I got is already competitive.”

I replied back. “There’s a common misconception that someone else has different rates or better rates. What you’re shopping for is the service. They’re all offering the same rates for the buyers, based on the buyer’s approval.” You determine the rate. If you’re going to a mortgage broker who’s shopping it, not be individual lenders. If you go to a bank, they only have a few products and credit unions have less.

A mortgage broker like the one that we sent you to shops your approval to all the banks and the investors and finds out the best rates available for you based on your qualifications. Keep in mind everyone’s rates change daily, multiple times based on the market. Quotes from someone yesterday, won’t be the same as today. That’s why I trusted mortgage brokers the best way for you to go, because they’re going to shop, and they’re going to be able to find the best one for you.

What you’re shopping as a consumer is the fees, they’re going to charge to do this and the service that you get. I told them, “I know it goes against everything people now know in the digital world of shopping deals online, but you’re not buying a TV on Black Friday.” The service you will get is going to help you overcome the hurdles and there will be hurdles and that service is priceless. He said, “That’s great. Thanks for clarifying and it’s super detailed.”

Down Payment Help: Lenders need to be around the same price because they would get no traffic if one of them was higher.

What does this whole thing mean? You determine the rate if you’re going to a mortgage broker. He’s going to shop around and get you the best rate based on you, not the individual mortgage broker. Now, if you go to a lender who only has a couple of options like a bank or a credit union who only has maybe a couple of options, in that case, their rates might be set a little bit higher, but if you’re at a mortgage broker and you’re shopping everyone your credit, your debt and your income will determine what the best rates are for a borrower like you. The lender or bank out there, they’re going to give you those best rates.

A good mortgage broker will have all those products available to you, including the ones you would have gotten. I have mortgage brokers that people say, “I’m going to go to Wells Fargo instead.” I’m like, “This broker has Wells Fargo and they’ve got 25 other products.” Does that make sense? The rate is based on you and your qualifications, and then they find you the best rates available for your specific buying needs, based on shopping it with a bunch of different lending entities.

I was literally copying and pasting this and I got a text from someone who’s deep into the buying process. I got them hooked up with a unicorn. They had this question. They said, “Every everything’s fine in the moment. I had to do a little bit of pause in my approval because of my 1099. Here’s the deal. I’m a contractor. It’s hard to get approved. I’m wondering if you know any loan officers besides who I have been talking to, who are experienced in working with contractors and 1099 people that are willing to help me and guide me to a successful experience.”

I typed back, “I’m seriously sitting at home with nothing but lousy college football games on. I’m writing a new show and typing on this very subject. I run into this 1099 question all the time because what you show on your taxes is your income.” I told them, “Keep in mind, I’m 1099. I know exactly what you’re going through.”

The best way to attack this is to get with a realtor first and then get a mortgage broker reference from them. Talk to a few of their best mortgage brokers and then explain your situation. They’re going to have suggestions for you. If you do that, that way, you’re going to have the full team working with you. I told him, don’t get beat down. We help people buy homes with 1099 income all the time. There are ways to make it work.

The question about what lender do I want, start with a realtor, despite what the internet tells you. “They are wrong, selling, trying to capture you and have you fill out that form. Your phone and email will blow up with telemarketers. Believe me.” I had a client do that and they told me the date and they went and showed me their phone. They had like 63 phone calls, texts, contacts and emails in a matter of a couple of hours. Friends, don’t let friends use online lenders.

Once you get yourself a unicorn realtor, you get a unicorn mortgage broker, and then you have your unicorn bubble. Episode 53 explains a good unicorn bubble. It’s your best protection. My insider trick to help you avoid the telemarketers and bushy salespeople. Most importantly gets you excellent service and excellent pricing.

Why Is The Process So Confusing?

Finally, our why. What do you think of when you hear why? It depends on where you are in your life. People hear different ways. The why we’re talking about is why is this so confusing? I wish I had a nice answer. The answer is because very few people have all the answers that can help first-time buyers. Very few of them want you knocking on their door and bringing them the business. They want you to come to them all figured out.

[bctt tweet=”Start with a realtor despite what the internet tells you. ” via=”no”]

If you want to know why the industry pros don’t put a ton of info out there to help you beat the confusion. I tell you all that in the first few episodes of the show and I repeat it quite often, it sucks. It’s not right. You deserve more. I started the show to be the answer. The answer to why is this so confusing? Especially at the beginning, when I went off. It’s just as confusing because you’re doing it without any understanding of what’s going on. It’s like trying to plan for something in another language with no translator.

It’s confusing because it’s like trying to play a new video game with no instructions or hints. It’s confusing because you can’t go out and build a house. If all the contractors and architects and all the YouTube tutorials are never published, if they’re all hidden. Your only resource is some guy who has a YouTube channel, tried to build a house once and probably had nothing but problems. This sounds crazy, but it works in your favor, in this case, short temper and frustration with the industry and desire for fair play.

I was pissed off enough to rearrange my entire business and make this show and not only for great resources out there for you and give you them in every episode and tell you, what are the few good places out there where people are going to tell you the right things. I’m also sharing my years of experience and my daily experiences with buyers that are happening.

If you’re confused, the good news/bad news is I’ve got 60 something episodes to help you. That’s the good news. The bad news is that unless you go to HowToBuyAHome.com or DavidSidoni.com and print up the transcripts, then you have to listen to me and my bad jokes mixed in with the years of information made for you.

Speaking of bad jokes. It’s worth it. Why did the first-time home buyer cross the road? It’s because they were inside an open house and the smell was killing them. It was an open house they went to look to that they saw online. It was $100,000 less than all the recent sales. That home backed right up to a sewage plant. They thought they were sure going to get a killer deal because they’re super smart and they found this deal. They went on their own without talking to a professional in the area who could have told them about the stink factor. That’s why it was priced so low.

They think that realtors are dumb and a waste of money. Even though what they don’t understand is that they’re free to a buyer and don’t cost you anything. They were sure they could get a killer deal on their own by using the internet. Yet what’s interesting is they neglected to use that same internet to use Google Maps, satellite and see the dump in the picture right there before they went to the house. Hilarious joke.

Who, what, when, where, why, I did it in the right order of the time because I’m going to sum things up in a different way. Who are you going to call? Ghostbusters, then the How to Buy a Home team. We don’t call anymore. You go to Instagram @DavidSidoni send me a DM or Facebook, the How To Buy A Home group, or Twitter’s @DavidSidoni. I’m not there a lot, but whatever messaged me there. I TikTok, you want to see me dance around like an idiot, go to @HowToBuyAHome. DM me, message me anytime. That’s who you call Ghostbusters and David Sidoni at DavidSidoni.com or HowToBuyAHome.com.

What do you need to do? That depends. There’s no one answer. You need to ask for guidance and get the local information that’s right for you. Get a pro. When? Now. No matter what stage you were in, you get guidance from pro and get the next step done better. Where? HowToBuyAHome.com. Why? If you read all of this, I’m guessing you’re down with this idea. The big why? Because you can do this and renting sucks. That’s why. You can do this.

Important Links:


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!


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You Might Also Be Interested In:

Ep 217 – Interview With Millie – How To Buy Your First Home Before Turning 30
Ep 218 – Interview With Brian Friedman – How And Why Creatives And Artists Should Buy Instead Of Rent
Ep 215 – That ADU Guy Interview – The Ultimate House Hacks To Make Buying Affordable
Ep 216 – PMI Is Still A Privilege And Still Not The Devil