On March 25, 1967, Daredevil Evel Knievel did his first televised jump on ABC’s Wide World Of Sports. Riding a Triumph, Evel jumped over 15 cars.
ABC didn’t broadcast the jump live, because they thought he’d crash.
Evel would go on to make seven more appearances on the Wide World of Sports. In 1973, riding a Harley-Davidson, Evel successfully jumped over 50 stacked cars at the Los Angeles Memorial Coliseum. The record wasn’t broken until 2008.
Evel Knievel was famous for making big jumps and clearing large gaps.
But when it comes to buying a home, maybe you shouldn’t try to be a daredevil like Evel. Trying to jump from renting to a dream home.
Start small. Start where you can start.
What we're going cover in this article on buying your first home:
1. The Three Areas Of Getting Ready To Buy
2. The Importance of Starting Where You Can Start
3. The Three Things That Make A Dream Home
The Three Areas Of Getting Ready To Buy
There are three areas you need to be ready in before buying a home.
1. Getting Ready Financially
Many first-time buyers think about getting ready to buy a house as being ready financially. Ex. paying down debt, saving up for a down payment, making sure they can afford the monthly mortgage, having reserves, etc.
Fear of finances
Just over half (56%) of all buyers who don't own a home today but want to say they're not pursuing it because they fear they won't qualify for a loan, according to a survey by LoanDepot.
While 71 percent of all Americans who want to buy a home in the next two years will need financing, 89 percent haven't actually taken any steps to see if they could get a home loan. Specifically, three quarters (74%) of people who want to buy a home but fear they won't qualify for a mortgage admit they haven't taken any steps to qualify.
Many would-be-home-buyers take themselves out of the game before they ever get in the game.
2. Getting Ready Mentally (Psychological)
Are you ready psychologically? Are you ready for homeownership?
A lot of energy, focus and time is spent in getting ready financially, but what's interesting is a lot of buyers are ready in that category. But because they're not ready in their heads, they don't even sit down and talk to a mortgage lender.
They talk themselves out of even taking the first step and say to themselves, "I'm not ready because of my finances." or “I have too much debt.”
3. Getting Ready Emotionally
7 years ago we were living in a condo.
I had to go up and downstairs to take Pearl the French Bulldog out.
The best she got for “sun” time was on our patio.
I told Katherine that I wanted a yard for Pearl.
She wasn’t going to live much longer and I wanted her to have a yard.
A yard to run around in.
A yard to sunbath in.
A yard to just got outside with the open of a door.
We wanted a few more things in our home, but a yard for Pearl was the #1 driving search criteria.
We found a home.
It had a yard.
And there was not much else about the home we liked.
But we bought it.
And buying that home, allowed us to buy a next home.
And then a next home.
And here is Pearl (still alive) enjoying the sun and a much, much bigger yard.
Some people might think we settled on that first home that had a yard for Pearl.
But we were clear about the benefits we wanted, not just the features and dimensions of the home.
That home not only gave us a yard for Pearl. It was the home we brought our first baby home to.
I 100% get wanting your home to have a garage, and bathroom on the main level, and quartz countertops (that home had none of those things).
But sometimes you gotta start where you can start.
You’re not settling. You’re starting.
The Importance of Starting Where You Can Start
Again, we don’t have to do a death-defying jump, like Evel Knievel, from Point A to Point K.
Starting where you can start and use that as a stepping stone to your next home and closer to your dream home.
In 2020, millennials were more likely than other groups to believe that they will live in their dream home at some point in their life (research from Coldwell Banker, 2020):
- Millennials: 81%
- Gen Xers: 75%
- Boomers: 67%
From experience, they’re also more likely to postpone buying their first home. (The median age for first-time homebuyers is 33.)
So, Millennials are starting later and expecting more.
But according to data from the Federal Reserve indicates the net worth of a homeowner is actually over 40 times greater than that of a renter. A homeowner’s net worth is $254,900 vs a renters $6,270.
We’re told to start investing early. Max out 401k’s and IRA’s. The same principle can easily apply to buying a home.
We have a client and friend named Sam.
Sam did two things:
1. Made homeownership a priority
2. Started where she could start
Sam recently, bought a new construction home for herself and her daughters. She can afford it easily because she had a 50% DOWN PAYMENT for that home.
Sam works in a restaurant. And 7 years ago, she didn’t have a huge down payment, but she said to Katherine, “I’m thinking about buying a condo.”
With a small down payment, she got into that condo. A few years later, she now had paid down the principle, increased her equity and saved up more money. She sold the condo and bought a townhome with a 20% down payment.
That first step and next step allowed her to get to a new construction home with 50% down.
The Three Things That Make A Dream Home
We define a dream home as a home that is the location you want, the style you want, and at a price, you can afford.
Typically you’ll get two out of three.
If you want to be in that great location, to be able to afford it, you probably won’t get the style you want. For example, maybe it’s a two-bedroom, dated, condo, instead of a three-bedroom, brand new, single-family home with a yard.
Or maybe you want a certain style of home. You want a modern farmhouse style on 5 acres. And because of the price, you can only afford up to $X. You’ll probably discover that the location won’t be as ideal as you’d like. You’ll be further out of town, or in an area that would not be your first choice.
But if you are lucky enough to able to get all three without sacrifice or compromise... Congrats, you just got your dream home.
The reality is though unless you’re a start-up millionaire, celebrity or professional athlete, your first home probably won’t be your dream home.
But your first home can be a stepping stone to your dream home.
If you're ready to take the first step into learning more about how Cantrell Persinger can help you buy your first home. Check out our proprietary guide, '7 Costly Mistakes Home Buyers Make.'
One of the things that keep people where they are instead of where they want to be is misinformation and myths. Side-step these mistakes and save yourself time, money, frustration and disappointment during your home buying journey.
Instant download by visiting http://costlymistakeshomebuyersmake.com
When you are ready to get your questions answered, let's talk. We have a process that helps you get your money right, find the right home and write the right offer. Over 50+ combined real estate excellence and expertise can show the first steps and the next steps in a quick call.
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