Young Scrappy Money Podcast Ep. 031: Tips for First Time Homebuyers with Stacia Smith

podcast Jan 21, 2020

Atlanta real estate guru Stacia Smith dishes on all her favorite tips and tricks for first time homebuyers, including when/why to buy vs. rent, how to tell when you’re ready, calculating the perfect down payment, and what to expect from the process. Join us as we demystify one of the biggest purchases of your life!

Resources from this episode:

Full transcript:

INTRO 

[00:00:00] Hello. And welcome to the Young Scrappy Money podcast. I’m your host, Michelle Waymire. And each week, I’ll be bringing you tips and tricks to help you take control of your finances as well as interviews with people who made big financial changes in their own lives. So join us. And we’ll help you get your financial s**t together. 

MICHELLE: Hello, everybody. Welcome, welcome to another episode of the Young Scrappy Money podcast. We’ve talked a lot about real estate recently. I feel like there’s been a couple of great episodes on real estate investing. I have shared with you my excitement and my struggles that come along with buying our first home. 

It’s really something that I’ve been getting a lot of questions on recently. And so as— as strange as it seems, we’re gonna get back into real estate again today. But we’re gonna take a little bit of a different approach. So rather than focusing on it from the investment standpoint, I really wanna talk about it from the first-time homebuyer perspective. 

And I mentioned before that we recently just became first-time homebuyers. So this is definitely a topic that has been fresh in my mind. And I’m excited because one of the things that I have come to appreciate about buying your first home is it is so vitally important to kind of assemble your dream team. Like you gotta get your squad on lock before you go through this stressful process. 

That means you gotta get your realtor, right? You gotta find a good mortgage lender. Like those are the people who are really gonna help you navigate this process. And so as I was thinking about putting together this episode, I actually reached out to the realtor who helped us buy our first home, Stacia Smith. 

Um, she’s actually been helping buyers, sellers, investors with all things real estate in the metro Atlanta area since 2006. So she’s now a member of the Harry Norman Realtors team. Um, and she is actually with us today to chat all about being a first-time homebuyer. Welcome, Stacia.

STACIA: Hey, Michelle. I’m very happy to be here this morning. 

MICHELLE: I wanna kick off with the first question. So some people might be listening and know already, yes, I wanna buy a home. Or, this is a big move that we’re looking to make. Some people might still be on the fence or trying to crunch the numbers or make this decision for the first time. 

So let’s start off with some basics. Why— why should somebody buy a home? And how do you decide whether to rent versus buy? 

STACIA: OK. Well, um, rent versus buy, let’s talk about that. Um, we all know that right now in Atlanta the rental market is very tight. Rents are very high. Um, and it’s very hard to get a rental unit. Um, there are more renters out there than there are available units. 

Um, also, there are a lot of restrictions when it comes to renting. If you have a dog, for instance, or really any pet, no one wants to rent to people with pets. So if you’ve got furry friends in your family, it’s really hard to find a rental. 

Um, with a rental, there’s a lot of restrictions on what you can do. Uh, you can’t paint. You can’t customize at all. Um, I also know a lot of families that get settled into a rental, especially if they want a specific school district. And, uh, after a year or two, the landlord decides they wanna sell the house. And then they’ve got to scramble at the last minute to find new housing. 

If you own your home, no one’s gonna ever kick you out. You don’t have to leave. You can stay and be more stable. Uh, you can have a dog, a cat, any pet that you want. You can paint. You can customize. 

Also,  rates really are still very low. So you can— if you can afford rent, the average rent in Atlanta, you can afford a mortgage payment. Um, and you’re probably going to end up paying less per month than your average rental rate. 

Also, if you’re paying rent, you’re paying somebody’s mortgage. You’re paying somebody’s investment and building equity for somebody else. So why not take that same amount of money that you have to pay for housing anyway, and invest in yourself and your future, and go ahead and pay your own mortgage, and build equity for yourself?

MICHELLE: I love it. Um, just to kind of like maybe talk about some of the downsides to owning a home just in case that filters anybody out, um, can you talk about any considerations? Like maybe it’s not right for you to buy a home if— insert answer here. Do you see what I’m saying?

STACIA: OK. Oh, yes. So, yes, there are some people who probably should not buy a home. So, um, you do need to maintain your house. Um, so that means that right now if you are in an apartment, and the water heater stops working, you just call somebody. And they take care of it for you. When you’re the homeowner, you’re the person that has to take care of that. So if you want a completely maintenance-free lifestyle, um, that— homeownership’s not for you. 

[00:05:03] Also, if you have a single-family home that has a yard, you are gonna need to maintain that exterior. Um, so that means that at least quarterly you’re gonna need to do stuff like make sure the roof is cleared of leaves, clean the gutters, walk around the outside, make sure your siding is maintained. It might need some caulking or some paint. You’re gonna need to check your windows, make sure there’s no leaks, um, keep up with the yard. 

And stuff breaks, you know. You can have an inspection, and everything can be great when you move in the house. And six months later, a $5,000 thing can break. And you need to be prepared for that. Um, and there’s just no way to predict that some things are gonna break. 

And then there’s things we can predict that are gonna happen. There’s wear and tear on houses. Eventually, the roof is gonna need repair. Eventually, the air conditioner’s gonna go out. Eventually, the water heater’s gonna go out. Uh, they have a finite life span. 

So you do need to get some money in a savings account. Put $5,000 or $10,000 away. And just don’t touch it. And have that for an emergency fund for stuff that’s gonna happen at your house. Um, I have seen some homeowners that just never did any maintenance on their house. 

And when it comes time to sell, that’s really gonna affect how much money you can make on your property, uh, because you had that deferred maintenance. And it’s just way too much to try and catch up on the end. So it’s gonna really affect how much you can sell your house for in the end. 

The person who maybe should think about a condo is someone who doesn’t wanna do that outside maintenance. Um, because then you don’t have to worry about maintaining the roof or the siding or the yard or anything like that. Or, if you just don’t wanna be bothered with any— I don’t want the responsibility of any maintenance or maintaining a savings account for an emergency, you know, then maybe renting is the right thing.

MICHELLE: Yeah. So let’s say somebody’s listening, and they’ve kind of weighed the pros and cons. And they’re thinking about buying. And they’re thinking about renting. And then ultimately, they decide to buy. What is the very first thing you should do if that’s the route you go? If you decide you wanna buy, what’s the first thing you should do? 

STACIA: So the first thing that you should do is you should, um, like you said, assemble that dream team. So you need to find a really good realtor. Um, I know right now a lot of people want to start their search online. And I wanna caution people about starting the search online and just getting a random agent off of Zillow or Redfin or off of the internet. 

Sometimes those are not always the best choice. It might be someone who’s not very experienced, not very familiar with the area that you want to buy in. Um, so you’re gonna wanna ask your friends and family, who have you worked with? Who do you know that did a really good job for you or for somebody that you know? 

You want a really good personal recommendation. You wanna read reviews online. Um, and it doesn’t hurt to actually interview a couple of people. It’s a very intimate process. You’re gonna spend a lot of time with this person. It’s the biggest purchase that you’re gonna make in your life. Um, and you’re only gonna do it a couple times. 

So you want someone that’s very experienced, that really knows what they’re doing, and that does it a lot, does it full-time, and is full service. So you don’t want someone that does it part-time, nights and weekends. You need someone that does this as their full-time career, um, and that really knows the ins and outs of the business, someone that’s gonna really represent you fully. So I really caution to make sure that you do your due diligence upfront to make sure you get a really good realtor to represent you. 

It’s also not a good idea to say, oh, well, I’m just gonna wait till I find the house, and then I’ll get an agent. You need someone from the very beginning to help you through the entire process. Now, most people I talk to that are buying a house, we start the conversation at least six to nine months before they buy. Um, so first, you’re gonna get a real estate agent. 

Then, you’re gonna get your lender. So when you go to pick a mortgage broker, or a loan officer, you want someone that is local, that only does mortgages. You want someone that has a desk you can drive to and sit down at and have a conversation. I really would strongly discourage people from going with an online bank, um, or a big bank, like a— one of the big nationwide banks. 

With a local bank that only does mortgages, you’re gonna get better service. You’re gonna get a wider selection of products. And you’re gonna get someone who really knows the business well and understands that time is of the essence when it comes to your contract. They’re gonna know the appraisal process better, have a better pool of appraisers that know the area where your house is better. 

[00:10:03] This is all very crucial later on in the process. When you use somebody like Quicken Loans or Rocket Mortgage or somebody that’s online, um, their process is broken up and spread out all over the country. They don’t really respect the timeline in the contract, which can get you in trouble later with being outside of your contingency. 

They don’t understand that Atlanta’s very neighborhood specific. So they might pick an appraiser that lives way out in the suburbs that’s not gonna understand the value of individual streets inside neighborhoods in Atlanta. And that can cause an appraisal problem later. 

So you wanna get started early. As soon as you’re like, hey, I think I wanna buy a house, you wanna get your really good realtor that’s gonna represent you through the whole process. And you wanna get approved for a mortgage as soon as possible. 

Now, you wanna talk to that loan officer and see, well, where am I financially? And maybe you’re not 100% ready. But they can tell you exactly what to do to get ready. Save this much money. Work on this particular item on your credit report. 

Like, pay off this debt versus this debt, or something like that. You need to make your score come up this many points. And this is how we’re gonna do it. You know? Um, rather than just kind of stumbling through it on your own till the last minute, and then you’re out of time. So, um, definitely get paired up with a really good realtor and a really good loan officer is the very first step. 

MICHELLE: Yeah. I love it. And I— and I like that you— I mean, I feel like the online pull is really tempting. Like there are so many things that we do now in our lives where online is our very first resource. As much as we can kind of get done online without necessarily talking to people, we— I mean, I personally love that. 

This is not an area of your life where that decision makes a lot of sense. And so even though the Zillow app is cool, and you can browse Redfin for hours, it might give you a good sense of like the features you want. But when it comes to working with somebody, I love your point that going local is the right decision. 

I mean, that’s what we ended up doing. Um, so Stacia was our realtor. And then, um, we used a local mortgage person as well. And they did a great job. And so, uh, that was really helpful that we had like point people that we could meet in person and talk to when something happened and, you know, bounce ideas off of them. That was— that was invaluable to our process. Um, I do have a quick question about some of the mortgage lending stuff. 

STACIA: Mm-hmm. 

MICHELLE: And I’m gonna try and actually do an episode, um, with a mortgage person. But I— I just wanna kind of preview that here. Because you used a couple of phrases that people might not understand.

STACIA: OK.

MICHELLE: Is there a difference between like a mortgage lender and a mortgage broker?

STACIA: Um, but people kind of use them interchangeably, I guess. Is that a word?

MICHELLE: Yeah.

STACIA: A broker is somebody who can shop different banks across the country to fund your loan. And then a lender is usually a direct bank that just sells you their products. And sometimes, they’re one and the same. 

So you could go with, um, a bank that can lend their own products but also broker other products. And some, uh, loan officers will work for a bank that only sells their products. Right? Um, so sometimes it’s both. Sometimes it’s just one. Generally, we call them a loan officer. That’s the person that you actually work with that, um, is gonna write your loan, is gonna take your application and go through the process with you. Sometimes they are just the lender for— a direct lender for that bank that they work for. Sometimes they also are a broker, meaning they can get money from other banks around the country. 

MICHELLE: Do you generally have a preference between somebody who just sells one entity’s products versus somebody who can shop around for you?

STACIA: It depends on— everybody has a unique situation. So it’s gonna depend on that buyer and what their situation is. So, um— and that really is gonna be up to the loan officer. I kind of stay out of that part of the decision. 

It depends on like, what is their credit score? How much money do they have to put down? Is this their forever home, or is this a less-than-10-year home? You know, are they, um, going to be using a down payment assistance program? Do they need an FHA loan versus a conventional loan? Is it a jumbo product? Um, are they using a second mortgage, an adjustable rate? 

So all of those things is a conversation that goes into a larger financial picture for the person. And that’s why it’s important to have a very good, financially savvy loan officer that can get them into the right product. So I have some loan officers that, if it’s like a really pretty cookie-cutter, conventional buyer, we’re gonna go over here. 

[00:15:05] If it’s somebody that, oh, we’re gonna need to use a down payment assistance program, maybe scout some grant programs or something, we’re gonna use this person over here. If it’s somebody that’s self-employed, and we’re gonna need to use some loan products that are specifically for people that don’t have traditional W-2 income, we’re gonna use this person over here. So it really depends on the buyer’s unique situation.

MICHELLE: Yeah. OK. That’s awesome. So let’s say you— you’ve decided to buy. You’ve selected your squad. How do you decide what features you want in a home and kind of what neighborhood to zero in on? 

STACIA: That’s gonna depend on everybody’s kind of lifestyle. So some people, um, are very, I have to be in a certain school district. Um, you know, if you’ve got kids, I wanna be in a certain school district. For some people, uh, it’s, I work at this certain location. I’m always gonna work at this certain location. I want a very short commute. 

For some people, it’s more lifestyle. I wanna be out in the country. I don’t wanna see my neighbors. You know? Some people, I wanna live in a very walkable location. It doesn’t matter where I work. But I wanna be able to walk to bars and restaurants and stuff. 

So that’s first a lifestyle consideration for your location. I wanna be on the BeltLine. I wanna be super far from the BeltLine. I wanna be by a MARTA station. You know? So that’s how you kind of pick your location. 

Your features, um, when we sit down and do our buyer consultation, I’m gonna ask you hundreds of questions to narrow down what is the top five most important features for you in a house. So if you say, I want three bedrooms and two bathrooms, well, let’s narrow down. Do we really need three bedrooms? Are there three people that need bedrooms sleeping in the house every night? Or maybe do we need two bedrooms, and that third bedroom you’re using as an office or a studio? 

So it doesn’t really have to be a bedroom. It could be a nook somewhere. It could be a basement space. It could be a loft. You know? So I really need to know, how many units does it have? 

Do we want a separate dining room because you have dining room furniture, and you love to have dinner parties? Or, you never eat at a table, so we don’t really need a separate formal dining room? An eat-in breakfast nook is fine. Or, you want a— you know, a bar in the kitchen where you eat your cereal in the morning, and that’s it. 

So we’re gonna ask a ton of questions, go room by room and ask how you use your current living situation. And who’s gonna be in the house? How are you gonna use it? And then that’s gonna help us narrow down the features we’re looking for. 

MICHELLE: Yeah. That’s great. And I— and I feel like that’s an important part of why having the in-person realtor experience is so important, like somebody who kind of can sit down across from you at the table, and pick your brains, and really know the right questions to ask to narrow down your, um, preferences. But I will also say that’s something— if you are buying a home with like a partner or a spouse or family, um, that’s also something that I would recommend brainstorming before you talk with a realtor just so that you’re— you’re not starting to think about these things for the first time. 

Um, you might have somebody try and help you narrow down or specify which ones are most important or, you know, really prioritizing. Uh, but that way too, you can also kind of come to the table with at least a vague understanding of what you’re looking for— rather than, welp, we wanna be in Atlanta, and we’re looking for a house, which is— 

STACIA: Yes.

MICHELLE: Pretty vague criteria here in Atlanta. 

STACIA: Yeah. Most people have— by the time I sit down with them, most people already have a wish list, um, written up. And then what we do is we’re really just kind of like narrowing down. And we sometimes will stumble upon, oh, I didn’t think about, you know, narrowing down these sort of specifics. 

Or, we uncover— I always ask, OK, do we have a specific, weird, or special piece of furniture or equipment that we need to get in the house? You know? And it’s like, oh, I have an antique loom that needs to go that’s 12 feet long because I do fiber art. OK, well, that means we need a giant living room or a giant space to put this antique loom in. You know? 

Like if you just tell me you need a three bedroom, two bath house— yeah, I just did a buyer consult on Wednesday night. And they told me they needed a large dining room. And the reason why is their dining room table’s only a four-top. But it’s a huge piece of driftwood with a glass top. 

And it’s actually not the dining room that needs to be big. But we need big doorways to access it to get this really cool dining room table in. So we had to ask a lot of questions to get down to, you know, we’re gonna need really a wide doorway to the dining room to fit this cool table in. 

[00:20:06] MICHELLE: Yeah. Yeah, that’s great. That’s good to know. 

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MICHELLE: One of the other things that I hear a lot from— prospective first-time homebuyers will say, um— once you’re sort of like narrowing down what you want your space to look like or, you know, what features you want, I think the other big consideration for a lot of people is, how much house can I afford? Or, how much money do I have to save in order to make that purchase happen? So can you talk a little bit about, um, maybe some of the like money considerations behind buying a home? 

STACIA: Mmk. Um, so the— way back at the beginning, when we do the pre-approval process with the loan officer, they’re gonna go over with part of your whole financial picture is, how much money do you have, cash on hand do you have now? What does that look like for down payment? What does your monthly payment look like and everything? 

So then that’s gonna tell us how much house you can afford. So then when we get into the process of, we’re ready to write an offer, how much cash do I need on hand to write an offer? So you’ve got, um, your down payment. Now, most people are putting down around 5% these days. There are loan programs out there that are 0% down, 3% down. 

You’ve heard, probably, that 20% down is the standard. Most people put around 5% down. So you’ll need your down payment. You’ll need closing costs. Closing costs end up being around 3% of the purchase price. Um, and that’s all the costs associated with the loan, all costs associated with the closing attorney, processing the closing, and then setting up your escrow account, prepaying your homeowners’ insurance, property taxes, etc. 

And upfront, we’ll know that estimated cash to close number. Other out-of-pocket expenses that we’ll need upfront, that’s the cash to close. You need that by the time we close. But we have to know that we’ve got it up at the time we write the offer. So other expenses that we need is— at the time we write the offer, we need an earnest money deposit. 

That’s your skin in the game or your consideration that makes the contract a legal, binding contract. Um, it’s 1% of the purchase price. So if we are buying a $200,000 home, we need $2,000 cash. And that will be a check or a wire that one of the real estate brokers or the closing attorney will hold. 

Uh, it gets applied to your cash to close when we go to closing. Or, if we need to terminate the contract for some reason, you get your earnest money back. Another cost is gonna be the appraisal. You need to pay that upfront early in the process. That’s around $450. 

Now, some lenders will say no appraisal, but they charge a $500 application fee. Other lenders say no application fee, but you pay for the appraisal. And it’ll be anywhere from $400 to $500. So we just tell people 450 to be prepared for. 

You’re also gonna need to pay for the home inspection. Home inspections are around $500. I would caution you, again, please don’t go with the cheapest home inspector you can find. Because you really get what you pay for. And it’s important to get a good home inspection. 

You may wanna, uh, choose to add things onto your home inspection. You may want a radon test. Radon gas comes out of the ground. It’s in granite rock, which is pretty common in our soil here in Georgia in the Atlanta area. It’s the number two cause of lung cancer. 

Um, so you might want a radon test. It’s simple to remediate radon in your home by putting a fan in the basement that sucks it out outside the house. Um, so that adds like $200 to the inspection. You might want to have other people come in and do inspections. You might want an extra HVAC guy or electrician come in. 

You might want a contractor to do an estimate for you for some sort of, uh— if you wanna do another kind of renovation or extension on the house. Um, they might charge you something for that. You may choose to have the sewer lines scoped. That might cost, uh, $99 to have somebody come out and put a camera out to the sewer and make sure your pipes are OK. 

[00:24:58] So you might need up to $1,000 on hand for all the possible inspections that you might have. And that’s just about everything that you need to have cash on hand when you’re ready to write an offer. 

MICHELLE: So it sounds like, you— so you mentioned like 3% for closing costs and on average 5% down. So you’re looking about 8% of the total purchase price, um, for that plus an extra thousand dollars for inspections and all of that fun stuff.

STACIA: Mm-hmm.

MICHELLE: So really, if you’re looking to buy $100,000 worth of house, you can expect about $8,000 for down payment and closing costs plus the extra thousand. If you wanna buy $200,000 worth of house, you’re looking at about 16,000, you know, and so on and so forth. Does that sound about right? 

STACIA: Right. That’s about right. Now, sometimes sellers will help you with the closing costs. You can get a closing cost contribution from the seller. That depends on how aggressive the market is at the time. 

If— if it’s very competitive, sellers are not contributing to closing costs. Um, if things are a little bit more of a buyer’s market, a seller will. Sometimes, you can go up a little bit in the purchase price and ask the seller to contribute some of that back towards your closing cost. And that will help. 

Once you get to a certain point, though, the closing costs aren’t gonna go much over like $9,000 or $10,000. Um, so like if you get into a jumbo product or over 500,000 in purchase price, it— it doesn’t exponentially keep going up 3%, you know. It kind of stops at a certain point. 

MICHELLE: Yeah. OK. So for the, um— but for like maybe a first-time homebuyer who’s looking to get a starter home, I love that you mentioned 20% is this historical what people think they need to buy a home. 

STACIA: Right. 

MICHELLE: And then you crunch some of the numbers. And it’s like, my god, if we need to save 50 grand to buy a home, that’s not attainable. But in fact, if you’re really looking at something in the, you know, $100,000, $200,000, $300,000 range, all in your cash out-of-pocket might be something in the $10,000 to $20,000 range, much less than people expect. 

STACIA: Right. Right. I usually say anywhere from $6,000 to $10,000 per $100,000 of purchase price is what you need to expect. 

MICHELLE: Yeah. OK. Awesome. Um, that is— that is super helpful. So it’s more affordable than you think, uh, which again bearing out from personal experience— this is just one anecdote. But we— we found that it was much more affordable than we had thought. Um, and that— you know, because we had the seller cover some of our closing costs, I was pleasantly surprised by how little actual cash we handed over for that transaction. 

STACIA: Yeah.

MICHELLE: OK, so you’re looking for your home. You’ve got your features on lock. You’ve figured out how much to save. And the process is moving forward. As a realtor, how do you work with people to actually find the right home? 

STACIA: So first thing we’re gonna do is we use the multiple listing service. And I put in the criteria and set up a client portal website. And it emails you listing updates. I try to put in the smallest amount of criteria possible. Because not everybody checks the right boxes when they enter listings and stuff like that. 

So I might just put three or more bedrooms, two or more bath, um, and then put like less than 200,000 or less than 300,000 in price. And then either we’ll put a zip code or a school district or draw on the map or, you know, whatever criteria. And I don’t— unless we’ve got a hard-and-fast got to have a fence or got to have a basement, I generally don’t put too much criteria in there, which means we might have to sort through some more listings online. 

But, we don’t wanna miss anything. Right? So we start by going back and forth on the client portal. You can mark things— like, don’t like, interested. You can leave little notes back and forth. I go through the listings every day also and say, hey, I think this is a really good choice. Or, I’ll go through and check off five or six and say, I think we should consider these, uh, for these reasons, you know. 

And once we get a few that we think are good, we pick a day to go out and look.  I will route them all in a way that kind of makes sense to drive them in an efficient manner. And I’ll make appointments. Usually, houses are vacant. Sometimes, they still have people living in them. So we’ll have to make an appointment arranged for them to get the dog out and stuff like that. 

[00:30:05] Um, I like to keep the showing times like no more than two hours slash no more than five or six houses at a time. Because they start to all run together. And you get tired and can’t keep track of what you saw. So we’ll go out and look at the houses. 

I make you a little folder where I print out all the reports and give you a pencil so you can take notes. Um, so we go out looking. When we’re looking at the houses, what we wanna do is not only look at the space and make sure that we like the paint colors and the size of the living room or whatever, but we also wanna take note of, how do the gutters look? What does the roof look like? Does it look like the air conditioner is new, or is it super old? You know, kind of the condition of the house. 

If the house is priced like a brand-new home or a brand-new renovation with new stuff, but it’s really old and has really old stuff, then when we make the offer, we’re gonna address it at that time and say, hey, this has got some wear and tear. We need to take a little money off of the price. Or, if the house has got some wear and tear, but it’s priced lower than everything else in the neighborhood, then we know it’s priced appropriately for the condition. Right? And that just all comes from market research, knowing the market, and knowing how everything is kind of priced in that area, so again why it’s really important to get an experienced realtor who knows that area really well. 

MICHELLE: How many houses do people typically look at before making a decision, on average? 

STACIA: So on average, people go out three times. And they look at about 12 to 15 houses. Now sometimes, people go one time, look at two or three, and pick one. And they’re done. Sometimes, people go out for months and look at, you know, 50 houses. 

It really depends on, are they looking for something super, super specific? Or, sometimes, like in 2017, there was no inventory. It was very competitive out there. And I had some poor buyers that we were writing offers every— every weekend and losing out on multiple offer situations, losing out to cash buyers. Or, we were getting under contract and then having crazy, you know, inspection problems or stuff. 

So it just depends on what the market’s doing at the time and specifically what that person’s looking for. But typically, you look at about a dozen houses. And you go out two or three times before you find the one. 

MICHELLE: I like that you mentioned the real estate market being pretty tight in 2017. Because another common question that I get from people is like, what if the real estate market in your area is— I guess hot is the right word? Should people try and time the market and buy when prices are down? 

STACIA: It is impossible to time the market. If you have figured out how to time the market, then we need to get married or something. (LAUGHING) It’s impossible to time the real estate market. It’s impossible to time the stock market. 

There’s people who say that they think that they can predict. It’s impossible. No one has a crystal ball. Now, there are certain things that we can indicate. And we can make pretty educated predictions. Uh, but nobody knows when it’s gonna shift. 

Right now, we are kind of slowing down. Prices were skyrocketing there for a couple of years. Every sale was 5% to 8% more than the sale previous. Um, inventory was shrinking. And prices were skyrocketing for about two years in a row. 

And then things are leveling off. We have a little bit more inventory. And prices are stabilizing. So everybody is thinking, oh my god, a crash is coming. Well, no, not really. A crash isn’t coming. We’re just normalizing from a crazy rush up.

People are freaking out about rates being very high. They’re actually not very high. They haven’t gone over 5% again. Um, but historically, rates are still really very low. But nobody remembers that in the last five or six years. Everybody’s been used to 3% rates. 

So when you look at it over the long history, we still are in a very balanced market, still a seller’s market in a lot of price points. Um, things are just balancing out, which is something that we really need. I wish that we could time the market. I would be very, very rich if I could figure that out. But it’s very impossible to time the market. 

MICHELLE: Yeah. Thank you for saying that. I tell clients that a lot on the investment side. And I know it on the real estate side. But it’s always good to hear that reminder. If you’re really trying to game the market, that’s, uh— that’s not a great like basis on which to make your decision. 

[00:35:10] STACIA: Yes.

MICHELLE: So let’s say you find a house. How does the sale and closing process work? 

STACIA: So when you say, Stacia, this is the house that I want, what we’re gonna do is call the other agent. I call the other agent and say, are there any disclosures? If they’re not easily found online, do you have any disclosures? Do you have any offers on the table? Is there anything specific that the seller is looking for, anything that I need to know? 

And then I take that information, and I look online to make sure that I know exactly what’s going on in that neighborhood. Uh, what has everything sold for in the last couple of months? Are things selling at or above list price? Are sellers contributing to closing costs? Are things selling very fast? 

And that’s gonna help me tell you what kind of offer I think we need to make. So if things are selling at or above list price in a couple of days with no closing costs, well, we’re gonna offer something very similar to that. If things are taking a couple of weeks to sell, and they’re selling maybe a little under the list price, or everybody’s given $3,000 towards closing cost contribution, then that’s what we’re gonna ask for. 

We sit down. Now, we’ve already talked about what’s important to you and what your goals are. So we’ll go over one more time, uh, specific to this house, what’s important to you, how— when can we close? Who do we wanna close with? How long of a due diligence period do we need? 

Now, how much earnest money are you gonna write in the check? Do you actually have real checks? Nobody has checks anymore. Are you gonna send a wire? Are we gonna get certified funds from the bank? So we kind of cover all of those parts of the— that’s for the earnest money. We cover all those parts of the offer. 

Everything happens online these days. So I will type everything up in the electronic signature program that I use. And you sign everything electronically, um, send over any disclosures for you to review. 

I always want people to ask as many questions as they have. There’s no such thing as a stupid question. You’re not bugging me by asking questions. I want all the questions. And so once we’ve gotten the offer all together, we bundle it up. And I send it to the listing agent. 

The listing agent presents it to the seller. Now, sometimes they just accept it. Sometimes they need to send it back and counter on just one line or item. Sometimes they need to, um, go back and forth on the price or the closing costs, you know. So we might have a counteroffer. We might have a back and forth over a day or two. 

Once we go under contract, that’s the time that the earnest money gets deposited. The contract gets sent to the closing attorney. They start their title search. They also will send you a buyer information sheet where you fill out some contact information, stuff like that. 

The contract goes to the lender. The lender is going to put— finish the full application on the loan. They’ll disclose the loan to you. And then they’ll start doing a bunch of stuff with you there. Um, at the same time, I help you schedule the inspection, termites, termite inspection, anything that we need to do with the house. There will be a flurry of activity for about two weeks. 

And then we kind of hang out for two weeks while the underwriters and the attorney kind of do their stuff. Um, once we get closer to the closing, three days before closing, the lender will send what’s called a preliminary closing disclosure. That’s gonna outline everything with your loan, all the final costs. It compares to the original estimate they gave you at the beginning to make sure that it’s the same as what you were expecting. 

That gives us the cash to close number, the final number. It might change just a little bit between that three day and the final day of closing. If anything changes by— if we have to move by a day or something, all the interest has to be recalculated, prorations and stuff like that. Um, you will wire your money to the closing attorney. 

Wire fraud is something that’s a big problem these days. So at the very beginning of the process, the closing attorney has a secure upload, download site that we exchange all the documents through. We will have the wire information already through that secure upload, download site. Nobody emails you wire instructions. 

[00:40:02] So then the day of closing, we get a final CD where we review. And I show them everything looks right on that last [00:40:11 settlement?] statement. We go to closing. We bring a picture ID. And you sign your name about 100 times on the mortgage documents. And in Georgia, we fund and close at the table, meaning you walk away owning a house. 

MICHELLE: It’s very satisfying. It’s very satisfying to put your name on 100 pieces of paper, then walk away with a house. It makes you feel like a d**n good adult. 

STACIA: It’s very— it’s the most adulty thing that you can do. 

MICHELLE: It really is. Anything else people should know about buying their first home? Anything we didn’t cover? 

STACIA: I think that that really covers everything. You know, it— it’s a lot easier than I think a lot of people think it is. I think it’s very important to make sure that you pick a very good helping professional in the beginning. You get a good team that you trust and that you stick with your team. 

Um, and it seems like a lot. When I sit down with my buyer consultation, and I walk them step by step through the 20-some steps, they’re like, oh my gosh, that’s a lot. But we take it one little piece at a time. 

I’ve done it thousands of times. So I hold your hand. And I help you through all of it. So you just take it one— one little piece at a time, one step at a time. It’s very easy, very achievable, for everybody to own a home. 

MICHELLE: Awesome. So Stacia, thank you so much for dropping by to record this interview. How can people find you online and get in touch with you about your work? 

STACIA: Well, on Facebook, I’m Stacia Smith. And my business page is Zip Right Home on Facebook. Um, you can also find me on my website, staciasells.com. And I— I just moved over here to Harry Norman. You can also find me on harrynorman.com. 

MICHELLE: Awesome. And folks who are listening, just a friendly reminder that we always put all of the resources, all of the links to get in touch with the people we interview here in our show notes. So if you go to youngandscrappy.com/blog— that’s youngandscrappy.com/blog— you’ll always find our podcast episodes on there. There’ll be full transcripts for you to read and check up on as well as a list of all of the resources mentioned in the show notes. 

So I’ll be sure to link out to all the places you can find Stacia online in the event that you live in the metro Atlanta area, and you’re looking for a realtor. Um, Stacia, again, thank you so much for dropping by. Listeners, thank you so much for listening. 

Don’t forget to like us, subscribe, leave a review. We love to hear from you. And other than that, I hope everybody has a wonderful rest of your day. 

END CREDITS: I hope you enjoyed this episode of the Young Scrappy Money podcast. If you want to read about my work as a financial advisor and financial coach, you can do so at www.youngandscrappy.com. That’s www.youngandscrappy.com. Thanks again for listening. 

Made with love by Jesse in Atlanta. [SMOOCHING SOUND]

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