Before You Buy A House #065

on renovating a few weeks ago. Gosh, we are so freaking happy to be back in our kitchen, in our dining room now that we have this sort of connected space for our family to spend a lot of time in. And it's nice as well for you and I to be able to record and not have the instat pot over my shoulder here, plus all the spices behind you over there, that whole thing going on. It was easier to get the beers from the fridge because it was just an arms length a way when we recorded in

your old dining room slash kitchen. Because everything was mixed together in one. But but no, this is a nice new space, and yeah, it looks really nice, and it's nice to have kind of an upgraded recording studio here at your dining room table. That's definitely more comfortable and honestly, and just the utility that Kate and I that we have been able to get out of it as a family.

We're not even done yet. We still have a punch list of things that need to be completed before we, you know, write that final check like we talked about when it comes to renovating your house. But I realized how much stress was sort of on us by not being back here and sort of having our our usual space and feeling like we're kind of camping out. You know, we've been camping out for the past three or four months now while this has all been going on, and it's nice to be able to resume life and to

pick up what we left off. Yeah, Matt, and there's some really interesting income producing aspects of your innovation that we are going to talk about in a future episode. So we're gonna need some time and some numbers to come in on that. And uh yeah, so we'll get to that maybe a few months down the road. But first I've got a frugal versus cheap for you. I'll bring it, and that is school lunches. Your daughter and my daughter, they both go to the same elementary school.

School lunches are four dollars there, and that's for a nice lunch, right, like if they have an incredible lunch program. And it's like the nutrition and all the thought that goes into these meals, Like last time that my wife was there, like the kids were eating beat salad, which is amazing, Like I love beats. That's impressive. But the fact is four dollars is still a lot of money. And in our family were able to feed each one of us individually for one dollar per meal, so this

is four times that. And Kate and I we're having the discussion the other day and we were asking ourselves, are we withholding a sort of special experience from our daughter by not allowing her to buy school lunch? Are we depriving her of this sort of fun thing that the other kids get to do, Because it's something that recently she has been sort of mentioning, kind of on the side a little bit she did she hasn't like

demanded anything, but yeah, what are your thoughts on that? Well, So we actually let our daughter buy one day a week, so she buys either Monday's or Fridays, and we usually picked the meal that we think she's gonna enjoy the most based on those days. It's one fewer day that that we have to pack a lunch for, which just kind of makes it easier to get out the door in the morning. But for the most part, we're packing lunches because it's way cheaper. Yeah, well, that's that's where

we are with it. We feel like that it's frugal because otherwise we're spending four times flasts or twenty bucks four weeks a month. You're looking at eighty bucks just for lunches, just for one kid. And I don't know, part of that is we can't really get around and like we know our lunches are just as nutritious, But there's just I guess the fun aspect of it that we feel we're sort of depriving heavy of a little bit.

And I mean basically, she just wants to be able to like eat pancakes when they have pancake Day, or like French toast, right, you know, Yeah, that's definitely the one you should let her have. And so I didn't know you guys actually did that. I didn't know you you did one day a week thing. And I think we might start looking ahead to the lunch menu and maybe when there's a day in particular that sounds extra delicious, maybe we'll start allowing that. You know, it's cool, Matt.

You can actually ask if you have an Amazon Alexa device, you can ask it to read the cool lunch for our school. Someone told me that I heard that recently as well. You know what else you can ask Alexa to do? Play our podcast, can you really? Yeah, you can say Alexa, play How to Money and it'll it will happen. So, by the way, if anyone's listening to us right now and they have an Alexa in the room, Alexa probably just played our podcast because I said, alright, Matt,

so real quick, let's tell everybody. The beer we're drinking on the show today another beer from rhein Geist. Our friend Natalie, who works at Ryan Guys, sent us a couple of bottles, and so today on the show, we're drinking a barrel aged Imperial stout called Ink. And I was looking at the bottle. Man, I love how they got this little skull. They've got like a droplet I assume of little beer dripping down from a barrel. A little droplet has a little skull designed into it makes

it look hardcore. It's like a mixture of hardcore and Q. Yeah. Yeah, it's it's so small, it's pretty cute. Yeah. I just took a sip. This is good and I can't wait to delve into our full thoughts at the end of the show. But for now, let's get into the topic of hand. What to do before you buy a house? And Matt back in the episode thirty of the show, we discussed by buying a home is typically a terrible investment.

And so if you're thinking about buying a home, oh man, this is gonna be a great investment, and this is gonna be good for me financially over the long haul. Well that's likely not the case. And if you want to know more about that, go back and listen to episode thirty. But for so many of us, buying a home has large appeal for so many other reasons besides just being a quote unquote investment. Right, So, how do

you buy a home intelligently? In light of the fact that buying a home might not necessarily be the smartest financial decision, but it is a decision that many of us choose to make for so many other reasons. The other thing, too, is that it's just such a huge deal to buy a house, right, Like it's intimidating and it's a big deal, and it's because it costs a ton of money. This isn't a purchase that we make

frequently at all. You know, unless you're getting an fh J loan, you've gotta put down like twenty for down payment, and that is a huge amount of money. Last year, the median home prices in the US were over three thousand dollars, So we're talking at least sixty thou dollars that you've got to put down, not including as in costs or anything else associated with a move. And because this isn't a purchase that we make all the time,

we're just less familiar with the process. Like even if this was something that we did annually, like home buyers might feel a little bit more comfortable, But the fact is that's not the case. And so I'm glad that this is something that we're tackling. I think we've got a lot of homebuyers out there, especially a lot of first time homebuyers, and with us being the Spring, that's a hot time to buy a house for sure. Yeah, no doubt. So where do you even begin, right finding

an agent bruising Zillo. Nope, that's definitely not where you want to start. The first thing you need to do is take stock of your situation, your personal situation. Buying is only going to be a decent move if you plan on living in that home for seven years or longer. And if you can't make that kind of time commitment, it's almost always a bad financial move to buy a house. In that case, you're better off renting or you're gonna lose money typically when you sell, because of the transaction

costs involved in buying and selling real estate. Sorry, Joe, this reminds me of episode fifteen, So even further back, we talked about renting versus buying and if you are sort of on the fence of whether you should maybe continue renting or maybe this is time for you to buy. This is sort of back in the old days when Joel and I are recording, But go back and listen to that episode. We we we talked about a lot of important things that you want to consider when it comes

to renting versus buying a house. And so after the break, we're specifically going to talk about how you should be thinking about purchasing a home, like what is the mindset that you should have, And we're also going to spend a good amount of time talking about financing because that is a very important part of buying a house. Game changer. All right, Joe, let's go ahead and kick this thing off. Man.

You know, if it turns out that you are ready to go ahead and buy a house, we've got a solid order of approach that we think that everyone should follow. First of all, make sure that you're spending a lot of time thinking about where it is that you want to live. And especially if you're moving to a new place, this specific location that you're possibly moving to could make or break things for you. You know, it could mean maybe a longer commute for you, or it could mean

a short, simple bike ride. And you can even mean higher taxes versus lower taxes. You know, if you're in an area that is maybe more affluence and the home values are much higher, you're gonna see a bigger tax bill every single year. Yeah, man, I feel like people often don't spend enough time on the front end thinking

about the specific location they want to live in. They maybe draw too big of an outline around where they're willing to live and they cast in it too wide, and because of that, they're not focused enough on a specific neighborhood or location. They don't figure out the specific

place where they do want to live. And especially if you're moving to a new place and you're planning on buying right away, if you haven't done your research, you might end up buying a place where the location just doesn't work well for you, your family, your commute right. And renting, well, that's not that big of a deal. You live there for a year, you move on to the next place. If you just move on, yeah, But

if you buy something, man, that's a huge pain. The transaction costs are huge that and that's why we mentioned before the break living in a place for seven years potentially that sounds like a long time, and it is a long time. But the transaction costs are killer in real estate. It can make or break the home purchase.

Even if your home appreciates over time, you could still end up having to bring money to the closing table if you're only in there for three or four or even five years, which is kind of I guess been what financial experts traditionally say how long you should be in a house. So considering that location, spending more time on the front end, making sure that that location is exactly where you want to be. It's worth that due diligence because it could save you a lot of money

in the long run. And the next thing you want to make sure that you're considering is the size of the house and the different amenities that you're wanting. You know, there's a balance between having enough house now and then looking ahead to your likely needs in the future, like three hot tubs. I need three hot tubs in the future need them all. As we recently covered, renovating is really expensive, So you want to have enough house now. However, you also don't want to pay tons of money just

to have some extre amenities that you rarely use. Right If you consider often you use that guest bedroom, where that guest bath. After doing the math, that could be the equivalent of paying five hundred to a thousand dollars a night if you're only using those amenities just a

few times a year. Yeah, so it might be better for you to be a little more generous and put up your friend or your family in uh nearby hotel as opposed to putting them up in your own house, having a smaller house, which means right lower monthly out of pocket expenses. It all just really depends on your situation and what you prioritize. And also now is the

time to start thinking about your credit. You know, if you kind of have had some things in your credit, now is when you're gonna want to start having that cleaned up and making sure that you qualify for the best rates, because having a credit score a hundred points lower than what it actually could be could and up constion you tons of money down the road, and I'm talking thousands and thousands of dollars if you don't have

to qualify for the best product. Yeah, Matt. On episode ten, we talked about how to improve your credit score, gave you kind of some tips and tricks. One thing you're gonna want to stay away from is anyone who says pay me money and I'll help you clean up your credit score. That is a no no, because those people often are gonna take your money and not help you

very much. But it's definitely of utmost importance to make sure that your credit score is in tip top shape because the ultimate terms that you're gonna get from a lender, well, your credit score is going to be a huge factor

in how good those terms are. And so thinking about your credit score now and how much you can boost it by doing some of the things we've talked about in that episode, that is going to make a huge difference in the rate that you end up getting and ultimately what you're out of pocket is every month on

that new home purchase. That's right. Once you've done all those things, now is the time to start looking around and seeing if the different things that you value in a home, if those things fit within your budget, and if they're realistic. These days, almost all home searches begin on the internet, right, whether it be through Zillo, which is my favorite, or Redfin. I like red Finn, do you really, Yeah, that's my favorite. But even just with Google stree view, you can see so much of a

house in this rounding area. You know, with satellite view you can see what green spaces and parks there are close by by, kind of zooming out a little bit. There's a lot you can do remotely before even leaving your house. The only downside, though, is that if you get your heart set on a certain size home or part of town that you can't actually afford in right, Like, so you started looking and you realize that, like, oh wow, in reality, I can't afford where I want to actually live,

you might be tempted to increase your budget. And so if you know that that's sort of how you operate, and if that's you, we would recommend to start with your budget and then limits your options based on what you can afford. And we're gonna get to that in just one second. But I did want to say that everybody, no matter what your price point is, everybody has kind

of a dream home. Everybody has a thought of the place that they want to live, and the reality of the budget never matches up to exactly what we want. Right those three hot tubs I mentioned, Matt, I didn't get them. I don't even have one hot tub, and it's a huge bummer. I'm not gonna lie at one of these days hot tub. It's in the car day.

But everybody has to make trade offs, and so just make sure before you start looking super hard and getting your heart set on things that are budget breakers, that you've kind of dialed in a dose of realism of

what you can actually afford. And one of the ways that you can do that is by actually touring some homes before you're actually in the market to buy, to do some walkthroughs and see, Okay, if I really want this kind of house, I might have to move to a neighborhood that isn't exactly where I wanted to be, or man, if the neighborhood location is the most important factor for me, you know what, I might have to

live in a smaller house. And those are the kind of trade offs that in all likelihood you are going to have to make. None of us get that exact perfect dream home that we want, And so touring homes that are on the market during this phase can be just kind of really helpful to setting some realistic expectations before you're even in the market. Rajeel, And again, the goal here is to initially figure out what your ballpark

figures are of what you can afford. Like you said, maybe after seeing the costs, you might realize that you can't actually afford in that area that you want, or maybe after realizing that you actually need down, you realize you need to say for another year, Like, that's a lot of money, and that that's sort of like the information gathering stage of house purchasing, thinking a lot about it, seeing what's out there, getting a field for the different

neighborhoods you want to do, all of this before you actually start taking what we'd call real steps towards purchasing a home. Okay, real steps though, getting financing right. That's a huge important step, and I gotta be honest, it's the step that people usually skip. They usually call on one lender, maybe two, but often the due diligence and the research uh that people give to getting financing is way less than they need to and it ends up costing them a lot of money. So let's go over that.

A general rule that you should think about when getting financing for a home is that you should strongly consider not taking out a loan that is more than three times your income. And you know what a lender might say, No, it's totally okay. You qualify for a loan that is five times your income or sick times your income, Like, no, you bother you got this, you can make it happen.

It's okay. You know what, don't listen to them. Listening to your lender as opposed to reason in this case is a recipe for being house poor, for buying something that you truly can't afford, and if something unexpected happens, you might not be able to afford that mortgage payment. So sticking to that rule of three times your income as the maximum purchase price for a house makes sense in our opinion. And another rule of thumb that we've practiced is that your mortgage payment should not be more

than of your take home pay. I think that might be a somewhat more lenient view towards towards your home, and I think that's okay as well, right, Like, it's okay to have these different rules of thumb. Ask you how much your your housing costs are, because it kind of comes down to what you value and what you want to prioritize. I know, for Kate, and this is literally a discussion that we've had before. We've said, do we want to spend more than maybe we should on

our housing? And we've identified the fact that with a bunch of young kids like we spend a lot of time at home. We value our time at home, Like both Kate and I are both homebodies, and so that's something that we've intentionally pursued and we know that we're more comfortable spending maybe a little bit more on our house And that's okay as long as you have proactively identify that as something that you do want to pursue.

And so whatever your guidelines, you just want to make sure that you're not spending too much on housing then you can afford. And for you, in particular, Matt, housing is also actually you know where you do your work and so you home office as well. Yeah, so it's got a dual purpose. I will say though, there was a stat I saw recently almost fifteen percent of Americans spend over fifty percent of their income on housing. Jeez, that's a lot. Yeah, that's an awful place to be.

And so yeah, we just don't want you to be in a place of weakness when it comes to buying a home. And if you're in a situation obviously a mortgage lender typically isn't going to allow you to get into that kind of space. But you know what, if you follow what a lender tells you can afford. There's a good chance that you're going to get into a position where you can't afford your mortgage with a comfortable level of say means and investing at the same time.

And that's not the place that we want you to be. We want you to be in a place of strength in housing. And if that means you need to look at buying in a different neighborhood or look at buying a smaller home, we think that's a trade off you need to be willing to consider, because being house port

is no fun. Oh, Joel. Also, financing, like, we didn't really define it, and I think most people know what financing is, but that's just sort of a fancy term for how you're going to pay for your house unless you have cash to buy your home. And if you do have cash to purchase your home, you probably know what financing is and you reach spollars. But but yeah, basically, pretty much everyone is going to be financing their home and that just means getting alone for the purchase of

that home. And when it comes to getting that financing or getting that loan for your house, well, credit unions are a great place to start. So if you're not a member of a local credit union, we would encourage you to go join one and make sure you're shopping rates with the credit union that you're a member of. Also consider contacting a mortgage broker in your area. They often have access to a whole slew of lenders and so they can help you find some of the best

rates available on the market. Ultimately, you're gonna want to make sure you go with a lender that has experience and that can close quickly. Lenders that have a solid reputation that have been doing it for years. You can just feel a lot more comfortable with that and closing quickly. Well, that's just going to allow you to take advantage of

some of the best housing deals that you find. And we mentioned financing and when making sure you have that lined up before you even seriously start looking at houses, And that's a big reason why I Joel like you want to have financing in place. That way, when it does come time to look at houses, you can pounce. You can move quickly because in hot real estate markets where sellers just have tons of buyers coming to them, they're gonna typically go with whoever can come to them.

The quickest with the best offer, and so you may not be able to show up with the best offer, but you can definitely get your foot in the door. You can have a leg up if you can turn it around quickly and you've got your ducks all in a row and real quick as well. Joel, you mentioned credit unions. This might be helpful for our listeners. But so credit unions are essentially the same as banks, right like they they all offer savings and checking accounts and

offer loans whatnot. But credit unions are nonprofit and typically offer better rates. And then you've got mortgage lenders, and they typically will be faster and more streamline since they're only in the business of making loans. Often times they end up selling your mortgage to a bank, typically to one of the big ones, and you know the big bank will be the ones that end up servicing your loan.

And then, Joel, you know you already mentioned brokers, but they kind of shop around for you and they might be a great fit for you, in particular if you're self employed or if you have a unique buying situation. They're aware of the different products that are out there and might be able to sort of custom fit something more to to you and your needs, and and they get paid either directly by the lender or a lot of times, uh, their fees are baked directly into your rate.

I know, for like Kate and I specifically, we maybe should have considered a broker early on, like when we got our first house, because we had only been in business for one year and because of that, we got stuck with a terrible adjustable rate mortgage that we had to refinance just a few years later, and that costs a lot of money. Yeah, So if you don't have a credit union and you're in the market for a house, will go to n c U. A will put a

link to that in the show notes. That's gonna be the website where you can find a local credit union in your area. And so be sure to shop shop Shop. You're gonna want to get three to five quotes minimum. So many people Matt, like I mentioned quickly earlier, skip this step, and you know what, it ends up costing them thousands, if not potentially tens of thousands of dollars

over the long run. And it's not usually the closing costs that are the biggest difference, although that can be you know, a few thousand dollars even in difference between different lenders. Often it's gonna be that slight difference in interest rate combined with those closing costs that can cost you tens of thousands of dollars depending on the price

of your home. So you're gonna want to make sure you get a couple quotes from credit unions, a mortgage broker, involved, a local lender, and online lender, Like, you're gonna want to kind of run the gamut. You're gonna want to get a lot of quotes so that you can bring them to the table, look at the apples to poles comparisons and go with the lender that has the best overall package for you. Yeah, and the actual document man that you're gonna want to use to compare those apples

to apples is the loan estimate documents. It's gonna have your points on there, your interest rate, your closing costs, just everything that you're gonna want to take into account when it comes to shopping the different lenders. And Matt just mentioned getting an adjustable rate mortgage when he bought his first house, we would highly advise against getting an adjustable rate mortgage. Had they suck. Yeah, that can lead

to a lot of problems down the road. And so the thirty year fixed is kind of the standard in lending. That's kind of what most lenders are going to steer you towards, and it's also one of the best products on the market. But you should challenge yourself to consider a fifteen year or a twenty year mortgage if your lender offers it, and almost every lender offers at least a fifteen year. If you can barely afford the thirty year payment, though, you should really question whether or not

you can afford the home. It's worth looking at the fifteen and twenty year mortgage options to see if one of the can fit in your life. If they can, you're gonna get a lower interest rate, and you're going to obviously be paying on your loan for a lot less years. The trade off is that you'll be paying more every month towards the price of your house. But if you can't make a fifteen or twenty year mortgage work for you, a thirty year mortgage is a great

way to go. Just make sure that you can easily afford that thirty year mortgage payment in your monthly budget. Yea man. The reason for that is because you just want to have margin in your life. When you own a home, there are a lot of things that can go wrong. There's a roof, there's electrical there's furnaces, there's just all sorts of systems and plus a lot of times you just want to spend money on your house.

Typically homes are maybe a little bit larger than the space that you've been renting, and so there are just other expenses that you want to make sure that you're easily able to pay. And if the monthly mortgage payment is equivalent to what you're paying in rent depending on your income, that's potentially a red alert because when you were renting, you weren't having to pay for any sort of upkeep, and on our new home, guess what upkeep

is your responsibility. So unless you could easily afford them out that you were paying in rent, you're gonna want to find a house that provides you with a monthly mortgage payment that actually comes in at less than what you're paying in rent. And as far as upkeep and maintenance, jool like most experts say to expect to pay one percent of the cost of your home. And so you know, earlier I mentioned that the median price of homes in the in the United States last year was over three

hundred thousand. That means you're looking at spending three thousand dollars additional every year just to maintain your home. And while we're on the topic of percentages, make sure that you have enough for down payment. You know, if you don't have at least five percent down you probably shouldn't be shopping around for a home is best you're gonna be able to get the best rates. There are some products out there that allow you to put down less.

You're looking at three and a half percent for an f h A loan, for a v A loan, even zero percent. The fact is those don't put you in a strong position. Doesn't put you in a strong position when it comes to the equity that you have in the home, but also when it comes to trying to purchase that home and make offers, those products just don't look quite as strong. And we'll get more into that

next week. Actually, yeah, Matt, and I think if you're bringing less down payment to the table, you need to actually be willing to stay in the home even longer. Forget seven years, how about ten right or the rest of your life? Right? No, but seriously, because if you're putting down on a home and you stay there for five years, the chances of you selling your home and going to the closing table and having to write a

check are are highly unlikely. But if you buy a house with zero percent down with the v A loan or three and a half percent down with an f h A loan, and you're only there for four or five years, the chances of you having to write a check at the closing table, well they're pretty high, and you might not have the money to cover it. And so if you are going to come to the table with less money down, which I don't think it's the end of the world. Necessarily, it helps get a lot

of people in a home that they really want. Just consider how long are you going to be in the home, and you might need to just extend that timeline in order to make it work. Yeah, So we're gonna talk specifically about the different fee ease and costs associated with purchasing a house next week. But right after the break, we're gonna cover your new best friend who's gonna save you tons of money your realtor. M all right, Matt,

let's talk realtors. It turns out most people find a realtor from their cousins, best friend or Facebook or something like that, right, And that's just not the best way to find a realtor in your area. And I said in your area, because it's really important to find someone who specializes in the neighborhood or town where you live. An agent with experience and connections is priceless. They know the ropes, they know the system, they know the people.

And so one way to find that right agent is looking at for sale signs of homes that are for sale in your target area. If you see the same agent on lots of them, that's a great agent to consider asking to represent you in the home buying process. The same thing applies when you're looking at listings online. If you see that same name popping up over and over at homes that you're interested in, they're probably a

great choice to be your representative agent as a buyer. Yeah, you know, man, When you have a great realtor who is focused and specialized in a specific area, there's a good chance they'll know of deals even before they even hit MLS and before they go public, there is a chance that you can get a really great deal. Yeah. Those are called pocket listings. And by the way, you just mentioned MLS, that's the Multiple Listing Service and that's where pretty much everybody who wants to sell a house

list their home. If you're for sale by owner, it's harder to get your home on the MLS. But the MLS that's like the holy Grail. You have to have your home on there in order to get maximum exposure to all the buyers that you want to potentially reach. It's like Apple Podcasts for podcasts. Right. If your podcast

ain't there, ain't nobody listening, right. But also keep in mind too that the Internet is honestly changing what it looks like to go and look at homes with your realtor, like it used to be back in the day that your realtor would send you maybe six or seven, you know, homes that they've handpicked, and you get to go and you tour them and you decide is this one gonna be nice? Maybe it will, maybe it won't. But it was kind of time consuming, kind of old school. Did

you do that with your first house? Oh? Yeah, okay, there was a lot of Saturday driving around with my realtor, which is fascinating because now I feel like so much of the process is shouldered by the buyer. Yeah, which is good though, I think because it's completely Yeah, it's more efficient, and because there are tools out there now that allow the buyers to have more autonomy to search and to make their own filters and to create their

own criteria to find the home themselves. And what that means though, is that you plan to meet at the house with your realtor, but you don't have to drive around in their car while, you know, making awkward conversations. Yeah.

And so you mentioned that sometimes realtors who specialized in the neighborhood might have access to what are called pocket listings, and that means that they hear about something that's going to come up for sale or something that's just kind of on the d L there on the inside, and they know what's coming up. And so it's good to have an agent who is connected, who's well connected, and who has access to pocket listings like that. So, for example, Matt,

I've got a real estate agent. She's the best. Typically I'm searching on my own on the MLS for properties that interests me. But if a pocket listing comes up that she hears about that fits my parameters, she knows what I'm looking for, she will send it to me and she'll say, hey, I know that you're in the market for this kind of property. Does this interest you.

This is coming up on the market in a couple of weeks, and I know about it ahead of time, so we can get in ahead of other potential buyers by being quick and jumping on it now. And so that's one of the benefits that having an experienced agent can offer you. In addition, I feel like an experienced agent helps you with the negotiation process. And I know that potential homebuyers might be a little more apprehensive to a realtor taking kind of a bite out of the

pie taking a percentage fee. And we'll talk about this more next week. But having a great agent is similar to having a great lawyer in a court of law. They're going to help you in the negotiation process. And in all honesty, I've had great agents that have saved me more than the fee that they're taking. So don't cheap out on an agent. Find a good one. And we've already mentioned Zillo, right that's my favorite, Joel, you

mentioned Redfinn, how that's your favorite. They are amazing tools, and they allow homebuyers to do a ton of research on their own. It allows them to really get to know a neighborhood and familiarize themselves with what an area has to offer. However, don't neglect to actually go visit and go drive around the streets in person. There's so much that you can gather from just being there as

a human being. Yeah, and you're gonna want to drive those streets not only during the day, but at night too, because some neighborhoods, I don't know where you live, but but where we live, neighborhoods can change from day to evening, and so driving by at different times of day can help you get a better feel for the neighborhood. And not only different times during the day as well, man, but just on the weekends too. So by checking it out on the weekend as well, just drive by and

see what's going on over there. That's an awesome way to get a feel for the community. And you can also do something that I like to call the wave test, which is when you're driving around in an area that you're scoping out, you know, have your window down hopefully it's not too bitterly cold. And then when you see someone kind of walking on the street or hanging out

on the front porch, just wave at them. What you get to do is you get to see how friendly they are and if they just kind of stare at you and glare well, I don't know, maybe this isn't the best street, or or maybe they're just having a bad day. I don't know. Is there like a percentage of waivers that you're looking for in a neighborhood to determine whether it's worth buying a house in or not. Like in general, I am looking for folks that are

just happy to see me. Right, Like if everyone that you wave two just stares at you and they're wondering why it is that you're waving at them, It's like, I don't know, I want to live somewhere that's friendlier. I want to live on a friendly street, And for me personally, that's something I value. I like it. The wave test. Yeah, another important thing to do, Matt. Not only perusing Zillo and redfin right, more weeks and months you spend on those sites, perusing homes and neighborhoods. It's

it's gonna help you. But it's also important for people to take a look at a lot of homes in person, especially for first time homebuyers. This is the largest purchase you're gonna make potentially in your life. So do the research, and not only the online research, but the more homes that you see in person, you're gonna start to see the corks the different homes present. If you look at three homes before you make an offer, you're just in a much inferior position to someone who's looked at fifty

homes before they make an offer. You just have a whole lot more idea of what you're getting into if

you've looked at a much larger percentage of homes. Yeah, Joe, I love that you said first time home buyers as well, because I know for Kate and I as first time home buyers, it took us a while to figure out what it was exactly that we were looking for, Like it took us looking at ten houses before we realized that, like, oh, we're looking for a bungalow, We're looking for a front porch, Like that's the kind of home, that's the kind of vibe that we're looking for, and because we have never

owned a home, we didn't quite know how to verbalize that to our realtor. And she didn't know because she's just like, well, this is how much she said you could spend, and this is these are the areas that I know you can afford it. I fitted in your parameters. I don't understand. But what we didn't realize was that, oh, we're looking for a front porch, and typically bungalows have a front porch, and typically you can find in these

nineties bungalows in these types of neighborhoods. For first time home buyers, it's I think it's really important to look

at as many homes as possible. And also when you're looking at these different homes, make sure you're taking lots of pictures, especially of sort of like the weird things, right, the different quirks, the things that aren't in the pictures of the listings, because the listing photos they look really good because they're taken by a professional real estate photographer and they're made to make that house look as large

as possible, uh, while excluding all the different oddities. And so by taking pictures and even jotting down a few notes will help you to remember these different homes, and that might also help you to remember the different feelings that you had when you went into these homes, because you know, if you're looking at maybe three or four, maybe five homes in a row, a lot of times

they can kind of blur together. And sure you can go back and look at the pictures, but having some additional photos on your phone is an awesome way to sort of document the weirdness of that particular house. Yeah, Matt, speaking of quirky things, I think, especially a lot of first time HomeBuyer, but homebuyers in general, they kind of want that fully put together home, right, and the fully

put together home can have a couple of issues with it. One, it can be prohibitively expensive to have the home that has like granite countertops and everything is completely finished properly. And the other thing is maybe it can look slick on the outside, but beneath nothing's really been replaced. There's old electrical, there's old plumbing, and so it can look good to the naked eye, but down deep, that house

has a lot of potential issues with it. And so, yeah, do you have thoughts on what people should be looking for when they're buying a house, when it comes to finishes and curb appeal. Yeah, well, I mean in regards to like the specific systems, right Like, we're gonna talk a lot about that. Next week. We're gonna talk about inspections. We're gonna talk about the specific steps that you want to say when it comes to actually purchasing a home,

the things that you can't see. But I want to encourage folks to not be afraid to look at ugly houses. Like you said, a lot of times we're sort of turned off by just weird things, Like you walk into a house and you think, oh, it doesn't smell like yeah, one it to smell, or like there's weird art on the walls. But those are all things that you can change.

Paint color, even a chandelier in the dining room, like, these are things that are easily modified that you can quickly change to make that home feel more like your own home. And so I mean, I just want to encourage folks to not be afraid to purchase a home that might feel a little ugly, but it's got the amenities, it's got the room count, and it's got the number of bathrooms that you're looking for, or it's in the

right area that you're looking at. You want to make sure that the crucial, like the most important things are taken care of. Don't be turned off by, Oh, they've got weird pendance over their bar I would never put those in my house. Well, it doesn't matter, you can

swap those out. I see. First time homebuyers would have fall into this line of thinking, right, and it keeps them from purchasing a home that they could really get a deal on and then spend a couple hundred bucks on after the fact and truly make their own and just maybe a couple of weekends worth of work. Yeah, if you're looking at wood paneling or old cabinets with old hardware, those are the kind of things that you

can quickly change for almost no money. But those are the kind of things that so many homebuyers ride a house off because of even though it is a solid home in the place where they want to live, they say, Matt, Nope, it's antiquated, it doesn't fit my style needs. I think it's really good advice, Matt. That's something you want to avoid judging house purely based on because there are so

many other intangibles. Maybe dealing with those things and being able to fix those little things up over time can help you get into the size house that you want in a neighborhood that you like, and then make that house your own over time. Plus you mentioned wood paneling. It all comes around. Dog. I feel like wood paneling is hot. That's true. That's true. Man. When we bought our house, it has the original wood molding from the nineteen twenties. Yeah, the trim around your door. But yeah,

that like the crown molding and all that. Yeah. Yeah, so there it's all unpainted, original wood molding, original stain. It's amazing. It's hard to find, right. And I remember walking you with my wife and she said, well, maybe if we painted this white would be a little bit better. And I was like, no, no, no, we can't do that. We can't do that. This is original. I mean, this is a hundred years worth of age on this beautiful trim. No one's painted it yet. We can't be the ones

to do that. We're not going to touch that patina. Yeah, until we grew into it and we love it. I mean I loved it from the get go, but we've really grown into it. And that's just the kind of thing that once you've lived in the house for a matter of months, that stuff just doesn't bother you like it did when you walked in there the first time.

Your eyes are tuned to every single detail as a first time HomeBuyer, especially walking through a home, and you know what, you can change little things over time, and also some of those things that bothered you maybe upon first walk through start that big of a deal as you grow into the home. Let's go ahead now and take us back to the beer. We've got Ryan Geist Brewery and today we're drinking ink, which sounds weird to say, but this is an Imperial stout aged and bourbon barrels.

This beer, to me, Matt, felt like a quintessential stout. None of the flavors necessarily stuck out in a major way. Nothing was off putting. It was just amazingly nice, pleasant bourbon barrel aged out. If anything stuck out in my mind just a little bit, there is a little bit of kind of light fruitiness, almost like Belgian quad or something like that. Oh yeah, dude, kind of mixed in like get you if you're fine tasting notes. You know,

I'm thinking about becoming a SMaL Ya. Maybe in my next life, we'll see, but yeah, this was super delicious. I thoroughly enjoyed it. Nice man, I am with you. This was an incredibly well balanced beer. You know, when you think of like the classic or the quintessential college experience, and you think of, you know, the perfect college town and you've got the sports, and you've got the academics, and it kind of has it all. And that's when I feel about this beer. When it comes to a

bourbon barrel Aged Doubt, it's sort of quintessential. It's got everything you want. It's got the barrel, it's got the dark flavors, it's got a cool name, inc It's got everything you think of when you want to have a dark, boozy, bourbon barrel Aged Doubt. And I'm incredibly thankful that our friends over at Ryan Guy sent this our way. We're looking forward to, hopefully someday visiting that sweet tasting room that we mentioned last episode. Just this amazing industrial space.

And that's one of the things I love about breweries is how they're sort of reclaiming these old, massive spaces that have been neglected and turning them back into spaces that people can enjoy and serve amazing craft beer in all Right, Matt, onto our final thoughts. What to do

before you buy a house? Well, just remember house does cost a lot of money, and any time that you can spend researching and familiarizing yourself on the front end will prevent you from making an ill advised decision buying a bigger house than you need, buying a house that you're unwilling to stay in for seven years or longer. Don't be afraid to spend more time before you buy in order to ensure that you're making the right decision. Also,

now is the time to clean up your credit. You want to make sure you have things in order before it comes time to applying for your mortgage. It takes time to straighten now your credit, so make sure you go ahead and get started on that well before you

start shopping and putting offers on houses. Yeah, a good credit score can make a huge difference in the rate that you end up getting offered, which has a specific correlation to the out of pocket costs of your mortgage every month, And in regards to that getting financing, be sure to shop, shop shop. You want to make sure you get three to five quotes minimum. Most people skip this step. They go with one lender and it ends

up costing them thousands of dollars. Getting multiple loan estimates that you can compare against each other will save you lots of money. And also, don't underestimate the importance of a great neighborhood agent who's familiar with your area. And while you're looking at different houses, keep in mind you want to look at a ton of houses, especially if you're a first time HomeBuyer, and don't forget the wave test and to see how maybe receptive the community might

be to you. And also don't be distracted by weird furnishings. You know, a house with less curb appeal could be an incredible deal for you. Alright, Matt, this episode has been about before you buy a house. Next week we're gonna get into I'm ready to buy a house? What do I do? All right? And so we're gonna get into all those specifics a week from today. So make sure you check out next week's episode for more details on what's next in the process. And so everyone, thank

you all for listening. We really appreciate it's we'll have our show notes up for you on our website how some money dot com. And also if you have some feedback for us. If if you feel like that we have left some things out or that we have some room for improving, go to how to money dot com, forward slash do Better and there you'll be able to send us a note and we would love to hear your feedback. We're always trying to improve and make sure that we're doing things well, so we'd appreciate it if

you shot us a message. Yeah, and if you like the show and you found it helpful, we'd appreciate it if you would consider leaving a review on Apple Podcasts. And also if you dig it, hit the subscribe button while you're there. Joel, Until next time, Best Friends Out, Best Friends Out,