Being Michael Holloway
Continuing with my last blog theme, “What would I tell my 30-year-old self today if I wanted to buy a home?” (I’ve owned 17 homes and been involved in the rehab of over 75).
I’d do what I did prior to starting Homebuyer Associates: I’d ask myself what really matters and then reevaluate my priorities and options. What was important then was a job where I could help people and that I’d enjoy doing every day. Homebuyer Associates filled that need.
My 30-year-old self would need and want a home, one I could put my mark on and make money long-term and plan for retirement.
There was an uncertainty to the future then, as there is now, as there always will be. Life (and real estate) has risk; you just want to mitigate (not eliminate) risk while living life. Mitigate and educate. (It’s part of what we now do at Homebuyer Associates.)
Home ownership is one element of having a good retirement. It’s a forced savings account. You don’t need me to cite studies of how few people actually save for retirement, maybe you are living that study.
“Being Michael Holloway”, with apologies to Charlie Kaufman (Being John Malkovich), let me step into my 30-year-old head and outline how I’d approach buying a home today.
1. Interest rates are at an historical low, so I’ll put as little down as possible, 5-10%. This will leave me at a disadvantage in negotiation, but not so much that I can’t work with it. I won’t want to spend more than 35% of my income for housing with a preference for 30-33%.
2. To mitigate risk (not eliminate) I’ll work with an agent who works for me, not a traditional agent who sells homes or an agent who is a buyer agent sometimes and selling agent other times or worse part of a “team” that does both. One team member negotiating against the other, huh?
My agent will wear one hat – the working-for-the buyer hat. That means Homebuyer Associates, the only Exclusive Buyer Agent in the 4 county-area. I’ll be suspicious of that so I’ll want to have a conversation with Homebuyer Associates about what they do and why they do it and why they are the only Exclusive Buyer Agent firm.
3. For the right home, I might pay more than value in acknowledgement of today’s competitive real estate times …but only if I plan on staying in the home 5 or more years and understand the risk of paying more than value – and if more, how much more?
I’ll need to know the value of a home based on data. Then have a sense of how long I’ll live in the home tied to the historical appreciation of homes. I’ll want to know, roughly, the cost of any planned improvements.
With information, I’ll know how much more than value I’ll spend before it becomes “stupid money.” Stupid money is too big a risk. An informed choice lowers risk. I may spend more than value but I won’t spend stupid money.
4. I’ll know that I have to see homes sooner than later but I’ll discover that being the first one in the home confers no advantage. How the offer is structured, including, but not limited to price, will dictate who gets the home.
5. Since many millenials want mom and dads home today I’ll not discount homes that need cosmetic work like carpet or paint, I may actively seek such homes. I’ll include homes that don’t meet all my wants as long as I understand the cost of upgrading the home over time.
6. Finally, I’ll remind myself often that the real estate industry likes panic. It works to their and the seller’s advantage. Most importantly I’ll have my mantra at the ready:
“Emotion is energy without structure, without reason.” Emotion can be an expensive indulgence.
If you’d like to have an unemotional conversation about real estate feel free to contact:
Seamus Holloway (414-243-1744) – Mike Dupar (414-364-4903) or Michael Holloway (414-254-4129) and we’ll talk.
Thanks for reading,
Michael D. Holloway
This email was sent to [email address suppressed].
You may instantly unsubscribe , or forward this e-note to a friend.