How will we know which home to buy?
Question of the week: How will we know which home to buy?
Answer: It will tell you.
In the summer of 1987, I was starting my career in the mortgage industry, at the time not know it would in fact become a career. My territory for the company I was working for was the Fullerton area and I would spend my days visiting real estate offices trying to get appointments with agents to introduce myself and solicit business. On weekends I would drive around the area following open house signs to meet agents and hopefully some buyers looking at homes.
One Saturday or Sunday I walked into a home being held open by an agent I had met several times after he invited me to come by when I saw him on Friday. I cannot recall his name, I’ll call him Bob for convenience sake, and he had a real estate agent since the 1960’s. The door was open and as I walked in, I heard his booming voice, “Do you want to buy it?”
The price was around $175,000 as I recall and I replied, “I can’t afford to buy it.”
“But if you could afford it, would you want to buy it?”
By now I had walked through the entry way and a hallway to where Bob was standing in a dining room-living room area off a small kitchen. I replied that I did not think it would be a home I would like to buy, but it sure looked nice and I was sure he would get a buyer that day.
Before I had a chance to ask if he had any buyer, Bob wanted me to speak with about qualifying or mortgage questions he explained why he asked me if I wanted to buy the house when I walked in. “It’s the three-step rule.”
Bob told me that over his twenty years in the business he learned a long time ago that people knew if they wanted to buy a home by the time they had taken three steps into the home. He said that for the past several years he asked everyone as they entered his open houses if they wanted to buy it and often times could guess how they would answer by their faces and body language. Something about when you first enter a house you quickly decide if it can become your home, he said.
Over the years I have told this story to many of my clients after our conversations for pre-qualifying or pre-approval. From my own experience I have expanded my views on the matter beyond three-steps.
Here’s where Dennis gets a bit metaphysical.
After initial conversations with clients I tell them, “now that you know you are ready to buy your new home don’t be surprised if later today, or this weekend you come upon a home for sale and want to buy it.” And very often that is the case. And very often after that I ask, “did you know within three steps of walking into the house? And very often, sometimes with a pause, “yes, how did you know?” I know because Bob told me.
I am a firm believer that while you are looking for your home, it is looking for you, for the right family to occupy it and make it happy.
Decades of experience working with and speaking to buyers about their experiences has validated my belief. Families that are ready to buy but want to wait until…after school is out, after a job promotion, after they get their home ready for market, after…after…after…call me up, “Dennis, we were driving home from having brunch with friends and saw an agent putting up and open house sign, we decided to just have a look and we love it! We want to write an offer.”
“Dennis, we said we wanted to wait, but my co-worker said her sister is going to put her house on the market because they are moving out of state. She told me where it was and I drove by on the way home last night and it is perfect. I saw it at lunch and we want to buy it.”
When they were pre-approved to purchase a home, a barrier was lifted and they became open to a new home. Once they were open for a new home then homes are available connect with them and they find each other. The home needed a family and the family needed a home.
When the home owners enter the home they know quickly if they want to buy it, why? Because they feel very comfortable, they feel calm, they feel at home. It happens, time and again.
Carrying on with this line of thought. You home is a primal need. Food, clothing, shelter are basic human needs for millennia. When you decide you want to purchase a new home, and are open to changing such a major part of your life, you open yourself to other changes. Okay, Dennis is getting a little weirder here.
There are times in our life when we are open to change. The younger we are the more frequent these openings occur in our lives, as we get older they still appear but they become further apart. But once we are open to change in a relatively short period of time a lot of change can and will happen so be ready. Often the trigger is a change in housing.
Over the years, working with individuals or families purchasing new homes I have seen (and personally experienced) them under going many other changes within a few months or year.
I have seen couples dating for years and not yet formally engaged get married. Conversely, I have had two couples in the middle of selling a current home and buying a new home separate and file for divorce.
I have seen individuals who were single and buy a home call me not too much later saying they have met someone, are getting married and they are looking for a bigger home.
I have seen many, many buyers changes jobs in or right after escrow closes for better opportunities and more pay. I have seen a business owner sell his business after moving into a new home, “because the timing felt right,” and semi-retire into consulting. I have seen another client purchase a business for the same reason.
Personally, I bought my first house not too long after Leslie and I started dating and she was still living in Sacramento, knowing it would be our home. That was in mid-February, we got engaged Memorial Day weekend and married Labor Day weekend, all in 1994. In August 1998 we sold that home and moved into the home we are in today. We had been trying to become parents for a few years, in December we conceived. The following September our daughter was born ten days before my partners and I started Stratis Financial. We were open to change and it happened. My wonder is what change will be open to in about four to five years when both girls are finished college and starting their careers somewhere? How much with their openness to change and decisions influence our own?
Bob was right, three steps you and your new home have likely connected, you found each other. And once that connection is made be ready for other connections to be made.
How will you know which home to buy? Listen, it will let you know!
Have a question? Ask me!
Rates for Friday July 10, 2020: No economic news this week impacting rates, which have been in a very tight trading range for a few weeks with slight drifts up and down, this Friday we catch a down drift from last Friday. We are still seeing large disconnect in the high-balance market from purchases and refinances, as well the spread remains larger than it has historically between “no-point” transactions and those with one or fewer points. Call for details and quotes.
FIXED RATE MORTGAGES AT COST OF 1.25 POINTS LOCKED FOR 45 DAYS:
30 year conforming 2.625% Down 0.125%
30 year high-balance conforming 3.00% Flat
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down with 740 FICO score for purchase mortgages.
Recalling my experiences from over thirty years ago as I started out in the mortgage industry, the first vision that came to mind is my 1980 Toyota Celica. I purchased the car the last week of my freshman year at college, May 1981, from Kimio Hirano, a Japanese student who lived in next door, through our shared bathroom. Kimio was one of many Japanese students on campus as part of the English as a Second Language student. His English improved dramatically in the second semester when he stopped going to every class every day and hung out with us more. He purchased the car and drove it around the Western United States and sold it to me before he went back to Japan.
It was bare bones car, the only “luxury” was the leather seats. Five speed manual transmission, hand crank windows, all black interior, no air conditioning, a perfect first car for an 18 year old.
Not as perfect for a young 20’s man of business driving around North Orange County on hot summer days calling on real estate offices. In those days we always wore suits and I would be donning my jacket every stop to cover the very evident perspiration dampness on my shirts. In the glove box was a Ziploc bag filled with quarters, dimes and nickels—my “car phone.”
When my pager went off, I would try to stop by real estate office to call into the office for my message and then make the return call—often a friend wondering if we were going out that night or asking what time our softball league game started. Very often though I would stop at a pay phone, pull out my car-phone-bag and return calls. I knew where almost every pay phone was in the Fullerton-Yorba Linda-La Habra-Placentia area.
That was a great car, no A/C and all.
Have a great week,
Dennis
Past Weekly Rate & Market Updates can be found on my blog page at my website www.DennisCSmith.com/my-blog
