I can’t wait until my girls are old enough to buy their first home. Whether they like it or not, I’m going with them to Open Houses just so I can ask all the Realtors, “Is the price negotiable?” This will be the ultimate dad joke, and they’ll be so embarrassed. Aside from that, hopefully I can give them some good advice. Here are 6 things I would tell them when they are old enough to buy their first home.
1. Don’t buy a new house just to get a low interest rate.
I saw a builder advertising 1.25% interest rates. That builder has disclosed their average incentive on sales is 13.3%. What that means is people are paying $500,000 to get a $450,000 house. That’s fine if you’re going to stay in the home for 10 years but otherwise, you’re upside down for a long time. My personal opinion is if I have the resources, I would financially help my kids to avoid this mistake.
2. Don’t hire your real estate agent because you saw them dancing on a TikTok video.
3. Don’t buy the weird house.
Last week I met with a couple who bought a really funky home out in Jonestown back in 2021. Normally, I ask people why they bought their home because it helps me target our marketing. In this case, I asked because I couldn’t understand why they bought the house. Unfortunately, they are upside down, and I don’t have a good solution for them. A home like that is fine for someone who is financially secure but it’s not appropriate for someone who doesn’t have any financial margin for error and might need to sell it.
4. Don’t do DIY updates (unless it will look professional).
I’ve seen a lot of bad DIY jobs lately. So bad that it’s damaging the house and then reducing the home value. Sometimes the materials used are poor, and sometimes the craftsmanship is bad. Sometimes it’s both. What complicates things is the homeowners don’t have the money to fix the damage they’ve done and the home sells for a lower price than it would have without the DIY updates.
5. Drive by the house you’re buying on Saturday night.
What’s the neighborhood like. Is your soon-to-be neighbor behind the house having loud parties every night? Better to find out before you sign a contract. You won’t find these things out if you only see the house on Thursday at 2 in the afternoon.
6. Skip the starter home.
Buy the home you can grow into. You can’t accuse me for being salesy since this is advice for my own kids. Of course, this would depend on finances, but I’ve had too many people tell me they wish they had bought a bigger home when they had the chance, and now they are stuck.
What do you think of my list? What advice are you giving your kids about real estate?
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