Last month I was invited by Millennial thought leader, television and radio talk-show host, Chelsea Krost to participate in her weekly Twitter Chat, #MillennialTalk. She invited me to share my thoughts on what Millennials need to consider as they work towards buying their first home. What a fun event. We had a very active and engaged audience who asked several great questions. Buying the first home is overwhelming. I hope my responses helped alleviate some anxiety and support the confidence of first time home buyers.
I’ve included the scripted Q&A transcript below from the chat session that took place on July 12, 2016 on Tweet Chat. I blew up my Facebook page that afternoon not realizing I had connected my Twitter feed. I got several texts from friends saying “Do you realize you made 1M + posts on Facebook?!” He he…sorry guys! I will be sure to disconnect Twitter from Facebook for the next #MillennialTalk event.
Enjoy and I hope you find the questions and responses informative! Please tweet me additional questions @ericdunstan. Tweet questions to Chelsea as well @ChelseaKrost if you’d like. She’s just great.
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Transcript from #MillennialTalk with Eric Dunstan on July 12, 2016
Q1 @EricDunstan I don’t want to settle down…why would I buy a home? #MillennialTalk
A1a. There are many benefits to owning a home vs #renting. #MillennialTalk
A1b. Sometimes owning a home can be cheaper and more beneficial than renting. #MillennialTalk
A1c. Having your own house means you can do what you want #MillennialTalk
A1d. Loan programs make it easier to buy a home #MillennialTalk
A1e. Depending on home, monthly maintenance can be limited…giving you free time #MillennialTalk
A1f. Each month your payment builds #equity in the home…giving you power to sell and buy a bigger home #MillennialTalk
A1g It also allows you to borrow against the equity to remodel (called a home equity line of credit) #MillennialTalk
A1h. There are many tax benefits in owning your own on. Talk to a financial advisor or CPA #MillennialTalk
Q2. @EricDunstan OK…what do I need to do to even consider buying a home? #MillennialTalk
A2a. Meet w/advisor & build #financial plan – there are several online services that help w/ this including LearnVest.com #Millennialtalk
A2b. Very important to understand money needed 2 buy a home & how long it will take 2 save enough money to make #downpayment #MillennialTalk
A2c. Think about your 5 yr plan for career, savings etc. If you plan to live in the area for 5+ years it makes sense to buy. #MillennialTalk
A2d #Realestate follows a 5-7 year cycle. If not, consider renting to avoid being caught in a downturn. #MillennialTalk
A2e. Think through life style…what area to live fits your style? Can you afford that area? #MillennialTalk
A2f Sometimes 1st time homebuyers need to break into market in area that may not be perfect fit, #MillennialTalk
A2g They can eventually upgrade to target neighborhood once their current home #equity increases. #realestate #MillennialTalk
A2h. If buying home is a big stretch, consider renting a room to someone as a revenue source. #homebuyer #MillennialTalk
Q3. @EricDunstan I want to buy a home…now what? #MillennialTalk
A3a Get prequalified for a loan, understand how much of a house you can afford. #homebuyer #MillennialTalk
A3b Look at all the loan options; conventional/gov insured, fixed rate, adj rate, 30 yr or 15 yr. There are a ton of options. #MillennialTalk
A3c Sometimes seller financing is an option. The seller acts like the bank u make mo payments to them.#MillenialTalk
A3d. Interview at least 3 real estate agents and talk to 3 lenders #MillennialTalk
A3e. Start touring around neighborhoods, going to open houses, use online search tools- @Zillow #MillennialTalk
A3f Get to know your #neighborhoods..and the kind of house that fits you. #MillennialTalk
A3g Determine what kind of house you want. Single family? Townhouse or condo? #MillennialTalk
A3h When you think through what you want up front…finding the right home is easier! #MillennialTalk
Q4. @EricDunstan How much do I need to put down as a downpayment for my home purchase and how do I calculate closing costs? #MillennialTalk
A4a It all depends on your financial situation, income level and credit score. #MillennialTalk
A4b To get the best rate possible plan on putting down roughly 20% of the home purchase price. #MillennialTalk
A4c Putting 20% down can be a lot of $$. There are other options but you may pay a hire loan rate #MillennialTalk
A4d. For example, some government secured loan programs require just a 5% down payment #MillennialTalk
A4e Talk to a mortgage officer at a bank or a mortgage broker to understand what is best for u #MillennialTalk
A4e. Closing costs are tricky and vary by state/county. Plan on paying around 2-5% of home purchase price #MillennialTalk
A4f. Mortgage providers and title companies will provide estimated closing costs on home u buy #MillennialTalk
A4g. Don’t worry! You won’t be surprised with BIG costs in the end. #MillennialTalk
Q5 @EricDunstan Do banks have flexibility with interest rates and do you recommend any online mortgage services? #MillennialTalk
A5a Yes! Banks offer different interest rates based on type of loan…#MillennialTalk
A5b. …and on credit score, down payment and savings of applicant #MillennialTalk
A5c As far as online lenders, I’ve been hearing great things about #QuickenLoans and #LendingTree. #MillennialTalk
A5d #BankRate is another great source to compare mortgage rates #MillennialTalk
Q6 @EricDunstan How do I determine if I’m getting a good deal when purchasing my home? #MillennialTalk
A6a He he. That can be tricky. Work closely with a listing agent who knows the area you are buying in #MillennialTalk
A6b Agent should run analysis of sales price of homes sold over past 3 months #MillennialTalk
A6c Analysis reveals average sales price for home of similar square feet and lot size in local area #MillennialTalk
A6d Agent needs to bring local market knowledge and recommend offer price range…#MillennialTalk
A6e based on condition/location of property you want to buy compared to average price in area #MillennialTalk
A6f The best way to lock in a great deal is to buy the worst looking house in the best neighborhood #MillennialTalk
A6g The more opportunity for u to make your own repairs and add $$ value the better #MillennialTalk
A6h You want to avoid paying the highest price for a home in the area #MillennialTalk
Q7. @EricDunstan What suggestions do you have for negotiating the sale price when purchasing a home? #MillennialTalk
A7a This is all market specific. A great real estate agent can guide you based on location and market conditions #MillennialTalk
A7b Your real estate agent needs to learn motivations for why the home is sold by talking to seller agent #MillennialTalk
A7c Maybe home needs to be sold quickly because seller has a job transfer. If so, offer a quick escrow close #MillennialTalk
A7d Or maybe offer to buy home “as is” without asking seller to make repairs. This is risky so ask your agent for guidance #MillennialTalk
A7e Another option is to offer seller a free rent back which means seller has more time to move out once home sold #MillennialTalk
A7f The more you learn about what helps the seller the more impact on sale price. It also shows you want to create deal that works for everyone #MillennialTalk
A7g Of course cash is king. If u offer to buy home all cash with no loan the seller will be VERY interested in working with u on price J #MillennialTalk
A7h I see a lot of all cash offers in the San Francisco Bay Area #MillennialTalk
Q8@EricDunstan Is it better to buy a new or existing home? Which is normally the better deal? #MillennialTalk
A8a Great question. I just made an offer on a new home for a buyer and there are benefits and risks #MillennialTalk
A8b Again, it all depends on the market conditions, location of home and needs of the buyer #MillennialTalk
A8c Some people prefer buying a new home for everything is..well…new! Nothing needs to be repaired. #MillennialTalk
A8d Amenities tend to be the latest standards and technology #MillennialTalk
A8e. New home developments also have units reserved for gov sponsored affordable housing programs if buyer is qualified #MillennialTalk
A8f Typically new homes tend to be in planned communities with home owner associations which define what can/can’t be done to home. #MillennialTalk
A8g Understand these requirements. #MillennialTalk
A8h Be sure to understand any additional fees associated with these associations as well. #MillennialTalk
A8i One potential downside is on sales price. Developers have a price needed to recoup costs in building new development. #MillennialTalk
A8j This price may not reflect market conditions. #MillennialTalk
A8k Existing homes have been on the market a while and may be more influenced by market conditions and seller motivation. #MillennialTalk
Q9. @EricDunstan What kind of expenses can I expect with #homeownership? #MillennialTalk
A9a Build a home ownership budget #MillennialTalk
A9b. Understand fixed expenses of owning home – #mortgage, insurance, taxes, water, electricity, taxes, etc #MillennialTalk
A9c. Understand tax rate for your state; safe for your #taxes each month #homebuyer #MillennialTalk
Q10 @EricDunstan What do I need to keep in mind after buying my home? #Millennialtalk
A10a Don’t buy your home and forget!! #MillennialTalk
A10c. Keep an eye on monthly expenses…track over 6 months are adjust spending #MillennialTalk
A10d. Look at #interestrates…if a rate is .5 less than your rate, consider #refinancing #MillennialTalk
A10e. Why should you #refinance? The difference in rates can mean saving $200+ a month #MillennialTalk
A10f Homes require regular upkeep – create a maintenance schedule #MillennialTalk
A10g. Create a plan and #budget to make home improvements. #MillennialTalk
A10h The money to #remodel the home may be in the house…consider a home equity line of credit. #MillennialTalk
Q11. @EricDunstan What parts of the home to #remodel to gain the most equity? #MillennialTalk
A11a. Generally speaking, a remodeled #kitchen and #bathrooms always generate greater value in a home #MillennialTalk
A11b. Expanding a master bedroom/bathroom also increases value #MillennialTalk
A11c. If you are up to the challenge, adding a bedroom and/or bath adds value…but there are implications to consider. #MillennialTalk
A11d Taxes tend to increase when the home size is increased. #MillennialTalk
A11e. As you #remodel, consider how appealing the rooms, amenities, etc will be to a potential buyer. #MillennialTalk
A11f This is a hard one for many people who want to create a home the way they want. #MillennialTalk
A11g However, in the event the home must be sold, it’s important to have a house buyers want to receive the highest purchase price. #MillennialTalk
Q12 @EricDunstan Where can we find more of your great info on #realestate and #homeownership? #MillennialTalk
A12a Thank you. I love sharing what I’ve learned. Please send me further questions through Twitter @ericdunstan or visit my blog at http://ericdunstan.com #MillennialTalk
A12b. Of course I will continue to post regular updates to your Twitter feed and blog #MillennialTalk
Eric Dunstan 
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