Tag Archives: home

Beware the handsy Santa

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Yikes, is it December already?!
Our family makes the annual visit to see Santa at the mall.  I learned why this is my wife, Dee Dee’s favorite holiday tradition.  Well, it turns out Santa remembers us and is rather “handsy” as he expresses his appreciation of Dee Dee.  “Wow, you’ve got a real looker for a wife, Dad” shares Jolly Ol’ Saint Nicholas.  Of course, Dee Dee beams and the boys are really puzzled.
“What does ‘looker’ mean, Dad?”

“Just eat your candy canes, boys,” I reply.

Yes, this is my life and this actually happened.  I won’t be happy if Dee Dee wants to wait up all night for Santa on Christmas Eve.

Thank you all for your support and referrals as I build my real estate business.

I hope your Holiday Season is merry and bright.
– Eric

Tips for First Time Millennial Home Buyers

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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


Buying the first home means not buying the sports car

Screen Shot 2015-09-03 at 9.29.22 PMThe explosive growth of the Internet brought a lot of money to the San Francisco Bay Area and the Silicon Valley in the late 1990s. Many of my work colleagues and friends cashed in their stock options and bought high-end cars or lived BIG in San Francisco during those go-go years. Many of us younger employees did not know the difference between paper wealth and actual wealth. Unfortunately, the paper wealth quickly disappeared as pro-forma balance sheets fell out of fashion and stocks plummeted. Easy come, easy go.

Fortunately for me I did not get sucked into the craze of buying a BMW M5 and renting an apartment in the Marina. My Mid-West style upbringing made me far too frugal (or cheap!) for such “extravagance.” Fortunately I was able to same-day sell a chunk of my ISO options and chose to just sit on the cash. I continued to drive the 1988 Toyota Carolla I owned in college and rented with a roommate a two-bedroom apartment in less than trendy Sunnyvale. I was also able to have my company pay for a good portion of the MBA program I attended to avoid taking on massive student loan debt.

Yes, I experienced a ton of peer pressure for not living in the city. “Come on, Dunstan! Move up to the Marina with us. You won’t have to make the long drive home to Sunnyvale late at night…and “Social Safeway” is just crawling with honeys.” Many a tale has been told about love found in the produce aisle.

Screen Shot 2015-09-03 at 9.43.19 PMWhy didn’t I cave to the peer pressure or buy-in to the spendy trends at that time? I wanted to buy a house. That was my goal. Even back then, living in San Francisco was expensive and many of my friends there lived paycheck to paycheck. Several work colleagues graduated with an MBA and $100K+ in student debt. I graduated with no debt. Shortly after I started my first job after business school I was able to purchase my first house. Goal accomplished.

The San Francisco Bay Area housing market is even more competitive (read “expensive”) now than it was in the early 2000s. Buying a home or condo takes a significant cash down payment to meet the more stringent lending requirements. A hefty monthly cash flow is also required to take care of the trappings of ownership…namely property taxes, insurance and then basic living expenses. Home ownership gets expensive. Fast. But I think it’s SO worth it!

First time home ownership is still possible in the Bay Area despite the gloom and doom affordability market data. Sacrifices have to be made and savings goals have to be achieved. Life style choices have to be made too. The process of saving for the first home may take some time and may require renting with a roommate in a less fashionable area to amass cash. Building a monthly and annual budget is a great tool to help analyze where the monthly paycheck goes and decide what changes are to be made to funnel more cash to savings. I highly recommend Alexa von Tobel’s book, “Financially Fearless” to help with building a budget and savings plan.

Buying what type of house and in what neighborhood will also be defined by company stock performance and salary compensation. People make a lot of money in the Bay Area. However, how well one manages money will play a key role in the home purchasing power of the individual. Keep in mind that most first time home buyers will NOT be able to buy a home in a top neighborhood. Be OK with that. Buy what you can afford in the best neighborhood possible. How this is done will be discussed in future posts. Start small and gain equity to then move up to the next house/neighborhood. This is all very possible. It takes time, commitment and money management. I did it. So can you.

Please send me a note on Twitter (@ericdunstan) if you have any questions.


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