Investing in real estate for the first time can be equal parts exciting and intimidating. And lately, it can feel like a distant dream.
In Episode 14 of REAL TIME, we speak with former TV host and broker/owner Sandra Rinomato about the fears or misconceptions that hold some first-time home buyers back and what REALTORS® can do to help them.
Here’s a quick preview of some of what you’ll find in this timely and engaging episode:
Erin: OK. What makes the experience of buying a home so different for a first-time buyer?
Sandra: Wow. Well, there’s so much culture shock, if you’ll allow me to use that expression, because they’re considering taking on what they consider to be enormous debt with a mortgage, and they’ve never owned a place before, so there’s a lot of things to take into consideration: if the roof caves in, I have to fix it, or if the furnace breaks, I have to fix it. There’s all of that to worry about as well. Plus, they don’t really know how they’re going to use the space. They’ve never owned before, they don’t know the responsibilities, they aren’t really familiar with the ongoing costs associated with homeownership, and it’s pretty scary.
Erin: Now, homeownership isn’t right for everyone, but in your new book, Home Worthy, you talk about exploring your values, beliefs and goals before investing in real estate. Finding out if it is right for you. What does that mean to you, Sandra?
Sandra: There’s a whole lot of psychology behind this. First of all, is it the right time of your life? Is your family growing? Are you prepared to do this? Why are you doing this? Then that whole why exercise, going seven levels deep into the reasons why you want to become a homeowner, or invest in real estate, for that matter, you need to do that exercise because you’re going to learn a lot about yourself, and you’re going to uncover a lot of things. You’re going to become aware of some of your beliefs, and those beliefs are going to crop up at certain times of the home buying journey to either hold you back or propel you forward.
Erin: How should a first-time buyer, Sandra, manage expectations around budget versus wish list? We all have this idea of our forever home the first time we buy, and that may not be realistic, is it?
Sandra: No, definitely not. I truly believe that you work your way up the property ladder, especially now that prices are so high. To think that you’re going to live there for the next 30 years, is unrealistic anyway, especially as a first-time buyer, because you don’t know what’s going to happen.
I will never say to someone, just get into the market because you’re getting priced out. I don’t believe that. I believe when you’re ready, you will find a way to make it work. Again, if you are attached to and aligned with your reasons why you want to become a homeowner, the options become available to you. You will start to see opportunities, and a REALTOR® will always be able to help you sort of find another way to get there.
Erin: Sandra, you have an amazing idea, and it could be some really tough medicine. I wouldn’t want to do it, but you go for it, about budgets and tracking for one month. What is it?
Sandra: I did this years and years ago, and I was floored. People who are budgeting for a house, this is what I recommend to you. For one month, track every dollar you spend. It’s really easy to do it with a debit card or a credit card, because you can see, at the end of the month, where your money went, because I don’t know about you, but I open up my credit card bill and I go, “What? I don’t remember shopping there. Oh, yes, it’s that thing.” You can see where you’re spending your money, and that’s important.
Erin: You’re all about empowering, and especially first-time buyers, and focusing on allowing women to create and change their own destinies, change the dream, and then just go from there. That’s fantastic.
On the flip side, what advice do you have for REALTORS® who are working with new home buyers? It sounds like there are a lot of things, and being a great listener seems to be the first part of it.
Sandra: Oh, it’s so important. You’re using a lot of psychology in real estate. You really have to open up the lines of communication. You have to work hard. Some people are way more verbose and open to sharing, and others are not.
The other thing is when you’re working with first-time buyers, you have to explain things in a feature, advantage benefit. Don’t just give the features. Sometimes a real estate agent just gives the features. Well, it’s got this. In your head you’re saying, like you said, you wanted, but you have to explain. This delivers that thing you wanted. You said you wanted this, here it is. This is the feature and this is the benefit to you.
That was just the tip of the proverbial iceberg. Catch all REAL TIME episodes, including this one, at crea.ca/podcast or subscribe wherever you get your podcasts.