Before You BUY A HOME In 2021 - WATCH THIS VIDEO

the housing market just keeps getting crazier and crazier i mean some homes as soon as you list them have 89 showings in just the first few days and to compete in these bidding wars buyers are now having to send letters love letters telling the sellers why they should sell the home to them and now these massive bidding wars are getting so crazy that they're pushing some homes to sell for double asking price so if you were thinking about buying a home make sure you watch this video until the end what's up everybody i am jaspreet singh from the minoritymaster.com where money minds rethink rich we are seeing literally a perfect storm in the housing world because we have multiple factors coming together which are helping home prices skyrocket first there's a small inventory of homes available for sale second we're facing a labor shortage right now so it's taking longer and longer for construction companies to build new homes which is keeping the inventory of homes small third between 2020 and 2021 lumber prices have skyrocketed a hundred percent so it's a lot more expensive to build a home and do renovations fourth when the united states entered a recession the federal reserve bank slashed interest rates to historic lows so mortgage rates dropped and everybody's trying to take advantage of these low mortgage rates by buying a home so you have an insane demand to buy a home even though we have a low inventory of homes available for sale and the cost to build a home keeps going up and of course number five all of the stimulus money passed by the united states government disproportionately helped some people more than other people because some people didn't really get hurt by that pandemic i mean a lot of people lost their jobs for the first kind of couple months but after that a lot of people started to get their jobs back and even if you got your job back you were still getting stimulus checks for the government like i was just at a stone and granite shop the other day and one of the workers was telling me that he was not working for 10 weeks but during that time he was also getting unemployment so he never really felt a financial pinch and then he went back to work so things were back to normal for him but he got 14 dollars worth of stimulus checks because he has a few kids and so he got an extra fourteen thousand dollars over the last year and that's just extra money for him to spend so you have people that were really benefited by this pandemic that were given free money by the government free money because if you're subscribed to our channel you know that the most expensive kind of money is free money but if you were in that situation where you benefited now you have some extra cash that you can use to go out and buy a home so now the question is what do you do and what's coming in a housing market well that's what i'm going to be talking about in this video and at the end of this video i'm going to be talking about my thoughts about what's going on and what might be coming so make sure you watch this video until the end but before we get into that i need you to do me a quick favor and smash that thumbs up button below and something i do want to let you know is that we have just launched our brand new minority mindset community on discord we call it the guac talk community so if you want to come hang out with other minority mindset thinkers talk about the housing market talk about the stock market talk about crypto or talk about anything else that's related to financial education or money management come join our free guac talk community on discord i got a link to how you can join in the description below if you're thinking about buying a home right now the first thing you got to understand is what is causing bidding wars because the last thing you want to do is be one of those people getting in one of these bidding wars and now you're having to fight through your money to buy a home what you're seeing happen all the time right now is realtors are working with sellers and they have a home let's say a home is worth 300 000 and they're gonna tell the seller hey i think this home is worth three hundred thousand dollars but instead of us selling the home for three hundred thousand dollars how about we list the home for two hundred and seventy thousand dollars what that does is they're gonna list this home for below market value and everybody is going to see that there's a home listed for 270 000 when every other home in the area is listed for 300 000 or more and so what that does is it creates a lot of buzz because everybody's going to talk to the agents and say oh my god look at this home i just saw in zillow this home is listed for 270 000 let's go check it out and then two days later three days later there's a hundred showings and now everybody sees that every 15 minutes there's another couple coming to this house to take a look at this property and now people get excited oh i really like this home and it's a great price let's make an offer and so now in the first three days you have 30 offers on the property three days later the selling agent is going to say all right we have multiple offers on this property and so if you want to have a chance to buy this property you can raise your bid or leave your offer as it is let us know within 48 hours this is a psychological tactic the salespeople use to get more people to look at a home to get more offers and to ultimately hopefully get a higher price from the home than if you just listed the home for 300 000 because if you list a home for market value you might get a little bit more than asking price but it's kind of reasonable right because this is what the market wants but if you list a home way below market value and a lot of people fall in love with the home now people are going to be fighting each other because people don't want to lose a home that they fall in love with so now instead of selling the home for 300 to 305 000 someone's going to come in and they might offer 320 or 330 000 and now the seller got way more than what they listed the home for and they got way more than what they might have gotten if they just listed the home for 300 000 so if you're trying to buy a home and you see this happen i want you to understand the game know what the listing agents are trying to do and so if you fall in love with the home you got to understand the game you got to understand that if that is a situation then you're probably going to have to go significantly over asking price to get the home but if you do not want to get into that trap then know that before you go in know the game that the seller's agents are playing that way you can be smart and avoid it if you don't want to get into that game the bidding wars that i've been saying happened because i am a real estate investor and i've been looking to buy some more properties but the bidding wars that i've been seeing have all been with properties that are turnkey ready to go because people want a home to live in and they don't want to find a home that's ugly or beat up and so they're looking for a good home and a good location and these are the homes that are seeing bidding wars homes that are in not so good locations or homes that are not really ready to go haven't been seeing the same demand as other types of homes which kind of presents an opportunity for you but i'm gonna get to that in just a little bit the second thing i need you to be aware of if you are buying a home right now is this new thing that's going on where people are making offers to buy homes with no due diligence contingencies and no contingencies to do an inspection on the home here's the thing if you want to buy a home and this home is on sale for 300 000 and i'm a seller and i get 20 different offers i'm gonna want to take an offer that's going to be the least headache the least stress and it's going to put the most money in my pocket so now what buyers are trying to do is they're saying all right i can't give you 400 000 for a 300 000 home but what i will do is i'm not even going to inspect the home i will just take the home as it is and if something's wrong with the home i'll deal with it later that way now the seller doesn't have to worry about the buyer finding something wrong with the home and then asking for more money after we've already entered into a contract if the seller and the buyer agree to no contingencies and no due diligence period now the buyer will be required to buy the home and if they don't buy the home they're going to lose their 5 000 deposit as an attorney who's not your attorney and as a real estate investor i do not recommend you go down that route especially if you're not too familiar with how homes are built i've done a handful of real estate investment deals i've been involved with condos and single-family homes and apartment complexes and there's only one deal that i ever lost money on it was a home a single-family home that i bought without a private property inspection before i bought the home i bought the property because there was a contractor that i was working with who recommended that i should buy this home and i trusted them and i bought the home and after i bought the home that's when i realized that this home had so many fundamental kind of foundational issues with the property and it ended up costing me a ton of money i do not want you to deal with a headache and so if you have a private property inspection which means after you get into a contract to buy a property you bring your own building inspector out they're going to walk through the property make sure that the foundation's okay make sure that your roof is okay make sure that the furnace and the ac work make sure that your plumbing work and make sure that the property is not about to implode if you do not do that then you're taking on a lot of risk because you don't know if something's wrong with the property or if there's a ticking time bomb because the roof is about to fall in or if the foundation is caving in you want to know this before you actually buy the home because these things can cost tens of thousands of dollars if they are a severe issue one of the things that you can do that i've done is shorten your contingency time because before any time i made an offer on a single family home i would ask for a minimum a minimum of 10 day due diligence which means i have 10 days to do all of my inspections take my time to walk through the property make sure everything's okay now i've shortened this time sometimes i do seven days sometimes i do five days i know the building inspectors beforehand and so i know that as soon as i get into contract to buy property i can get my building inspector out there within 48 hours so even five days is okay with me so if you have the building inspector ready ask them how much notice they need and if they can come in in a 48-hour notice maybe you can do your due diligence contingency period for just four days that way you can at least get your private building inspection done before you buy the home because it is very risky to buy a home without any sort of inspection if you do not know how homes are built and if you do not know how to tell if a home has serious fundamental foundational issues at that point you're taking a big risk the property looks fine it has nice floors it has a nice roof it has high ceilings so you assume that everything is okay and you hope that everything's okay but you're not gonna know until things go wrong and it's better to know before rather than later and so if you don't do an inspection you're taking a risk and you're hoping everything will be fine and hopefully it will be but there's also a chance that it won't be so something i want you to keep in mind third if you're trying to find a bargain on a home maybe because you're feeling kind of priced out or maybe because you're trying to find an investment property you got to know how to find the deals in the last two months i have made a dozen or a dozen and a half offers on properties and out of all these offers that i made i've been accepted on only two of those offers and the interesting thing about that is that both of these offers that i got accepted on were offers that i made below asking price these were two properties that i got below market value while all the other offers that i made were above or at the very least at asking price but most of them were way above asking price so i got rejected on all these deals where i made ad asking price or above asking price offers but i got accepted for these two deals where i made below asking price offers because these two deals were not where everybody else was looking kind of like what i was mentioning in the beginning of this video is that the homes that are going through bidding wars and the homes that everybody's trying to buy right now are cute homes that are in good locations that are ready to go these are homes that are beautiful you walk in there's new carpet there's new hardwood flooring there's new paint on the walls they look beautiful and you can literally just move right in now i don't want you to buy a home in a bad location i do not want you to do that i want you to get a home in a good location but maybe if you look at a property that needs a little bit of work that's where you can come in and get this property below market value because nobody wants to look at that people walk into this home and they see oh the walls need to be painted oh we might need some new carpet and then they walk out because they don't see the vision they can't envision this home being renovated because you can spend a few thousand dollars and really make it look nice and make it look just like every other home out there but you can get this property for 10 20 000 below market value even right now versus something else where you walk in and you see the new chandelier and you see the nice carpet you see the nice paint and you're like wow i want to have this home right now it's very easy to fall in love with a home that's beautiful and ready to go versus homes that need a little bit of work people don't fall in love with it and so if you come in and find these properties you can buy this property below market value get a fair price for this property and then you can renovate it and now you have a beautiful home you didn't overpay you might even got it below market value and you don't have to deal with these bidding wars one way that you can find these homes is look for investors that are selling their homes because investors who are tenants in the property a lot of times they're not going to come in and fully renovate the home they just want to sell it because they might have been renting it for the last five six years and now because home values are up they just want to cash out and so they're willing to sell it below market value because they just want to get some cash and walk away i've seen that happen quite a few times and so that's an opportunity for you to come in and find this home that is decent but needs some work and so you can get this property below market value because other people are not coming in and falling in love with this property the second thing that you can look for are distressed properties some of these might be investment properties where a tenant might have damaged the property now the investor just wants to sell it or others of them might be foreclosures now i know foreclosures are kind of banned right now but you still have foreclosure deals out there you have some tax foreclosures some government foreclosures that are slipping through the cracks because there are some exceptions and so if you can find these deals you can get these properties below market value because again they probably need some work you just need to know where to look the third thing that you can do if you're willing to be a little bit creative is now you can find people who are behind on their mortgages and contact them before they go into foreclosure and before they list their home for sale and say hi i know your home is worth 300 000 and you owe 280 000 on your mortgage and you're behind on their mortgage how about i come in and i buy a property for 295 000 you don't got to worry about listing your home you don't got to worry about dealing with a realtor you don't got to worry about paying all those selling fees i would just buy the home from you for 295 000 now the seller is gonna walk away without any headache without dealing with a realtor without dealing with all the real estate commissions and now you get to buy a home at or below market value and you get to buy the home without worrying about a bidding war this is actually a really popular strategy that real estate investors use to find properties below market value because when somebody gets behind on their mortgage all they want to do is get out and if the home is worth more than what the mortgage is you can come in and buy this property below market value you just got to know how to find these people one of the easiest ways to do that is go onto a website like a sponsorforeclosure.com and you can enter in your neighborhood your zip code your city your state whatever you want and they have a whole database of foreclosure listings government foreclosures bank foreclosures pre-foreclosures and auction properties that way you can see the distressed below market value deals in your area and now these are deals where now you can contact the owner if it's not for sale yet and now you can try to work with the owner to buy the property before anybody else even knows about it so you want to understand the different stages of a distressed property because when somebody is in pre-foreclosure status that means that now they're behind on their mortgage and this could be an opportunity for you to come in and try to buy the property before anybody else knows about it so the database after you sign up they give you access to the homeowner information that way you can contact them and figure out if you can buy the home or not plus they also try to give you a range of what they think the home could be worth and what the rental value of the home is if you are an investor then once the property goes into foreclosure it's going to go to an auction and all of the auction information is also going to be on this database so once you enter in which neighborhood city zip code state you want it will give you the properties that are there and i'll tell you what status the property is in and i'll show you how you can either find the auction or different ways that you can find the owner or if it actually goes into foreclosure and doesn't sell at the auction and now it's sold on the mls you'll also have the list of the real estate listing agent so you can contact them directly so this is kind of a database of all sorts of distressed properties that way you can find a property below market value if you are interested in this foreclosure.com is giving you minority mindset fans a seven-day free trial that we can try it out and see if it's right for you so if you want to learn more and see what kind of distressed deals are in your neighborhood i got the link to how you can test out the free seven day trial in the description below minority mindset is a partner with foreclosure.com so if you use them we will get compensated but there's no additional cost to you so if you want to learn more and get a free trial i got the link to how you can do it in the description below the fourth thing that you got to understand if you want to get approved for any offer in today's market is you have to show that you have the ability to get the cash to close when you're in a seller's market like the one we're seeing right now that means you have a lot of buyers and not that many sellers and so when you have a lot of buyers sellers can sell their property to whoever is going to give them the most money and the least headache and so if you go to a seller and you make an offer and you said you want to buy a home for 300 000 and you don't have the 300 000 in your bank account and you aren't approved to get a three hundred thousand dollar loan from the bank yet then the seller's gonna say why would i wait for you to get approved or to find this three hundred thousand dollars somewhere when i can just sell the property to somebody who already has a pre-approval letter from the bank if you want anybody to take you seriously in this market you have to either have the cash in your bank to buy the property all cash because a lot of people have been buying properties all cash or if you don't have that you need to at least at the very very least have a pre-approval letter showing the seller that you are pre-approved up to whatever price you're making the offer for because if you can show them that hey yeah i don't have the cash to buy the home but the bank has already said they're willing to give me this much money now you are much more likely to be taken seriously because you can show the seller hey you don't got to worry about it i will get approved for the cash and the fifth thing you got to understand about trying to buy a home right now is if you want to get accepted you have to make your offer enticing there's a few different ways that you can do that the first thing you got to do is when you see a home you like you gotta be quick you gotta go in and you gotta see the property within the first couple days i know that's kind of annoying and a waste of time because you're probably gonna have to see a lot of properties but this is just the market that we're in if you do not make an offer quickly you're probably gonna end up in a bidding war so the quicker you can make an offer the less people you're going to compete against because if you can make an offer the first day that a property goes live and somebody can accept it before a whole bunch of other offers can come in now you just saved yourself a bidding war so you need to be quick and looking at these properties and making offers second one of the easiest ways that you can make your offer more enticing without sacrificing more money is just by increasing the size of your emd your earnest money deposit this is the deposit that you're going to put down to show your good faith in wanting to buy the property so instead of putting down five thousand dollars maybe you can put down ten thousand dollars the thing that you gotta understand about this is you can get this money back as long as you have that contingency in the contract which says that you have three days five days seven days whatever it is to do your due diligence so during this due diligence period you can walk through the property with your building inspector and if you find something that's major and wrong you can walk away from this property cancel the contract and get your deposit back as long as you cancel the contract within your time frame in the contract now make sure you work with your real estate agent and maybe an attorney on this because you don't want to do this wrong okay so you got to know how much time you have to inspect the property and you got to know by when you have to tell the sellers that you want to cancel the contract but if you have a higher emd a higher deposit what that shows the sellers is that you're serious and it really doesn't cost you that much more as long as you do things in a timely manner because yeah you're putting up more money today but you're going to have to give them that money anyways when it comes time to closing you're just kind of putting up right now to show that you're seriously interested and so if a seller gets two offers one with twice the deposit size and someone else they're probably going to take this one just because it looks more attractive next you want to show the sellers that you have the cash in your hand to close right now or that you can get the cash quickly sellers do not want to be running through hoops this is just the market they don't have to because if you're going to make them work somebody else won't they'll just go to somebody else so you want to make life as easy as possible for sellers so you want to show them hey you don't got to worry about me finding the money i already got the money either you got pre-approved or you got the money in your bank you want to make sure you demonstrate that when you make the offer do not make them come to you and ask you for more information then i want you to be flexible with your closing time so when you make an offer tell them that you can close quickly but you're also flexible say yeah i can close in the next 30 days but even if you are not ready to close in 30 days i'm willing to extend the closing date to whenever you're comfortable so this way they're flexible and you can show the seller hey yeah i can close quickly or i can close in two or three months whatever is easier for you because some people are gonna come in and they're gonna say i have to close on this property in three weeks yes or no and now you want to be in that position where you can say hey yeah i can close in a few weeks or i can close when you're ready to close if you really fall in love with the home and you really want to get it one of the things that you can also do is write a personalized letter to the seller saying hey i know that you have a beautiful home and i would really love to buy the home because my family lives down the street because my grandma's sick and she lives two houses down because whatever your reason is you want to show the seller why you're in love with this property and why the seller should sell their property to you i have seen through my real estate agent i have seen sometimes seller will sell the property to somebody with a lower asking price than somebody else just because they gave them a personalized letter it doesn't always work but sometimes it does and it doesn't hurt to try and the funny thing about this is in a couple deals that i actually saw the sellers actually wrote on the listing kind of information for the realtors because you have this database they wrote on it that they are not accepting any personalized letters because i guess they don't want their sellers to feel enticed through emotions because they probably just wanted to get the most money but this is something that you can do if you really fall in love with the home send the seller a personalized letter as to why you love the home and why they should sell you the home by the way in case you were wondering yes i am a licensed real estate agent but i work with another real estate agent that way i don't have to worry about doing any of the paperwork they handle all the paperwork they handle all the transactional stuff i just find the deals and the last thing that you can do to really make an enticing offer is you can put an escalation clause in your offer that way you can show the seller that you're serious the way an escalation clause works is you make an offer for three hundred thousand dollars and you also say in the offer that if you get multiple offers you are willing to beat any other offer by five thousand dollars as long as you don't have to pay more than three hundred and thirty thousand dollars now what you're telling the seller is yeah there might be other offers but i'm willing to go up to three hundred and thirty thousand dollars and i will beat any other offer you get by five thousand dollars so if now the seller gets multiple offers and the highest offer is 315 000 now they're saying that you can come in and buy it for 320 000 if the sellers and the listing agent accept that well now you have a better chance to buy the home the housing market is crazy right now and i know a lot of people talking about a potential housing market bubble or a potential housing market crash but i want you to remember is that this is not 2008. obviously there are risk factors here we have real economic risks we have real issues in our economy but the difference between now and 2008 is before the 2008 crash everybody was buying homes with a variable interest rate mortgage everybody was buying homes with no money down now people are buying homes with equity and they're not taking out variable interest rate mortgages at least not yet at least not yet at the time we're recording this video now this doesn't mean that real estate prices cannot come down because we've seen home prices go up essentially like this i mean if home prices go up significantly faster than wages you're going to have to see home prices correct but home prices are going to keep going up as long as you have a lot of buyers as long as you don't have a lot of sellers as long as it takes a long time to continue constructing homes and as long as interest rates stay low because when interest rates are low people want to take advantage of these cheap mortgage rates and they're going to want to go out and buy a home now you are going to hit a point where home prices are going to slow down because i mean as interest rates start to go up as you start to see less buyers as you start to see less sellers you're going to start to see an equilibrium in the market where now you're not going to see this kind of huge disparity between the number buyers and the number of sellers eventually it's going to correct and so home prices are not going to go up this fast in the future maybe they'll slow down maybe it will go down a little bit but for a whole price crash to happen you have to see major economic changes happen where you're going to have to see major changes in the real estate market which is why yes it is risk but which is why you need to buy a home that you can afford that's the most important thing right now because if you're getting a 30 year fixed rate mortgage if you can afford the monthly payments that is the most important thing because then even if home prices go down you are okay because you can afford your payments so yeah even if home prices go down because that is a possibility you just want to make sure you're okay and the way you make sure you're okay is if you can just afford the monthly payments if you can afford the payments on your home you've got nothing to worry about if you enjoyed this video here's the video on why the fed is trying to take the housing market to the moon and while you're at it download our free money management pdf and as always keep hustling now the interest rate that the fed sets is called the federal funds rate this federal funds rate is not the interest rate that you borrow money at when you want to buy a home this federal funds rate is the interest rate that banks borrow money from

Channel: Minority Mindset

Views: 95,433

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, buy a home, housing market, how to buy a home, mortgage, get a mortgage, mortgage rates, get a loan, home buying, home, housing, buy a house, get a home loan, housing market 2021, buy a home 2021, real estate, real estate market, first time home buyer, buying a house, should i buy a house in 2021, real estate investing, investing

Id: -m9CV2bpxpw

Length: 23min 58sec (1438 seconds)

Published: Wed May 26 2021