Last Updated on 2023-11-28 by Tom
For many, buying/owning the first home is likely the most significant financial move in a lifetime, yet 9 out 10, if not more, have failed and will likely fail strategically for the following three reasons: 01) Confused dream; 02) Confused timing; and 03) The lack of skin in the game. The blog breaks each issue down and shine a light on what the wise top 1% A+ home buyers do instead..
Reason 1 – Confused dream
Many simply fail to distinguish the fundamental difference between two vastly opposite but stunningly twin-looking concepts – “Your first dream home” and “the first home for your dream.”
So what is the difference?
“Your first dream home” can be as grandiose as your wild dream can carry you to and beyond. The danger for many, though, in the pursuit to overreach this wild dream, is that you can stretch yourselves too thin, allowing the mental disease of “keeping up with the Joneses” to cripple you and overspending too much, inevitably turning yourselves into the slaves of the house and the dreams into dreadful nightmares.
“The first home for your dream”, on the contrary, is very different strategically. Your first home is the initial solid step among the few well-planned steps as needed that will move you toward your dream and turn it into true reality once you execute the well-cultivated plan, while, in the meantime, discovering and enjoying the true joy of first homeownership.
Reason 2 – Confused timing
Again, there is a big yet subtle difference between the so-called “The right time to buy a home” and “the time to buy the right home.”
Strangely, for many, the media is the “trusted” source subconsciously on the topic “when is the right time to buy a home.” When the media says that the economy is booming, interest rates are lowering, unemployment rates are historically low, many people jump into multiple offer-wars to buy an overpriced house. Subconsciously, many start to feel the urge to buy now or never….
However, the real question a wise first homebuyer asks is “when is the time to buy the right home?” The best answer? 99% of the time, it is yesterday. The second-best answer is today. I will have another blog to share why so. Just a spoiler alert – the key words here are “the right home,” and it has a little to do with timing, a lot to do with you within.
Reason 3 – Skin in the Game
For many first home buyers/prospects, the task of buying the first home is daunting – How does financing work? How does the mortgage work? Do I need a realtor or not? What if the home has hiding deficiencies? Which specific individuals should I trust while they all call themselves professionals, promising to have your interest holding in their hearts utmost, many even have excellent Google reviews?
Welcome to the concept of “Skin in the Game” – It is quite simple, based on the first principle of “Action speaks louder than words.” Under this concept, when someone/program says they can help – besides a reasonable profit they will make as any business should do when things go as planned. Ask them – what is their skin in the game (money, time, effort, strength of their service that no one else has) when things may not go as planned? A wise first homebuyer would have these questions answered to their satisfaction before hiring the service.
Now, it becomes obvious why there are so many first home buyers who, seemingly, have made it but fail or will likely fail if the above three problems are not being addressed beforehand.
Given the stake that is going to put into the first home buying decision, no one can afford not doing it strategically, and must be done wisely before, not in the hindsight regretfully. I will have a few more blogs to hit the core of each individual issues of the above and more importantly, offer a solution to let you decide and choose.