Marketing Happy Hour - The Millennial + Gen Z Home Buying Guide | Real Estate Advisor Mike Collier

Starting point is 00:00:00 Mike, we are so stoked to have you on the show today to talk buying your first home. But first, how are you? Welcome. Well, thank you so much. Yeah, I'm great. I'm doing great. It's 97 degrees right now, but I'm inside with the AC, so I'm feeling good. Yes. Yes. AC is important here in Florida. We're recording in May and it is getting quite spicy outside. So AC is very important. Spicy indeed. Yeah. Yes. Yes. Well, Mike, what is in your glass this afternoon? What do you have in front of you there? I have a beautiful cup that some of you may recognize from Trader Sam's Grotto. So I just love the cup, but what's in it is actually, it's actually mushroom coffee. So I've been, I've been drinking mushroom coffee

Starting point is 00:00:52 for the last, I'd say probably three weeks or so, maybe four weeks. And I like it. I like, I like the taste. There's an earthy, are you, are you familiar? Have you tasted it? Yes. Yes. Yes. Do you know what brand it is that you have? I was just going to ask. Oh, okay. Okay. Oh, awesome. Yeah. Yeah. You know, you know how I found out about it because they, they were like stalking me on Instagram and I finally just gave in and pressed the button and bought it. And now I get like a 30 day supply every day or every 30 days. And yeah, I've started drinking and it's good for like, you know, getting just, I mean, it's just good.

Starting point is 00:01:32 It has like seven different types of mushrooms in there. And I think it's working. On a wellness journey. I feel like that's a major theme for this year for us too. Yeah, that's good. Well, let's get into the conversation today. You are a realtor in the Orlando area and we're having you on the Marketing Happy Hour podcast to talk through first-time home buying, all the questions that we need to be asking,

Starting point is 00:01:55 all the things that we need to know in order to prepare for buying our first home. A lot of our listeners are at that stage in their lives and so we wanted to provide some insight from a professional on these topics so I just want to get right into it here what do you think millennial and Gen Z professionals should be considering you know costs involved finding the right realtor what location should they be in etc when they're looking to buy their first home I know that's probably a loaded question, but just any advice there that you have. Yeah. You know, I think, I think it's important to be educated on the process as you go through it, especially as a first time home buyer. You know, I've talked to so many home buyers even recently where they're like, man, you know, I'm just waiting for these prices to drop, or I'm waiting

Starting point is 00:02:45 for interest rates to drop. And we were going to do it, but then prices went up and interest rates went up. And so we're just waiting for the market to settle down a little bit. And I'm like, well, where are you getting that information that the prices are going to start going down? Well, they're saying that everything can't just keep on going up. And I think that's where it's really important to have that knowledge of understanding local market knowledge is very important. Central Florida market is very different from most other markets throughout the country. People are leaving other states.

Starting point is 00:03:17 I have more people, about 85% of my business is relocation or relocation clients. They're coming from other states, other cities outside of Central Florida and moving here. They're coming from New York. They're coming from California and moving here. And so as a result, that's one of the reasons why we've seen our property values continue to increase or price continue to increase. We don't have anything to do with the interest rates. Hopefully the interest rates start to settle down a bit, but I also warn people, I say, listen, when do you think there's going to be more competition for a house when interest rates start to settle down a bit. But I also warn people, I say, listen, when do you think there's going to be more competition for a house when interest rates are high or when they are starting to go back down? Because what happens is as interest rates start to go back down, everybody's waiting for the same thing. And now, yes, you can go and get that house because the interest rates are finally low enough to go get that house.

Starting point is 00:04:13 But what are you doing? You're now competing with other people, which means that you're going to have to pay more for the same house because that's going to create a bidding war. And so those who are waiting for this, you know, artificially low interest rate or or prices to to start going down, I would tell you that was probably not the wisest idea. The best idea is to understand your budget, understand what's affordable and understand that maybe right now, especially as a first time home buyer, you may not be able to get every single box on your agenda checked. But if you can get most of the most important ones, maybe you're going to be in that house for two or three years. Maybe you're there for five to seven years. Maybe you buy the house, you refinance a little bit later and use some of the equity that grows over the next five to seven years and take some of that equity from that house as a down payment for your next house and turn the first one into a rental. And so I have a lot of those conversations with my clients. I'm always talking to them about like, you know, what do you need right now?

Starting point is 00:05:09 What is the market expected to do? You know, where's your budget right now? Let's make a wise decision as opposed to an emotional decision or, you know, a quasi financial decision. Well, we're going to wait till the interest rates drop or we're going to wait for prices to drop. That's not usually the best plan. So that's where it's really helpful to have a local real estate advisor to be able to talk to you through it. And still, if you have the conversation, I always say start the conversation early. But if you have the conversation and still don't quite feel that you're ready, then we'll just slow roll it and we'll get to the point when you are ready. I've recently had someone that I spoke to,

Starting point is 00:05:50 they were newlywed couple, they just got married in October of last year. And they did what most newlywed couples do, they rented and they said, we're gonna rent for a year and then at the end of that year, we're gonna look to buy a house. I don't know where we get that formula from. It's just kind of like, I guess, tried and true. And so it's what people do. And so I, so they got

Starting point is 00:06:13 married in October. I, I, um, they were referred to me by a friend, uh, to have a conversation about when they will be ready to buy. Um, and this was in February, we started having a conversation. I said, well, why, why are you waiting a year? They're like, I don't know. It's just something that, you know, we, I don't know. We just decided to do that. It's like, okay, well, after having a conversation with, I said, can I just show you something? You want lower interest rates and you want a great price. Can I show you something that may fit that? And they go, well, yeah. Well, I ended up showing them new construction. I ended up taking them to a new construction development that was in a closeout sale. They found a house that fits exactly what they would have been looking for a year from now. However, the house

Starting point is 00:07:07 was priced at $605,000, but because that was that closeout weekend, we were able to lock it in at $540,000. And instead of them locking in at a 7% interest rate, which is where interest rates are right now, they got locked in at a 5.99% interest rate. And the builder gave them $20,000 towards closing costs and also threw in the washer and dryer. They were like, did we just steal this house? I'm like, yes, you did. And you came in with $80,000 worth of equity, $60,000 worth of equity plus the 20,000 that they gave them in closing costs. So it doesn't, you don't have to wait. There's a way that we can kind of make it happen sooner than later. And I think that's what, that's why it's important to

Starting point is 00:07:54 talk to a real estate advisor. So question piggybacking off of that as well. So let's say someone is locked into a rent somewhere in an apartment or they're renting a house and they're like, okay, my lease is up in September. I want to move by September. I want to have a house to move into. How early, if someone is stuck on a certain time constraint, given that reason or a number of factors, how early should people start the search process in order to kind of meet that timeline that they have for themselves?

Starting point is 00:08:26 I love that you asked that question because that was one of the things that was holding the back. One of the biggest reasons why they were deciding to wait for a year because they just signed a 12 month lease. And I said, well, how much is your rent? And they said, our rent is $2,500 a month. I said, well, check your lease to see what your early termination clause is. And they said, yeah, we looked at it and we would have to pay two months in advance. I said, okay, that's $5,000. And they're like, yeah. So, you know, I don't know that we want to pay that. And I said, well, think about it this way. One thing, the first thing is what if I can get the seller to pay that as a credit towards you and you don't have to pay it out of your pocket anyway,

Starting point is 00:09:01 they basically reimburse you for it. Like if I can help, if I can at least get you $5,000 towards your closing costs, that helps to offset that, right? Well, in that example, I got them $20,000. But I said, is it worth it for you to hold onto a lease so that you don't have to break the lease for $5,000 or stay in the lease, pay $2,500 for the next 10 months and pay $25,000 just so you did not have to break a $5,000 lease. Which one would you rather do? Yeah. And they were able to do quick math and go, all right, let's go talk. And so we had the conversation, showed them a few homes and got them what they were looking for. Oh, so good. Yeah. Such a good new perspective there. You have to, you have to look at your budget. I'm not saying buy more than you can afford.

Starting point is 00:09:47 Right. Right. Are the monthly payments comfortable regardless at the, you know, people get caught up on these interest rates, but like when you buy a car, most people aren't haggling about the interest rates. When you buy a car, what do people care about the monthly payment? Which is why when you go buy a car, they'll stretch it out five, six, seven. I think they go all the way almost to eight years now, right? It's like, how long can I lease it? Or how long can I stretch this financing out for so that I can bring the payments down to a manageable amount? Okay, cool. Because why? Because I'm probably not going to keep the car that long anyway. Well, it's the same thing with the house. If you're getting a

Starting point is 00:10:20 30-year mortgage, are you going to stay in your first home for the next 30 years? Probably not. And so we have to kind of change the way we're thinking about it and still be, still be money wise, but also understand that money wise might be a little bit different than what you think is wisdom right now. Yeah. So besides budget, what are some other things that first-time homebuyers can consider when it comes to purchasing their first home? I know location is a factor. Is there a resale value down the road? Do I potentially want to turn this into a rental property down the road as well? Size is a whole nother thing. Safety, school. So how do we ensure we're kind of like checking our own boxes and making sure we're finding the best property for a given time? And again, to your point, we're not going to stay there probably for 30 years, but how long should we kind of think about

Starting point is 00:11:15 being in that home for essentially for a first home? And what are some of those considerations? Great question. So a lot of what you'll see, at least especially in Florida, well, nationally, what we've seen is people are typically staying in their home anywhere from about six to seven years. It was five to seven years. I think that has shifted a little bit now. They're expecting more like seven to 10 years just because so many people locked in at lower interest rates in the last three years, right. When interest rates hit rock bottom, they went all the way down to, I know somebody who locked in at a 1.99% interest rate,

Starting point is 00:11:49 like they're never going to sell that house, you know? So there's a lot of people who are in that position. A lot of homeowners who've said, I'm just never going to sell that house. And so they're, they're probably staying a little bit longer, but on average, let's just say five to seven years is when most people are staying. So when, when you're looking at a home, um, there's all these different, you mentioned some of them, but even like family size, are we going to, are we planning to start a family in the next

Starting point is 00:12:15 few years? Are we not, do we already have kids? So our school zones, something that's important to us right now or not. So you really have to look at when I, when I speak with a, with a buyer, especially first time home buyer, I'm always asking like, what about your personality profile? Do we need to consider? What about your lifestyle profile? Do we need to consider your work profile? Do we need to consider, you know, if you're the type of person that says, yeah, I really don't like the hustle and bustle. I get a lot of people who say, I like to be out. I want to be where of the downtown Orlando area, which is also going to give you a more probably favorable price. But if somebody is like, hey, I can't be I had a doctor who recently purchased with me and they could he's a he's ER doctor. And so for him, he can't be more than 30 minutes away from Orlando Regional, which is downtown Orlando. So that limited where we could actually help him to purchase.

Starting point is 00:13:29 Now, they weren't first-time homebuyers, but still, it still applies. There's a lot of people who are working from home right now, but then there's also a lot of people who were able to work from home who now have to report to the office three or four times a week. And so we have to look at those things and then we work within that parameter. It's not enough to say, what can I get for $250,000 or $350,000? And then I show you all of these other houses outside of the radius of where you're actually going. If it doesn't make sense, it doesn't make sense. So we're not going to try to fit a square peg into

Starting point is 00:14:00 a round hole. So yes, we look at personality profile, you know, do you like to go out and be still young and vibrant? Like I used to be go, go out to, to bars and all that stuff. If you still like that lifestyle, then you probably want to be a little bit closer to it. But if, if, if not, then we have, we have more options. Yeah, absolutely. I can't be more than 30 minutes away from a whole foods. So that's one of my parameters. Okay. We got you covered there. We got you covered. Some people even like an outdoor lifestyle.

Starting point is 00:14:32 You want to be close to the theme parks. You know, a lot of my clients, because of my Disney history, you know, I know a lot of people who love Disney, want to live close to Disney. And so I actually have a website called close to the magic.com, right? Close to the magic.com is where you're going to find new construction throughout central Florida. So if you're looking for new construction, you'd like to maybe examine some of the things that I was just talking about, how we can get you probably a promotional interest rate, you know,

Starting point is 00:15:01 money towards closing costs, appliance packages, all of that kind of stuff, close to the magic.com. And then you can just explore some of the different new construction options that are around. Amazing. That is so cool. And I know Cassie's probably looking that up right now because she always wants to be close to the magic over there. Yeah, of course. Well, okay. You talked about a little bit negotiating the purchase price in some terms of your first home. That can be really daunting for first-time homebuyers. What strategies can they kind of use to negotiate effectively, ensure that they're getting the best deal possible and ensure that they're setting themselves up for financial success when it comes to buying their first home? I think it's important to understand that getting the best deal does not

Starting point is 00:15:51 only apply to the price that you bought the home in, right? If you know that the price is, maybe it's undervalued for what it's actually worth, understanding what the seller, and this is where I come in, right? So if the seller's situation is that they have to sell, maybe they're being relocated, maybe someone passed or away, or maybe they've fallen in love and they're getting married and now it's time, right? And they have this timeframe that they're working in, then I can contact, contact you know the listing agent um and contact the seller's agent and find out what the situation is and that may give us some leverage for negotiation on that side of things right um maybe we're able to give them the price

Starting point is 00:16:40 that they want but what if we don't want to close in 30 days because you can't close for another 45 days? So maybe I can move the closing out. What if I'm talking to the seller and say, hey, we can give you that price, but we need to close in 45 or 60 days. Does that work? I've helped some people where they can't close for 60 days, but they also don't want, they kind of need to make it happen. The seller needs their money so that they can close and then move on to their next house. But the buyer needs 60 days. So what do we do? Well, we go under contract.

Starting point is 00:17:18 We go ahead and close in 30 days, but then the seller leases the house back from the buyers for another 30 days. That way, when we close, the seller gets their money. They can use that as their down payment for their new house. And then they're still living there for now. Maybe they're buying new construction or whatever else. They're living there for now. And they're just renting for one more month from the buyers who just now they own the house. And so now that they don't have, you know, the buyer doesn't have two monthly payments where they're like, okay, well, I didn't want to close too early because now I have to pay my mortgage and I have to pay my rent. There's ways to

Starting point is 00:17:53 alleviate that. You know, we look at the inspection period. The inspection period is something where that's your due diligence period where we send our preferred home inspector in to look to make sure you're not buying a limit. That's important. You know, make sure the things that are working in the house that are supposed to be working in the house and whatever's supposed to be included is actually included. So all of these little pieces are what decides, what determines whether you're getting a good deal or not. And at the end of the day, what we're trying to create is a win, win, win solution. We want the sellers to win. We want you to win. We also want the agents in the middle who are trying to make this deal happen to win as well. We don't want to pit the agents against each other

Starting point is 00:18:36 where they're like, well, they won't give me $3,000 more or I'm not going to do it. And that happens far too often because so many people get focused on the wrong thing. They get focused, I should say, singularly focused. They get focused on just one thing and not looking at a picture from a holistic perspective. And I try to bring that holistic perspective to the transaction. This process is a lot, right? It's very intimidating. It's very overwhelming.

Starting point is 00:19:04 My husband and I did it for the first time in October of 2021, a few years ago, and it was a lot, especially for a first timer. So I'm curious if you have any just overall wisdom, encouragement, or insight as we close out here, just how we can stay best informed and confident and ultimately not too emotional in the process, but just hoping we make the right decisions, right. And this whole process and just stay sane, I guess, throughout it. Yeah. Yeah. Great question. I would say, you know, to stay up on where interest rates are, you can go to bankrate.com. Bankrate is a very simple site. There they have mortgage calculators. Another site is NerdWallet. So Bankrate or NerdWallet, keep an eye on where

Starting point is 00:19:55 the mortgage rates are. They have mortgage payment calculators there, affordability calculators there. So what would my mortgage payment be if I bought a house this much and put this much down, such and such? Or if I only have this much, how much would that allow me to afford? Go to, again, closetothemagic.com. Like I said, that's where you'll find a lot of new construction in the area and just see what new builders are there because these builders are what's helping with the housing supply right now. As you know, one of the reasons why prices have been shooting up is because there hasn't been a lot of homes for sale. And so we're kind of relying on new construction to come into the market to help with, to alleviate this problem that we're having so that prices won't shoot up as fast as they have been going up. And so that's a good thing. And that's a, that creates an opportunity for you. You know, tying in with a local real

Starting point is 00:20:50 estate advisor is always good because maybe they can even send you or connect you with a monthly market report. So I have some clients where I send them, I send out a new, a weekly newsletter so they can be up on, it's a weekly newsletter that includes a blog. So there's a buyer section where I'm talking to home buyers. There's a seller section where I'm talking to, you know, to homeowners who might be looking to sell. And then it also showcases like a featured listing for the week. Right. And then they also even show some things to do, some fun things to do in Orlando. So, you know, that that's always available, but that's something that I do to just keep my, my friends and clients up on what's happening in the market. So if you can get with

Starting point is 00:21:28 a knowledgeable local real estate advisor and ask them questions, a good one should know what's going on and maybe just doing a monthly check-in. If you don't think that right now is the good time for you to purchase, then at least starting the conversation sooner than later and establishing the relationship I think is very key. Because one of the best things that I have going right now, and again, your listeners, if they have a good real estate advisor, is off-market properties. I'm always talking to homeowners who are like, yeah, for the right price, I would sell my house. I'm always talking to homeowners who are like, yeah, for the right price, I would sell my house. I'm like, well, what's the right price? And then if I have like, you know, I have this VIP list of buyers. I'm like, hey,

Starting point is 00:22:16 I know somebody who might be willing to buy their house, you know, sell their house in the area that you're considering for this much. Would you like, would you be interested? Like, heck yeah, I'd be interested. So sometimes I'm able to put deals like that together where I'm not just waiting for it to hit Zillow or homes.com. I'm like talking to the source, you know, and, and bringing that to people. So, so staying in touch with what's happening off market, but also staying in touch with what's happening, you know, locally and nationally is always important. Staying informed, staying up to date with what is going on in the real estate market is truly important. And doing that through your connection with a local realtor is great. We'll link out all of those resources that you listed to in the show notes so that our listeners can access them and, you know, start to learn more about the process and hopefully dive in soon. But we want to make sure that everybody can find you, follow along with what you're up to.

Starting point is 00:23:04 So where are you at online? Where can we find you on social and things like that? In case anybody's in the Orlando area that wants to buy. Yeah. So if you're looking to either buy or sell or rent or invest in the central Florida market, please reach out to me. You can follow me on Instagram. It's probably the easiest way to find me. I'm the Mike Collier. That's it. T H E Mike Collier. Every time I say the Mike Collier, people are like, was that V or was that B Mike? No, it's the Mike Collier. Maybe that's easier. Right. And so I'm the Mike Collier on all different social platforms. I also have a channel on YouTube that I'm going to be relaunching.

Starting point is 00:23:51 I'm doing a lot of YouTube shorts right now, but we're going to go into long form and really talk about the lifestyle, how to live better and experience better throughout central Florida. So highlighting, you know, local businesses and interacting with them, you know, highlighting the top five skiable lakes in central Florida and all the, you know, top beaches, all that. And then also hitting some of their real estate, touring some of the nicer homes that are here in this area. And so that's living in Orlando, Florida with Mike Collier. That's, that's the name of that channel living in Orlando, Florida. There are a few channels that are called Living in Orlando, Florida or Living in Orlando. So I think if you put Living in Orlando, Florida and then put Mike Collier in there, it should pop up. But go ahead and subscribe to that channel. I'd surely appreciate that because we're going to be relaunching here

Starting point is 00:24:37 pretty soon. And I'd love for you guys to stay up to date on what's happening and show some love to the channel. That's so great. And so smart to to do that, because I know a lot of people will, you know, first get attracted towards what you're doing in the real estate market through something like a YouTube channel where they're just like, looking at the aspirational world of being close to the theme parks and all of that good stuff. So super smart. Kudos to you for that. Thank you. Thank you. And if you send me a message on Instagram, if you message me the word guide, G-U-I-D-E, just message me the word guide and I'll send you a absolute free, no obligation home buying guide. I actually update this home

Starting point is 00:25:20 buying guide every quarter. So I have a spring edition, a fall edition, a summer edition, and it can keep you up to date with what's going on, even nationally. It's not just about the Florida real estate market. So that's anywhere. The brokerage that I'm with has, we have agents in all 50 states throughout the US. And so if you are looking for a real estate agent in your area, even if you're not moving to Florida or have a home to sell in Florida, I may be able to refer you to a great real estate agent in that area so that you can take advantage of the same things that we've been talking about on this episode. Amazing. Well, thank you so much, Mike. I'm going to definitely shoot you a DM after this and grab that guide from you. But thank you for joining us again and for passing along your knowledge

Starting point is 00:26:03 to our listeners. We really appreciate it. I appreciate you. Thanks. And this was a lot of fun. I appreciate you having me on. Thank you so much for listening to this episode of the Marketing Happy Hour podcast. If you enjoyed this episode, please remember to subscribe, rate, and leave a review on your favorite podcast platform. If you want more of Marketing Happy Hour but don't know where to start, we invite you to

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Marketing Happy Hour - The Millennial + Gen Z Home Buying Guide | Real Estate Advisor Mike Collier

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