HGTV is amazing to watch, but does it set buyers up with unrealistic expectations?
HGTV paints a lovely picture for the future home buyers and sellers of today. Most millennial consumers have this idea of a picture perfect buying/selling process that is completely unrealistic. Real estate can be messy and complicated. Why? Because all the biggest things in life tend to be the hardest things we overcome. I came across this idea of writing this article when I had HGTV on in the background as I was on the phone with clients, both first time home buyers. Answering questions about how this process is going to look and the steps moving forward. I am the industry expert but some of the questions that were being asked were as if they had been watching the same shows I was watching. So let me clear a few things up when buying a home in “non-HGTV LAND”.
I decided to reach out to a few people, industry experts, first time home buyers, as well as soon to be homebuyers. I asked them all the same question:
What do you wish you had known, or wish your clients had known before purchasing a home? What are/were some misconceptions?
Each person brought up a few different topics that pertain to their current situation or for my industry experts, things they see all the time. It is interesting how we all seem to say the same things. Ironic?
Finding a Realtor – The Right Realtor
My friend from college, who is new in this process of purchasing her first home reached out to me via Instagram. She lives in Indianapolis, Indiana where the market is booming and fast-paced in her price range. We have been discussing a short sale that she was getting into when we had this conversation.
“I wish I knew a better understanding of the buying process. I knew it took time, but no idea on how much time. What was tricky was finding a Realtor that took me seriously as a buyer. I think it took me a week to find someone who listened to what I was looking for…
There were at least 3 other people I looked with who never followed up, didn’t seem to care, and rushed me through my time slot which was frustrating. I don’t know if it’s because I’m a small female, or if they thought I was too young or what but it blew my mind.” – @jemapellenugget
This blows my mind as well. We as Realtors tend to JUMP on the next lead when we can so to hear this upset me. HGTV shows like “House Hunters” make the process look like a piece of cake. One day, three showings and “you have bought a house”. That is not reality. It can take a lot of showings, a few denied offers, and multiple sleepless nights until you walk into the right home.
Your Realtor should be your anchor through this chaos. They should prep you for how aggressive or passive you can be with offers. As I have stated before, my goal is building relationships with clients. This means listening and making what the client wants and needs a reality. But here is the kicker…we also have to be honest with our clients. If they have unrealistic expectations, it is first and foremost our job to correct those expectations.
I asked my most recent first-time buyer client this same question. We just closed on her first home last week. We met because she was a renter, but after asking a few questions, we got her qualified and into a home, only of course after a few curve balls. She had this to say about the Pre-Approval process, that is DEFINITELY not on any HGTV shows I have seen.
“Scrutiny during the approval process [was] like being stripped down, cavity searched and firehosed in public (my perception). – MR
I had to laugh at how that was put but I can’t say she is wrong in feeling that way. Lenders ask a lot of you to make sure you are qualified to buy. What I see a lot of HGTV is the ads for “Rocket Mortgage”. You can get pre-approved all in a matter of eight minutes or less which sets buyers up to think that buying a home is a “clickable” process. That through a few apps and a few clicks, POOF you buy a home.
The problem with all of this is that it makes buyers think that it this is not the way it is “suppose” to go but I promise there is a reason for all of the scrutiny. Lenders ask for A, B, C, D, & E documents because they want to make sure you are ACTUALLY qualified to purchase a home. If they don’t ask for a lot, there is something wrong with the situation.
Budget & Down Payment
The next person I spoke to was my best friend from childhood. She and her boyfriend are looking into buying a home sometime next year in the Lexington, Kentucky area. The whole process is “intimidating” she said to me over the phone. “Where do I even begin?” (I hope at this point you, the reader, can see a pattern). When I asked her to contribute to this article these were the biggest takeaways in our discussions and discussions with others.
“Just because blogs and people on social media say you sould put 20% down doesn’t mean you actually have to. There are plenty of other options for average people like myself and others.
Just because the average house in the area you want to move to is $250,000, does NOT mean that is what you can afford.” – AG
Understanding your budget is HUGE. I think that this is one of the biggest flaws in how HGTV presents their shows. The commentator talks about their budget, but how did they get that number? What does it mean to have a $300,000 budget as a monthly payment? Speaking in such large numbers confuses a lot of buyers. What is the breakdown of that payment per month and more importantly are you comfortable spending that much per month on housing?
P.I.T.I (how your monthly mortgage payment is broken down)
Principle (money towards the house) + Interest (extra money bank charges to lend you the money) + Taxes + Insurance (homeowners insurance).
Your down payment plays into this by adding PMI (Private mortgage insurance) if you do not put 20% down. Trust me, at this point, you are thinking…MORE CRAP ADDED TO MY PAYMENT? I get it. But the best thing is that PMI is the reason we, as first time home buyers, can put little money down. Meaning there are so many programs out there that allow you to put 3.5% down or 5% down and you get to BUY A HOUSE. This is very important as a millennial buyer. 9 out of 10 millennial buyers have student loans and car payments and entry-level jobs so saving money can be tricky. That is where a good loan officer comes into play.
Loan Officers. Who are they and how do I know they are the right one?
This one is simple. Talk to others that have recently gone through the home buying process. And if you don’t know anyone that has, then talk to your Realtor. A lot of people seek out Realtors first, which is perfectly fine but there are a few basic things that need to be done FIRST before we can go “house hunting”.
“Get Pre-approved before you NEED to move. That gives you more time to develop a plan to get the best loan to fit your budget [and] your credit score on Credit Karma and other monitoring agencies is different than the FICO score we pull.” – Bianca Stone, Guarenteed Rate
Your loan officer is going to be your point of contact from start to finish in this process and they work closely with your Realtor. I mentioned Rocket Mortgage earlier in the article and they are a PRIME example of a company that is hard to work with, from a Realtor’s perspective. The buyer gets bounced around from person to person as the transaction moves along. You want someone that will explain all aspects of the preapproval process and helps you understand one of the biggest purchases in your life.
The last thing HGTV doesn’t tell you is how it works when you put in an offer. “We like it. We will buy it!” Poof, we magically buy a house. I asked another Realtor what they thought was one of the biggest misconceptions was and I got:
“Putting in an offer on a home is not just a call to your agent. You have to fill out a contract and sign it. [And] the sellers don’t have a required time limmit to respond.” –Alissa Roy, Keller Williams Platinum Partners
HGTV makes us, as Realtors, set the tone so that these kinds of things do not happen. I think the biggest of all is setting a CLEAR tone for how this process goes, on a normal day. There are always things that happen that we cannot foresee of course. We are constantly on our toes because of the continuous misconceptions we hear that stem from HGTV.
If I could give you ANY advice that you would actually take away from this article it would be to ASK QUESTIONS! Our job is to make this process easier and more understandable for YOU! SO ask the questions. This article’s purpose is to make you aware that you are not alone. HGTV has taken over the housing industry in WONDERFUL ways but also sets unrealistic expectations. So ask the questions.