Loading summary
Transcript1 lines
- [00:00]
A
On this episode of the personal Finance Podcast, how to buy a house the right way in 2026. What's up everybody and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney Co and today on the personal finance podcast we're going to be talking about how to buy a house the right way in 20. If you guys have any questions, make sure you join the Master Money newsletter by going to MasterMoney Co newsletter. And don't forget to follow us on Apple Podcasts, Spotify, YouTube or whatever podcast player you love listening to this podcast on. And if you want to help out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify or your favorite podcast player. Now in today's episode we are going to be talking about how to buy a house in 2026. Now, now this is one of those episodes that is a staple that we want to make sure that we are doing every single year because the market is shifting, the market is changing and I'm going to give you the exact steps that you need to take if your big goal is to make sure that you want to buy a house in 2026. And so in this episode we are going to walk you through the steps of hey, how do I run the numbers up front and how do I understand if a house is even in the cards? What do I do when I'm ready to go out and buy a house? How do I think about the pre approval process? How much house can I actually aff? Then we're going to walk you through the steps, the exact steps to take in order to make sure you can get a house at the best deal. I'm going to give you all the options and negotiation tips that I have that are going to help you buy a house. And in addition, this is going to be one of those areas where we're also going to talk through insurance. We're going to talk through making sure that you don't make big mistakes that are going to cost you a lot of money and how to get your finances in order before and after you buy a house. So this is an action packed episode and I can't wait to share with you. So for those of you out there that are like, well, what is Andrew's qualification to even talk about this? Well, if you don't know this already, I have bought and sold millions and millions of dollars worth of real estate. And in fact, when I was investing heavily into rental properties, I went out and got my real estate license. And so I bought tons of different properties. I've gone through this process dozens and dozens and dozens of times. But in addition, when I had that license, I would help family and friends go and buy houses. So I've done this over and over again for myself. I've done it in my businesses and I've done it for family and friends. And I have seen time and time again the classic mistakes being made when your agent doesn't actually understand what needs to be done. They don't understand the financial side and what your dreams and what your goals are. And so we're going to dive into those dreams and goals and we're going to talk through the steps to take in order to buy a house right in 2026. Way too many people out there make mistakes when it comes to buying houses. I'm going to make sure you avoid those mistakes. And if you are not buying a house this year, but you plan on buying a house at some point in time, these principles are going to apply in the future as well. So without further ado, let's get into it so you just realized your business needed to hire someone yesterday. So how do you find amazing candidates fast? It's easy. You just use Indeed. When it comes to hiring, Indeed is all you need. Stop struggling to get your job post seen on other job sites. Indeed's sponsored jobs help you stand out and hire fast. Your post jumps to the top of the page for the most relevant candidates so you reach the right people faster and it makes a huge difference. According to Indeed data, sponsored jobs posted directly on indeed get 45% more applications than non sponsored jobs. There are no monthly subscriptions, no long term contracts, and you only pay for results. In fact, while I've been reading this ad, 23 hires were made on Indeed Worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit. To boost your post visibility@ Indeed.com personal finance, just go to Indeed.com personal finance and support this show by letting them know you heard it here. Terms and conditions apply. Hiring Indeed is all you need. So you've heard me talk about BILT as the loyalty program that allows you to earn points on rent wherever you live. And they just leveled up even more. As of 2026, homeowners can also earn up to 1.25x points on their mortgage payments. This is thanks to Bilt's three new credit cards, the Palladium card, the Obsidian card, and the Blue card. All three can turn your housing payments, rent or mortgage into flexible rewards. So you can choose the card that fits your lifestyle without missing out on points. And exclusive benefits and built points. They can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments and more. And bill points have also been ranked by top publications as the industry's most valuable point currency. Your housing payment is already your biggest expense. Make it your most rewarding. Find the card that fits your lifestyle and apply today at joinbuilt.compfp that's J O I N B I L T.compfp and make sure to use our URL so they know we sent you. Terms and limitations apply subject to approval and eligibility. Built cards are issued by column in a member FDIC pursuant to license from MasterCard International Incorporated. So step one is we are going to dive into the most important thing that you must do before you buy a house. And I would venture to say that maybe 1% of people if that do this before they buy a house. I do not know a single person in my life until I taught them this, who has ever done this, okay? And so this is something I think really needs to be the core foundational thing that you do before you even consider buying a house. And that is running the numbers. See, most people out there, they go out and they make the biggest purchase of their life, which is buying their home. And they make this purchase without running the numbers. It is one of the most crazy things that people do. In fact, this should be a requirement for a lot of people out there before you go and buy a house. What do I mean by running the numbers? You need to understand what total cost of ownership is going to be. And so you need to understand how much house you can afford and you need to do a buy verse rent calculation for your specific area. Now, in a lot of places across the country, buying a house may make less sense than renting your house. But you need to know how to run the number numbers. What do I mean by that? Well, once you start to look at houses, what you're going to realize is I got to understand, well, how much is the maintenance going to be, how much is the mortgage going to be, how much is the insurance going to be, what are the taxes going to be and how much is it going to be to have to repair this house every single year? And so you need to understand all of those different areas and then compare that to renting a property. So when you look at this and you think through, okay, well, well, if I Rent a property, how much is this going to cost and is it going to lower my overall cost? And so the buy versus rent calculation is a very important calculation most people need to do. And if you don't do this calculation before even starting this process, you are really doing yourself a huge disservice. Now, I have had people say over and over, over again, no, no, no, it's always good to buy a house. The housing market always goes up every single year. And that is absolutely not the case. You need to do the math. And if you are arguing that you don't need to do the math or run the numbers to be able to understand if it's a good financial decision, I don't know what to tell you. This is one of those areas that is black and white. You need to run the numbers before you buy a house. I am a homeowner. I am someone who has owned a home for over 13 years. I bought my first house when I was 25 years old. And when I bought my first house, it was the best decision I've ever made. At that time, houses were a lot cheaper than they are now. But at the same time, this is one of those things that if you learn to run the numbers upfront, I can guarantee you're going to find out real quick if buying a house makes sense in your area. Now you may be saying to yourself, well, how do I figure out how to run these numbers? I got you, my friends, you know, your boy has gotcha. And so down below, we're going to link it up. It's called the Total Cost of ownership calculator. The Total Cost of ownership calculator is a step by step little spreadsheet that we created for you all in order for you to be able to run the numbers on your home and understand what is happening here. And so this is where when we run total cost of ownership, we want to make sure that we understand the difference between buying versus rent. And so you're going to see all these different costs. I lay it out on that spreadsheet in steps and when I have those steps in place, you're going to be able to see exactly where this lands. So download the Total cost of ownership calculator down below if you haven't already. But if you've never run the numbers or even looked at this stuff, it is good just to even see the steps that you need to take in order to understand how much a house is going to cost. Now, we're going to talk about a lot of those costs here. Today as we go through this. But I just want you to have an understanding. There's things like closing costs when you buy a house. There are all these other areas that people do not consider and you also have to consider the opportunity cost difference. So step two, and this is a big one for a lot of folks out there, is once you run total cost of ownership and you decide, okay, I'm ready to go out and at least start looking at houses. And I want to make sure that I can go and decide if I want to make a purchase on a house that is out there, then I want you to go ahead and get pre qualified. So getting pre qualified means that you go to mortgage lending companies and you give them your information. And when you give them their information, they say, hey, you are approved or you are pre approved for, for a loan of this amount. So typically when you do this, they send you a little folder and you gather all your basic financial information. So your income, your employment details, all those different things. And what I would recommend is looking into or figuring out what the rates are with different mortgage lenders. Call up two or three or four of them and figure out if one of them has better rates, that may be the best option to go with. And what they're going to do is they're going to take high level financial details from you, they're going to take that information and you're going to receive an estimated loan amount of what you can actually borrow. Now use this number as a starting point. But guess what? Typically you are going to get pre approved for a lot more than you should be taken out. And so a lot of times people will say, oh my goodness, I just got Pre approved for $700,000. This is amazing. I can go buy a $700,000 house. No, this is the big problem that I see in the real estate industry right now is there are agents out there who are telling their buyers that, guess what, since you were approved for this, you could go out and buy this much house. You need to look at your personal finance goals and you need to look at your financial situation. But there's also rules in place that we have here to make sure that you are not house poor. Because the last thing I want for you is to buy too much house and it's 45% of your income. And then all of the sudden you are giving all of your money to your housing and you literally can't do anything else. I've seen way too many people fall into this trap if you do this. If you buy More house than you can actually afford. You just bought yourself a financial prison. It is going to be one of the most stressful things that you ever do in your entire life if you buy too much house. And so when you think about this, you want to make sure that you have the number in place and understand what you have. And we're going to talk about your finances here next. All right, so next, we want to map out your budget and your finances. Now, we have some rules before you buy a house of some things that you need to make sure that you are accomplishing. And these rules are things that are going to help protect you, especially if financial freedom is your goal. Financial independence is what a lot of folks listening to this podcast are trying to achieve or have achieved. And so if that is part of your goal, you want to make sure that the numbers fall in to line. So I'm going to give you first the most important one, which is to make sure that your housing costs are 30% or less of your income. Now, this is one of those areas that a lot of people are like, well, is it 30% or less of just my mortgage, or is it all of my housing costs? No, this is going to be all of your housing costs need to be 30% or less of your income. And so when you're running the numbers, you need to think about, hey, what is the insurance, what are the taxes, what are the maintenance, what is my mortgage, what is the interest? What is all of this stuff going to be costing me? It needs to be 30% or less. And if anybody out there listening to this podcast right now, let's say, for example, that their housing costs are 38% of their income, I can guarantee a couple of different things. One, either you are financially stressed, you may be arguing with your spouse about money, and a lot of times you're arguing about these small little purchases. Maybe your spouse goes to Starbucks, gets a coffee every single day, and you start arguing about that specific purchase. But instead, what's really happening is the big picture is that your housing is eating away at all the. Your extra money. You don't have extra money because of the, the roof over your head. And so because of this, I want you to make sure that you are keeping your housing cost below 30% of your income. Now, for those pursuing fire, pursuing financial independence, I want you to keep it even less. If you can keep it 25% or 20%, you're going to have a much better chance of increasing your savings rate, which, as we know, is going to accelerate your Path to financial independence. Housing is the number one cost for most people in this country. And controlling this cost is a very, very important thing to do with your finances. I know you want the kitchen with the grandiose marble. I know you want the fully renovated bathroom. I know you want to make sure that you have enough bedrooms so that every person in your entire family can come and visit you. But this is one of those things that financial discipline really has to come into play because if you make a mistake here, you have an illiquid asset that you're going to have to figure how to sell at some point in time. I'm being blunt up front to give you that wake up call so you understand do not make the mistake when you run your numbers of buying too much house. Okay, so when you do this, that is, number one is making sure your housing costs are below 30% of your income. Number two is you need a fully funded emergency fund. Because guess what, when you take on a house, you need to have at least six months of expenses saved up. If you lose your job, how's your mortgage going to get paid for 6 months? How are your housing expenses going to get paid? What's going to happen if your water heater breaks? Do you know how expensive it is to replace a water heater? Do you know how expensive it is to replace an AC unit if that goes out or your heater goes out? Do you know how expensive it is to replace pretty much anything in your house anymore? The costs have risen dramatically on building materials. And so due to this, we want to make sure that we have a six month emergency fund in place. Because if you were to lose your job or if something were to happen, or if your roof needed a repair, guess what? You got to have the cash on hand because now it's on you. You're not renting anymore. It is completely on you. In addition, your credit score needs to be in a pretty good spot before you buy a house. Why? Because the interest rate is going to matter. Let's say you take out a 30 year loan. Just a 1% difference in that interest rate can cost you over $100,000 depending on how much that house costs. And so you want to make sure that your credit score is in a good spot for most people. I would really say everybody listening to this podcast, every single wealth builder here, needs to make it a goal to get a credit score above 700. If you're like in the 650 range, you probably can get an okay interest rate. But I really want everybody to Strive for a better credit score. Now you may be listening to this right now and you're like, I have a 450 credit score. Well, guess what? Work on building that up. You can build it back up and get to a point in time where you can get that better interest rate. The last thing I want for you is to give a lot of your hard earned dollars away to interest. We want to make sure that we are thinking about this. And so building back up that credit score can be very, very important. Also, any high interest debt that you have, if you have credit card debt or you have a personal loan, that's high interest, or you have any other high interest debt, this is usually outside of things like student loans. But if you have high interest debt, we need to get rid of that before we buy a house. You do not want to have additional debt weighing you down. And then you also have to make sure that you can cover your mortgage every single month. This is one of those areas again, that needs to be covered before you buy a house. You got to have the financial house secure, you got to have your own financial life secured before you get the ball rolling. And so this is a very important place that we need to think through. Okay, now let's talk about down payments for a second because there are a lot of different options out there for down payments. When you go get pre approved, we can think through. Okay, well I can go. If it's my first time buying a house, you can get an FHA loan. An FHA loan means you put three and a half percent down and all of a sudden you can go out and buy a house with 3 1/2% down. As long as you can afford those monthly payments. If it's your first time buying a house, I have no issues whatsoever with you putting less than 20% down. Now a lot of other financial gurus out there are going to say now you need to put 20% down every single time. I don't have an issue with you doing that because guess what, with my first house, I didn't put 20% down. I put less than that down. Originally I put 10% down on my first house. And so this was one of those areas where it wasn't that big of a deal for me. And so if it's your first time buying a house, it's not that big of a deal. Now if this is your second house, if you are buying your second house overall, I want you to have 20 down. Why? Because you have the power to roll that equity from your first house. Into the second house. And if you're listening to this at the time I'm recording it, I know you got equity in your house. And so you're rolling that equity into your second house to make sure that you get that 20% down payment. Why? Because when you put 20% down, you avoid PMI. That's a big deal. But also there are just other things that are going to help, including making sure that you pay less in interest. That's the big thing we want to make sure that we are doing when we are rolling that in. Now, if you're buying a house and you are buying a house way below your means and you're like, listen, Andrew, even if I buy this house and I don't put 20% down, I am going to be able to pay this off pretty quickly, or in addition, my mortgage is going to be like 20% of my income, then okay, that's completely fine. And I understand that scenario. So that is one of the caveats that we could talk through. But outside of that, if it is something where it is, you're on a fine line where you are getting close to that 30% number, then we need to make sure that we are putting that 20% down in order to, to ensure that we are getting rid of that PMI insurance. Okay, so those are just some of the rules and some of the parameters that I want to set up in place here in step three to make sure that we are on the same page. So everybody got that? We are going to make sure that no matter what loan you choose, you may be able to get a VA loan because you are a veteran and put 0% down. That's fantastic. You may want to get a FHA loan, maybe you want to get a traditional loan, but you want to put less than 20% down because your first home purchase, that is fine. Talk to your lender, ask what loan options are out there, making sure you're having conversations with them. Don't just take the first loan they give you and do your own research on what loans are available. Now, we can do an entire episode just on what loans are available out there and the pros and cons to each and every single one. If you want us to do that, comment below on YouTube or Spotify and let me know. We could do an episode on that, kind of comparing some of these different loans. But overall, I just want you to understand and make sure that you are doing your homework when it comes to how much you are putting down. Okay? So that is the big key and that is the big way I want you to think about this. So step four is we are going to be planning our search criteria, meaning before we start looking at houses. You've noticed we haven't started going to the open houses yet. We haven't really started touring around yet. Maybe you're looking around on realtor.com and you're saying to yourself, well, this is, this one looks nice or this one looks pretty cool. But we haven't started to tour around yet. And the reason for that is because we haven't set our criteria in our plan. Now what I want you to do is I want you to put together a plan called My house hunting plan. You can write it down on a piece of paper, pull out the old fashioned Google Doc if you want to pull out a spreadsheet. If you're a spreadsheet nerd, pull that as well. Or if you just want to use a note on your phone. And if you and your spouse are looking at houses, I want you to do this together. I want you to have a conversation about this. Go to lunch, make this enjoyable. Make this a conversation that you were going to have about your home buying plan. When you do this, I want you to think about a couple of different things. One, what size home do you want? What size home do you need? And is it within your affordable range? Because what I don't want you to do is buy a house and then three years down the line you decide, actually, I'm going to move to another house. No, we really. When you buy a house, you want to make sure that you're going to stay there for about 10 years or longer. Why? Because newsflash, houses do not go up forever. And let's say, for example, you buy a house and three years in, all of a sudden the market takes a shift and it takes a dive. Now when the market takes a dive, it will eventually recover, but it is a very long cycle. And I want you to look back at 2007. What happened in 2007 was there was a lot of different economic factors including mortgage backed securities, where the housing market collapsed and most home prices collapse 50%. So imagine you bought a house for $500,000 and all of a sudden it's worth 250. You are underwater on that home. What does that mean? That means you're stuck there. You have to stay in that house. And so in order to make sure that there's enough time for recovery for that house, you need to plan on staying there for at least 10 years. If you're not planning on staying there for 10 years. I don't really recommend buying a house because overall that is going to be a much more difficult situation. Okay, so what size house do you want? Does it have enough bedrooms or bathrooms? Can you afford that? That is a big question that you need to have when you're running total cost of ownership. Two, what is the age of the home? Now? There are a lot of deals right now if you go and buy a new build. So for young families out there, new build communities are actually awesome as long as you find a builder who is not a scammer. And if you go out there and you find new build communities, you're going to be connecting with a lot of other folks who are your age who have young kids or have kids that are in a situation that is similar to yours and you're going to have some great amenities, you're going to have some great stuff where all of a sudden you make friends with your neighbors that are all around you. So new build communities are actually very, very cool. Now, some people don't like the esthetics, some people don't like the hoas that a lot of times will come with new build communities. If that's you, then it's not for you. But for those of you out there who are looking for something that could get you a deal, and we'll talk about the deal with this in a second and. Or if you're looking for something that could help improve your lifestyle, the new build communities could be for you. A lot of new build communities are offering a couple of different things. One is you can find some of these where you can reduce the overall total cost of ownership. Why? Because they will either offer buyback credits, like credits to you where you can renovate the property in different ways that make sense for you. Two, they will offer points buy downs, meaning they will offer buybacks where they will buy down your interest rate for a certain period of time. Sometimes you can negotiate in for a long period of time, which is what I would do. We'll talk more about interest rate buy downs in a second. But also sometimes they'll do it for the first couple of years. So if interest rates are high, when you're listening to this and you say to yourself, okay, well the interest rate right now is 7%, but this company will buy down my rate down to 3% or 3.99% is what I've seen a lot as of late. Well, that's a fantastic deal because you're saving yourself thousands of dollars every single year. Just by doing that, when you understand total cost of ownership, you're gonna see a big shift in how much impact this actually has. And so I would recommend you looking at new build. And if you don't like new build, you don't like hoas, you don't like to listen to kids, and you want to say, you want to tell kids to get off your lawn all the time, then it's probably not the best option for you. But if you are a young person who is trying to evaluate, should I buy an existing home that probably already has problems or a new build, as long as it's a reputable builder, you need to do your research on the builder and understand and get some recommendations from, from them. Call those families who have actually built with them. Those are all big, big deals. But just making sure you understand that you can get a deal. And a lot of times you can make the house and customize it the way you want. And it's a pretty interesting proposition. So those are going to be some of the things that you can look at next is will it need work? Will it need renovation? So my favorite way in the first house we bought, we bought a house that needed cosmetic renovation. This is a way, and I've talked about this in our previous episode on how to Buy a House. I think the last time I did an episode on this was in 2020 or 2021. But if you go back and look, I talk about this, I used to look for houses that needed cosmetic upgrades. And so the house we bought, for example, the kitchen was painted purple. The kitchen was painted purple. Now is that a trend in 2026? I don't know, but it was painted purple back when that was not a train. The bathrooms had pink tile, which I hear is a Trend now in 2026. But back then it was not. The bathrooms had old fashioned pink tile from the 70s, the living room was carpeted, the master bedroom was old. All the doors were original doors from the 80s. This house was actually built in the 80s. So the original doors from the 80s, the tile was pink from the 80s. And so we had to renovate bathrooms, we had to renovate kitchens, we had to renovate floors, all these different things. But guess what? I didn't care because the house was such a good deal, because most buyers did not see the potential of this home. And I realized, okay, I'm going to run the numbers on this and I figure out, okay, how much do these renovations cost? Well, luckily I had a good idea of what renovations cost because I was flipping and buying rental properties. And so I had an understanding of at least what would happen here. And so I would go to Home Depot, I would go to Lowe's, I would go to floor and Decor and figure out what all the costs for the materials would be. Then I called up some different contractors and I said, what's the labor going to cost for you to install this stuff? And so we figured it all out and I realized this house is a grand slam of a deal. And I would do that over and over with a bunch of different houses to figure out which ones are the best Deal finally settled on the house, and before we moved in, what we did was we renovated that home and to make it our own. That way we don't have dust all over the place when we are in the house. We can just get in and move in. So this is one of those tips that I think if you have an eye for design or you have an eye for what you want, you absolutely can buy a house and renovate it cosmetically. Now, if it needs a new roof, honestly, just so you understand, roofs aren't that big of a deal. You can have a roofing contractor come in, take it off, and finish it in two days, and you can actually negotiate the price based on a roof needing to be done. And there's a lot of things that we could talk about when it comes to negotiation, but this is just thinking through, is that a deal breaker for you if the house needs renovation, or are you willing to take on that project? Now, the house needs to be a deal if you're going to need to do all this work to it. Okay, so that's the big thing. And then what are your deal breakers? Write down all your deal breakers when you have this conversation so that you know, okay, well, if it doesn't have a home office, are we actually going to buy this house? Yes or no? Because you work from home, Maybe it's a no. And so that's one of those areas where you want to make sure that you look at this. Or maybe you want to have more kids. And so you want to make sure you have enough bedrooms for each of your kids and each individual kid. You want to have a bedroom, that's a big deal breaker. Or maybe you want to put pool, or maybe you want to have a nice big backyard so your dogs can play. Or maybe you want to make sure that you are in a walkable community so that you can walk around town, go get your groceries if you need them, really quick, walk back so there's all these different deal breakers that could pertain to your personal goals. And so making sure you understand what those are is very, very important. Now, if you overestimate some of these deal breakers and you you're trying to build out the perfect house, I just want you to know right now, you're not going to find the perfect house ever. You're going to find houses that you like, but you're not going to find the perfect house. And so you want to make sure that you are not overly aggressive when it comes to this. So you've got your plan in place, you're pre approved, you've got your finances in order, you've run total cost of ownership upfront in terms of understanding, at least in your market, what total cost of ownership could be. We're going to run it for each and every single house we make an offer on too. But we just want to make sure that we understand how this works. Next, what is step five? Now it's time to begin looking at houses. And we're going to talk about that next. After the holiday chaos calmed down, I had a moment one morning, coffee in hand, kids still asleep, where I paused and thought, this is it. This is the life that we've been building. And then I felt something else too. The weight of protecting it. And that's where policy Genius comes in. PolicyGenius is the online marketplace that lets you compare quotes from top insurers side by side, completely for free. Their licensed team doesn't work on commission and they don't push you into a policy. They help you figure out what's best for your needs and your family. And they make the whole process easier, answering questions, handling the paperwork, and guiding you step by step so you can stop worrying about it. So start your year with clarity and peace of mind and plan the year knowing you've protected what you've built. And with Policygenius, real users have gotten 20 year $2 million policies for just $53 per month. So head to Policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com billion dollar investors don't typically park their cash in high yield savings accounts. Instead, they use one of the premier passive income strategies for institutional investors, which is private credit. Now the same passive income strategy is available to investors of all sizes, thanks to Fundrise Income Fund, which has more than $600 million invested in a 7.97 distribution rate. With traditional savings yields falling, it's no wonder private credit has grown to be a trillion dollar asset class in the last few years. So visit fundrise.compfp to invest in the Fundrise Income Fund in just minutes. The fund's total return in 2025 was 8%, and the average annual total return since inception is 7.8%. Past performance does not guarantee future results. Current distribution rate as of 123125 carefully consider the investment material before investing, including objectives, risks, charges and expenses. This and other information can be found at the Income Funds prospectus@fundrise.com Income this is a paid advertisement. You know what happens every new year? We start looking at our money and saying, how do I actually make progress this time? Whether it's paying down debt, saving for your emergency fund, or saving for a house, you need more than just a tracker. You need a plan. And that's where Monarch comes in. Monarch is the all in one personal finance tool that I use to actually move the needle. It shows where my money is going across every account, budget, investment and debt. And it helps me to redirect it towards my goals. And it's not just tracking. It gives me projections, timelines and visuals that show how close I am to financial freedom. I can even share it with my wife so we're on the same page with no additional cost. So set yourself up for financial success in 2026 with Monarch. Use code pfp@monarch.com for 50% off your first year. That's half off of monarch.com with code pfp finding a home is a lot like dating. You're not just swiping through options, you are looking for the one. And that's why I recommend realtor.com like any good matchmaker, they know where to look. When we were house hunting, I wanted to find something with a big backyard, a place that was great for kids and had a home office that we also use as a spare bedroom. And realtor.com made it easy to search for exactly what we needed and they helped us find a place that truly felt like home. It's my favorite app to shop for homes and it's also the Pro's most trusted app with over 500,000 new listings every single month. There's always something fresh to discover, whether you're upgrading, downsizing, or just daydreaming about your next move. So find your dream home and start searching now. Download the realtor.com app today, the Pro's most trusted app based on the August 2025 proprietary survey. Over 500K new listings every month based on average new for sale and rental listings from July 2004 to June 2025. Now, you may have noticed something. I still have not said hire an agent yet. And there's a reason for that. There's a reason for why we want to make sure that we do our homework on all these different things first. Because if you bring this stuff to an agent that you're talking to, then all of a sudden most of the homework is done. And so then you can have a conversation, an educated conversation with agents, whether you have a buyer's agent, which we'll talk about in a second, or whether you go out and decide, no, I'm going to go and look for some homes on my own. So here's a couple of options. Where you can start is if you don't have an agent that you want to work with currently, you can start going to things like open houses and you can start to attend those open houses and walk through some of these houses just to see what the price of these homes are, but also to see what the condition of these homes are. Now, typically open houses are run on renovated homes, but you can look for bank owned open houses, for example, which these are houses that have been foreclosed on. You can go find some deals out there and see if they actually are a deal. I haven't seen a lot of bank owned deals like they used to have back in the day. But this is still something where if you look at those bank owned open houses, you can see what a renovated home looks like, what a home that needs renovations look like. And then you can see either if there's a flipped home or some other home that's on the market in your area, you can go walk through those as well. But I highly recommend walking through a bunch of open houses, meeting agents, having conversations with them, and talking through just the market in general. This is going to help you become a more educated buyer, but also going to help you overall see if there is an agent that you want to have in your corner. Now, if you have someone you trust, who you want to be your buyer's agent, someone you've known for a long time, who you know is educated, who you know understands finance, but also understands the market, that is a great way to go right now. And I just talked to someone who is a home buying expert about this. I just had a conversation with them. They have a very large home buying podcast and I just had a conversation with them. They said, hey, there's about 1.2 million agents right now across the country and really there should only be about 300,000 of them. There's a lot of them that cycle through. And in fact, 87% of agents quit every single year, and a new influx of agents come in. And really, there are a lot of them that just are not educated enough on the market to understand what they need to be doing. And so this is one of those areas where I want you to make sure you have someone in your corner who can help you get creative. Because we're going to get creative when it comes to offers. We're going to get creative when the way that we think about buying houses. And so you need someone who is flexible and willing to get creative with you. So this is one of those areas that I just want you to think through. Hey, first, if you want to start looking at houses, you can start to go to open houses and meeting some agents. If you don't have someone in your corner. Now, if you do have someone that you know that you want to work with, then go for it. More power to you. You can work with whoever you want to work with. Just make sure they understand your parameters. And when you have that plan in place of how you want to buy a house, you have that plan, you hand it to them, and you have a conversation with them about this. Okay, so one of the questions that I had and I went and dove into the data on this was, well, let's think about incentives here for a second. What if you didn't hire a buyer's agent and you went to go look at different listings, and each time you wanted to go look at a listing, you actually called the seller's agent? Would they be more incentivized to help you get a deal because they get both sides of the commission, meaning they're gonna get the buyer's commission and the seller's commission, would that be an area where they'd be more incentivized? And I looked at the data. The data did not show. At least all the data that I went through did not show that you got a better deal when you did this. Now, psychology would tell me that you would get a better deal, but the data shows that you would not. And so this is something that I think you can either test out and see if there's an area where if you go and call the seller's agent, you're going to get a deal, but all the data shows that buyer's agents actually are going to help you get a deal as well. And so this is something where at least a buyer's agent is in your corner. They are working for you. And one of those areas where if you want to hire a buyer's agent, more power to you. Now step six is if you find a house you like, then we need to assess a couple of different things. Let's say for example, you find a house that you want to go out and put an offer in. Well, before you do that, this is where you run total cost of ownership. Again. So you want to understand the true cost and assess first the renovations. How much are going to be in renovations? Are there any renovations? Whereas this a flipped or done for you house, then that might be a different situation. But start by looking through all the renovations, making a list of what you think needs to be done in the home and then going out and making sure you price that. If no renovations are needed or you just understand that we're going to do this over time and this is going to be one of those things that we do over time. You still need to price that into your numbers. Two is understand the property taxes for that house. So go to the local property appraiser, wherever that house is located. Usually it's on the county website. At least in my area it is. And so you go look at that specific county and you can look up what the taxes are, but you can also look up a bunch of other information as well. So you should get that in entire sheet of all the information on the property, look at the assessed value, look at any of the the permits that have been pulled on that property, all those different things, and make sure you understand those pieces. Then I want you to get insurance quotes early. So the best way to get insurance quotes when it comes to your housing is to find an independent insurance broker who can get insurance quotes from a bunch of different carriers. And so this is going to help you get the best deal overall. And every single year they can check all the different carriers to find the best deal for you. And then I want you to estimate the ongoing maintenance and utilities. So here's the thing is when you look at a house, each house is going to have different ongoing maintenance and utilities. The size is going to matter, but in addition, the layouts of the house is going to matter. What do I mean by that? If one house has a pool and another house doesn't have a pool, that pool is going to have a lot of maintenance costs, at least over $100 of maintenance cost between the chemicals, between at the time that you're putting in or hiring somebody to do it, those types of things. Or if a house has a massive Backyard. Well, you know, either your time spent maintaining that yard and, or you hiring somebody out is going to be a costly endeavor. Or if there's a lot of landscaping that needs to be done, or there's a lot of trees that need to be cut, or there's a lot of different areas outside. Those are just some of the exterior things. Interior. The larger the house, the more it's going to cost to cool, the more it's going to cost to heat. How old are the windows and doors? Because if it's an older house and the windows and doors are older, it's going to cost you more to also cool or heat. What's the insulation look like? All those different things are really important. Now, your inspector is going to give you a lot of this information as well as we get there. But this is something that you need to make sure that you are estimating some of those ongoing maintenance. Also looking for some of the things that you may have to replace over the course of the next decade, because a decade creeps up a lot faster than you think it does, especially when you're living in a house. And so you want to make sure that you are looking at all those various costs. And so really, really important before you make the offer to assess those renovations, assess the taxes, assess the insurance, and assess the ongoing costs. Those are the four areas I want you to look at. And if there are more that you want to make sure you're assessing, make sure you add those in as well. All right, so now it's time to make the offer. You've gone through all of this information and you want to make an offer on a house. Well, there's a lot of creative ways to make offers on houses. We're not going to go through all of those today. That would be three podcast episodes if I went through the. All the creative financing things that you could talk through. But if you want an episode on that, please let me know. But this is going to be one of those things where I want to talk through first. The number one thing that you need to make sure is in your offer number one, every single time, no matter what, and I'm not going to argue with you about this, is you need to have an inspection contingency. Every single person needs to make sure that they have an inspection contingency. Do not waive your right to an inspection. There have been so many people out there who have waived their right to an inspection and found something after they purchased the house because they made an emotional decision to buy the house. So they could guarantee that they got it and after the fact found all kinds of issues inside the home. This is a very costly mistake and I'm talking tens of thousands and in some cases hundreds of thousands of dollars depending on how costly this mistake can be. So always, always, always make sure that you have an inspection period. A lot of times it's seven days. Sometimes you can make it 14 days. The longer you can make it, the better. But overall, if it's a competitive market, you're going to have to reduce your inspection period if you're trying to get that house and being competitive. Two is obviously a financing contingency. Every standard, you know, document has these when it comes to real estate documents. But just making sure whatever state you're in, the standard contract will always have this stuff in there. It's going to have the clear closing timeline in terms of how long it's going to take before you can close. A lot of times you have to have conversations with your lender to make sure that they understand, you know what your closing timeline is. Just like 30 to 45 days is typically around that time frame. Sometimes it's 60, sometimes it's 75. But really you just want to make sure that you understand all of this stuff with your lender. The earnest money terms are also the amount of money that you put in in earnest money in order for the seller to know, hey, I'm putting some down here, I'm putting some skin in the game. So you know that I really want this house. If you back out within the inspection contingency period, then you get that money back. But if you back out after the inspection contingency period, then that's going to be an area where they get the money. So if you put five grand in and you back out after you have that inspection period, then that is going to be one of those areas where they're going to get to keep that money. So making sure you have all that stuff in place is really, really important. Now, as long as your realtor is using the standard document for your state, usually it's going to cover all the other stuff, the clear exit language, making sure they have the walkthrough provisions, making sure you have the seller credit language, if you want to have seller credits, all those different things are going to be really important. So just making sure you have some of those stuff in your offers important. Now let's go to step eight, which is negotiation tactics and added benefits that you can add in. Okay, so first of all, obviously, the purchase price is the biggest Deal overall, making sure that you get to a purchase price that makes sense for you is most important. Let's say a house is listed for $400,000. But if you go anything above $370,000, you are going into the red zone. The red zone is anything above 30% of your overall monthly costs of housing. That's going to be the red zone. You don't want to be in that red zone. You want to make sure you stay in the green zone, which is below 30%. And so that's very, very important to make sure when you buy a house. So you're going to offer 370. If the house is 400, you offer 370, you're not going to send above. Or you can even offer a little bit less and make sure that you were looking at this, you can even offer a little bit less and that will help ensure that you stay within those ranges. Now, one of my favorite things as a negotiation tactic, especially if you want to get total cost of ownership down and making sure that you stay in the green zone, is that you can get a seller credit. Now a seller credit can be used to temporarily or permanently reduce a buyer's mortgage interest rate in order to lower monthly paydowns. So if you do a rate buy down, this is called a rate buy down. If you get the seller to do a rate buy down, it can reduce your interest rate dramatically. So you can pay money up front in cash and a lump sum or something that is going to buy down your rate and reduce your overall interest rate. This is subject to, you know, lenders have limits and all those different things. There are a lot of nuances to this. But if you're interested in this, I would highly recommend you you doing some research on rate buydowns to see if that could work for you. Because that is a great negotiation tactic to throw in, especially in a heated back and forth debate and if there's not a lot of offers on the table and this house has been sitting on the market for a while, which is a great way to search for houses by the way, when houses have been sitting on the market for a very long period of time because in some instances that seller is motivated. Now some sellers are just stubborn. They just want to keep it up on, on the market as a really high price. But some of them can be very motivated, especially if they got to move or they have circumstances that make them motivated. There are other sellers credits that you could put on there as well. So funds that are provided by the seller to pay for your closing costs, you can have funds applied towards prepaid expenses or repairs. All those different things are something I would love for you to look at. Now. Prepaid expenses and repairs are something I have done a number of times. So my first house that I told you about, there were things like the AC was about to go. The AC was about 13 years old. And in fact I actually got five extra years out of that AC. But because it was about to go, I made the seller give me a $5,000 credit, which is what AC units cost back then. But give me a $5,000 credit for that AC because they knew it was about to go and I knew it was about to go. I got an additional five years out of that AC, but they reduced my purchase price by $5,000 because that AC was about to go. They gave me an additional $2,000 credit after I found some other things in the inspection report. So there are things like that that you want to make sure that you are looking through and thinking about also appraisal gap provisions. So let me give you an example of this. I brought my first house for $169,000. And at that point in time, this was a three bedroom, two bathroom house. It was a 1200 square foot house, Just a great starter home, had a pool, some cool stuff going on. When I sold it, I sold it for $340,000. I got the offer in at 340. I accepted it. And all of a sudden the appraiser came to the house. It was the. This lovely lady, so nice, was complimenting the house the entire time as she was walking through the house and she was in her little notebook and she was going through and appraising the house. And I was like, oh yeah, this, this is definitely going to appraise at 340. The way she was talking about the house, the way she loved the renovations. We've done all the things that we have done since we purchased the house and she was really, really excited about it. And guess what? She came back and appraised it at 3:25. And so guess what? I either had two options. I could either sell the house at 325 and or make the buyer come up with a cash difference. Did I want to deal with having to put the house back on the market if the buyer backed out? No, because I was already building a house. And so I wanted to just get the deal done so that I knew that in fact this house was going to sell at a specific amount. And so when we did this we ended up just having to sell the house at that 325 mark, where as you could have some of these GAAP provisions in place to make sure that when you sell you get this credit back. So these are one of those areas where you're going to see as you go through the closing process, this can be very, very important overall. So another one that we have is earnest money deposit. So you can look at your earnest money deposit and if you put down less because you don't want to put less down, then that is something where you can start to negotiate that. Or you could put more down but reduce the purchase price. There's two options there that are going to incentivize a seller. So if a seller is incentivized because they got burned a bunch of times by different folks who backed out of the house, then you could put down more. So you have to know what their incentives are. But you could put down more and that's going to create a situation where they may be interested in ensuring that they reduce the purchase price. Also, if you can close quickly, that is another area where this can help you tremendously in terms of getting a deal on a house. There are sellers out there who need to a maybe they already purchased their other home and so they want to make sure that you can close quickly and so that they can go move to their new home. That is going to be one where that closing flexibility is really, really important. Or maybe they are trying to close in their house so they have enough funds to move to the next house. Well, if you have flexibility there and you allow them to stay in the home for longer periods of time until they buy their next house, that is also another selling point where you can get either the purchase price reduced and, and or you can do something called a rent back. So what happens is after you purchase the house, you rent the house back to them until they actually close on their future house. This is another just strategic way to A you're going to earn some extra funds, but B it's going to help you overall reduce that purchase price. Now when you do rent back agreements, you can also do things like every single dollar that they rent it back for you, the amount of months they rent it back, that reduces that overall purchase price. That is also something you could do. Now 8 is inspection based negotiations. These are negotiations that you do based on what the inspection report comes back and you should always, always, always do this. So when you get your inspection report back, every single time, you need to negotiate the price of every repair off of that home. Unless they are clearly stating in the MLS listing that this repair is here and we are not negotiating this, then you negotiate every single repair on that list. They may take part of it, they may take all of it, but you need to make sure you are always, always, always negotiating that. Also, if there are renovations you want to do in the home because the home is outdated, you can ask for seller credits. There are those credits that you can ask for. I just gave you the example. When we bought our first house, we negotiated a $5,000 credit from the seller because the AC was old. You could do this with cosmetic things as well if you want to. And so it's up to them to say yes or no. But it is not your job to say no. And so it is not your agent's job to say no. You need to make the offer the way that you want it crafted and make sure that your agent sends in that offer. Now, you can also have different contingencies, like an inspection contingency, financing contingencies, making sure you have that appraisal contingency. All of those are going to be in your contract, but you just need to make sure that all of those are there. Now, another thing that you can do is do some personal property inclusions. Now, things like on a fridge, refrigerator, things that are not fixed to the property, those can be taken with the seller. If the seller wants it, they could take it with them. And so you can start to negotiate things like that. You can negotiate furniture, if you like the furniture in the property. You can negotiate all kinds of different things just like that. That's creative ways to get more value out of the home when you're making those offers. Now, that's how you can craft offer with a bunch of creative things. There's a lot more than that that you can even do. I would recommend doing your research on each and every single one of those. And if you want us to do a full episode on that, please let me know. Now, next, I want to talk about the inspection period. So around 80 to 88% of buyers choose to have a professional home inspection. And typically, if your agent is telling you to forego inspection, you need a new agent. That is not a situation that you ever want to get yourself into is foregoing inspection. 86% of people who actually go out and get an inspection, they identify problems in the home. I have never gotten an inspection and not found problems inside the home. And I've done this dozens and dozens of times. So this is one of those things that you need to make sure that you are always, always, always getting an inspection. What does an inspector cost? It's going to vary by area, but it's going to be hundreds of dollars. And if you have a larger house, it's going to be thousands of dollars. But this is one of those things where you absolutely need to make sure you take care of it. Guess what? You need to factor in the inspector into your total cost of ownership. This is going to be a very, very important thing. Now, one industry report found that over 1 million needed repairs across 50,000 homes surveyed with the average repair cost of $10,000. Where issues were identified. This is from actually getting an inspection. So it could save you over $10,000. This is one of those things where you're going to get some of those seller credits if you try to actually set this up correctly. Two is that in a survey of first time buyers, 17% who skipped the inspection reported doing so. And among those buyers, 66% had unexpected expenses averaging about $5,356. This is an investment that pays a dividend. This is an investment that pays a return. You need to make sure that you get that inspection every single time. And roughly 20 to 25% of transactions actually fall apart during the inspection period. Because there's one way more uncovered than they originally thought. There are things in the house because it's got the brand new paint, because it's got the lipstick on it. There are things in the house that you cannot see. And you need to make sure that you get that inspector in place. That is going to be one of the most important things that you do overall. Again, this is a requirement. I am not giving you the option for this. You are required to get an inspection if you're going to buy a house. Because if you don't, if you skip the inspection, you're just gambling on the unknown. You're just rolling the dice with thousands of dollars and possibly hundreds of thousands of dollars. So we want to make sure that we are doing this correctly. Now, let's say you get through the inspection period and that is all done and you are good to go. You are moving forward, you've done your negotiation, the buyer and you agree on a purchase price. Well, then, what happens next? It's the walkthrough, and we're going to talk about that in a second. So one of the final stages next is to go through your walkthrough. Now, your walkthrough is a very important step that some people skip. I don't recommend you skipping it whatsoever. Usually when the seller moves out of the home and you schedule a time for you to walk through the property. Now, I recommend doing this a couple days before closing. What a lot of people do is they'll do this the day of closing, and if they find an issue, then you have to push that closing back. What I would recommend is the day that the seller leaves, you have this maybe one day ahead of time, maybe it's two days ahead of time. But you can do a walk through the property to make sure everything looks exactly how it did when you were looking at the property originally. Because sometimes I have heard horror stories where people have gone through a walkthrough or they've skipped the walkthrough, they take control of the house, and all of a sudden it is trashed. So you want to make sure that you do this walkthrough. So it's typically 24 to 72 hours beforehand. And when you do this, you just want to walk through and make sure you look at your inspection report, make sure everything kind of looks exactly as it does, at least on the inside of the home. And you also want to make sure that if there are repairs done to the home and you agree on some of these repairs after the inspection report and they do those repairs for you, you want to make sure those repairs were actually done. You also want to confirm that any of the fixtures or the appliances are all there that are supposed to be there. It also will verify that everything is functioning correctly. Make sure the AC is working, making sure the heat's working, all those different things, and putting together a checklist so that you know when you do this walkthrough, I want you to kind of combine comb through as put your inspector hat on and kind of comb through your list and make sure that you know every single thing is done correctly. Now, if there's some minor small things, if it's not a deal breaker, no big deal. But for you specifically, I want you to make sure that you do that walkthrough. It is just the last important step so that you do not have any of this stuff happens. Now, if there is a problem, you're going to delay closing until this is resolved. Because if that problem exists, you need to make sure that you are disciplined here and you delay that closing and get that problem fixed, especially if it's a costly one. Or you can negotiate a credit off the final purchase price once again, and then you'll fix that problem so that you can get to closing. Now, step 11 is to go to Closing. So when you go to closing, it's a very simple process. A lot of times you close separately from the seller. My first time we closed on a house was the only time ever that I've closed in front of the seller. Where we were both at the closing table together was interesting, but it was a great actual process because you got to meet them and ask them questions about the house. But usually you're closing separately and you go to the title company's office or they just send you the documents and you sign them online, depending on what you want to do. If it's your first time, some I would recommend going into the office, asking questions, making sure you understand all these documents before you actually sign each one. It's very important to make sure that you know kind of what you're signing. So those last couple of steps, once you get through the inspection period and you're moving forward, typically the walkthrough is very standard. Unless there's something way off cuff, usually. Okay. Then you go to closing and that's it. Now last step, step 12. I want to talk through some of the things that you need to make sure that you are doing after you close on a house. Now that you're a homeowner. Congratulations. But we need to talk through some of the things you need to make sure you're doing. So just like at the beginning, we need to maintain that six month emergency fund. This is no questions asked. When you own a home, a lot more expenses are going to pop up. Houses cost a lot of money. You're going to realize that real quick if you haven't already. And so you need to make sure you have that six month emergency fund. Whereas if you lost a job or if anything were to ever happen that would ensure that everything is covered. Number two, always have a plan on how you're going to pay the mortgage if you lose your job. So the emergency fund should be the big plan for that. But if you don't have a plan in place, make sure you have one. 3. If you can't make ends meet, if you realize, oh boy, I bit off way more house than I can chew and I cannot make these ends meet. Or we are really on a fine line here and we're living paycheck to paycheck, sell the house. Do not delay. I'm going to tell you that right now. Don't even try to question this. No, I'm going to go get a third job or a fourth job. You're making your life miserable and instead it's an illiquid asset. So it's going to take some time. But I would recommend not delaying selling the house and then just restarting this whole process over again. Because this is one of those things where too many people get themselves into a situation where they are going to go financially backwards and go into debt because they bought a house and they bought it wrong. So if you're listening to this podcast and you're like, oh man, I bought this wrong. I completely messed up the way I bought a house. I would sell it and start over. It's a lot easier said than done, but it is. What really needs to happen next is to have a repair fund. So having a separate fund that helps with home repairs, especially the ones that pop up randomly, it's very helpful. So I actually like separating this out, even for my emergency funds. At times, your emergency fund could be your repair fund, but I like to separate it out and have a separate fund. And when that fund gets to be big enough where you just have it in place, you're really going to need a lot of different maintenance and repairs that are going to happen pretty often. Like every seven years, you got to paint a house. Every 20 plus years, you got to replace the roof, you got to place your AC or heater. Every decade or so, there's still a lot of things that pop up all the time. And so having a separate repair fund where you're sending maybe a hundred bucks, 200 bucks, 300 bucks every single month to that specific savings bucket is really, really important. Also, having a renovation fund is a very important fund to have a renovation fund is going to help you when you want to install new lighting in the house, when you want to go get that kitchen redone, or you want to make sure you renovate that bathroom, or you want to get some brand new light fixtures up front. Small or big, the renovation fund is going to be very, very helpful for you when you want to upgrade the house. Maybe you want to paint a room, maybe you just want to do something small like put some new landscaping in. All those different things are very, very helpful. And I like to have them separated out in different savings buckets. That's the way I like to think about it. And then also making sure you evaluate your insurance yearly to get those deals. You got to make sure that you have that independent insurance broker. You evaluate your insurance costs yearly and you actually push them to reduce your insurance costs overall. Those are going to be some big steps that I definitely want you to take as you think through this now, there are a bunch of nuances we could add to this episode, like insurance details or details on some other loans, but we just want to make sure that you have these steps that you need to take and understand where your finances need to be when it comes to buying a house in 2026. Listen, I know affordability is at an all time low and it is very difficult out there. So if it is too difficult and you don't have the funds yet, be patient. I want to recommend every single person out there to be patient. And since affordability is at an all time low, if you're trying to figure out how to get your finances together and you're stressed and you feel the anxiety or you feel the weight of, I don't know what to do next. My goal is to provide you clarity. My goal is to release that stress. And overall, that's what we do in Master Money Academy. If you feel the weight of the world on your shoulders or you feel like you don't know what that next step is, I'm going to show you how to do that in Master Money Academy. What we do is we give you the framework for financial freedom. We give you the framework so that you can have your most valuable asset of all back, which is time. And that's exactly what we show you how to do, step by step. So I've got a special deal for podcast listeners and I'm going to link it up down below so that you can check out Master Money Academy. And my goal is that once you're in there, I know you're absolutely gonna love it. You're gonna love what we do inside Master Money Academy when we give you those steps. I coach you every single week in there. I am there answering your questions, whether it's buying a house or whether it's doing something else. So I invite every single one of you to join Master Money Academy. And I can't wait to see you inside. Thank you so much for listening and we'll see you on the next episode.