The world of real estate can be intimidating. Whether you’ve been through the buying and/or selling process before or not, there is always a life shift happening when you’re dealing with real estate. Because real estate is a big deal and can be intimidating, we brought in our friend Kate Webster to give us (and you) a little Real Estate 101 - a crash course in buying and selling. Kate is a real estate professional in Nashville and is one of the most engaging people we know. This episode will help YOU through and process what buying and selling looks like, and hopefully it makes the whole process a little less intimidating.
Real Estate 101 with Kate Webster
Kate Webster - Real Estate Professional
Kate has lived in the Nashville area for 10 years. Before becoming a real estate professional, Kate worked in the corporate world with Ramsey Solutions, Dave Ramsey’s company devoted to instilling common sense financial wisdom in the world. In 2015, Kate and her husband Calvin took a trip across Europe to evaluate where they’d been in life and where they wanted to go. It was on that trip that Kate made the decision to dive into becoming a real estate professional.
When she's not selling real estate, Kate is probably planning a fancy dinner party, dancing her socks off at the YMCA, or giving someone a henna tattoo. She and Calvin reside in a sunlight-filled condo that is appropriately nicknamed "The Fish Tank". She has an open door policy not just in her home, but with all things in her life and she loves to help people get the most out of what THEY want out of life!
At what point would you recommend someone jumping into buying instead of renting?
If you’re making the decision for the right reasons, you’ll make the right sacrifices and be happy with the decision you make. What that means is that you need to think through your reasons for wanting to move. What are your reasons for wanting to move? Do you want more space? Are you wanting to live alone? Are you wanting to make an investment? Are you financially able? The right motivations will lead to making the right sacrifices.
As far as timetable goes, Kate recommends that if you are planning on staying in an area for more than 3 years, it usually makes sense to buy instead of rent. “5 years is a great number,” she adds. The point is - if you aren’t in your location temporarily, it may make sense to look at purchasing instead of renting, especially if you have strong certainty that you will be in the same place long term.
Psychological reasons for wanting to purchase are important to consider as well. “Peace of mind is worth a lot.” Everyone’s journey with buying vs. renting is different, but these are all things to take into consideration when making a decision.
The First Steps of Buying A Home
The first step in this process is simple: identify your desire to move. This goes along with what was discussed above, but you need to WANT to move before going forward with purchasing a home. The second step is similar: identify if you are financially ready to purchase. Find a good mortgage lender, one with the heart of a teacher, that can help you walk through that process. They will take a look at your CIA (credit, income, assets) and give you a BALLPARK range of home prices you should be looking at. Generally speaking, do don’t want to end up at the top of that range.
PRO TIP: Have your mortgage lender give you a breakdown of what your monthly payment will be on your mortgage. This will help make that purchase price seem more “real,” and help you identify what you can and can’t afford.
Once you have identified your desire to move and assessed what you are able to do financially, it’s time to move forward with your realtor, who will help guide you through the process. This not only includes finding homes that you will love, but also includes guiding you through the inspections, negotiations, and everything else that is involved in the selling process. There can be anywhere from 4 - 18 people involved in the process! Your realtor is the point person for helping you navigate through the various stages of this process.
A Common Misconception - Homes Cost More Than People Think
As you and your realtor begin looking at homes, there’s something you need to know: you probably can’t get the home you want, in the location you want, for the price you want. Especially if you are in a hot real estate market like Nashville, you need to be prepared to make some compromises. Kate recommends that if you find a place that is a 7 or 8 out of 10 on your list, you need to SCOOP IT UP. Maybe you can make improvements later or just learn to live without the few things that would make it a 10 of 10.
PRO TIP: You can expect to pay 30%-50% MORE for a 10 of 10 house. Finding a house that is a 7 or 8 out of 10 is the sweet spot for value vs. cost.
What are the top things you see clients looking for when they’re buying, and what do you think they SHOULD be looking for?
There are three main things that most people pay the most attention to when buying a home: the kitchen, the master suite, and the green space. We have also seen this as an interior design business, as we do a LOT of kitchens and master bedrooms! When you have guests, everyone hangs out in the kitchen. That’s just how things are, so most people like to make sure that kitchen is nice, cozy, and spacious enough for people to gather. Master suites are high on the list because that’s YOUR space. Guests generally aren’t hanging there, it’s where you get to retreat, relax, and spend a lot of time. You want it to be comforting and peaceful. And everyone loves good green space - a nice patio or a deck where you can hang out when the weather is nice is always a plus for a home!
One thing Kate says that buyers SHOULD be taking into consideration is school district. Especially for married couples, you never know when kids might enter the equation. It could be sooner than you expect, so it’s always a good idea to at the very least consider that while you are looking.
PRO TIP: Ask your realtor take you to some parts of town you haven’t considered. Be open to what they have to show you - you might find something you really love
The Dreaded Inspection Report
Just going to hit this briefly - ALL HOMES HAVE PROBLEMS. Try not to be freaked out as a buyer OR as a seller when the inspection report comes back with 50 pages of things that need fixing. Most of these items aren’t going to be big ticket fixes, but this ensures that the house is going at market value for the condition that the house is in. The inspection report is used as negotiating power on both sides. There is no reason to walk away from a deal solely because the inspection report comes back with problems.
A little louder for those in the back…
THERE IS NO REASON TO WALK AWAY FROM A DEAL SOLELY BECAUSE THE INSPECTION REPORT COMES BACK WITH PROBLEMS. You simply need to take that report, assess the situation, and continue negotiations with this in mind. If you and the seller cannot come to an agreement on how to address those concerns, then you will be able to walk away and continue looking for other homes.
"When you’re making decisions for the right reasons, sometimes what looks like giant hurdles are just little speed bumps in the road” - Kate Webster
If you’re looking for a fixer-upper, what are some qualities people should look for and what are some things people should avoid?
One thing you want to do is look for homes in areas that are appreciating. Your realtor can help point you in the right direction here, but you want to be somewhere that the are will *hopefully* continue to grow and raise in value intrinsically. That will only bolster the value you add by fixing up the fixer-upper.
Advice for first time fixer uppers - look for a slightly newer home, like 70s or 80s. As beautiful and charming as those 1920s homes are, newer homes have much newer internal systems that generally make renovations much less expensive and time consuming. Replacing old internal systems can be costly and drain your renovation budget before you even touch anything cosmetic. This can be overwhelming and demoralizing for anyone, so keep that in mind as you search for a home to fix up.
Advice for Sellers Preparing to Sell
Kate recommends simplicity here. You don’t know what is going to be the most important thing for your buyer. For instance, if you change a paint color, the buyer might have a completely different desire for paint color that you can’t predict. In that case, you’ve only wasted time and money painting the room. When selling, the goal is to NET the most money possible. That means keeping it simple.
PRO TIP: Yes a $20k dollar kitchen update may help your home sell faster and maybe for $20k more, but you are still NETTING $0 extra. If you’re renovating solely for the purpose of increasing sale value, it isn’t worth it in most cases.
Again, this is ONLY if you’re renovating for the sole purpose of increasing sale value. OBVIOUSLY we love renovations and they are absolutely worth the investment! The point is that renovations you shouldn’t go overboard spending money TO SELL.
At what point is it wise to do renovations?
This is pretty simple - You should make the decision to renovate for YOU, not for a potential buyer or anyone else. How long are you going to live in the house? And do YOU want to live in the house for that long with the renovation, for however long you may be in the house? The consideration is about YOU wanting to live with that renovated space for as long as you’re in the house.
We love renovations :-) If you’re thinking about one and would like some guidance, let us know!
Free Things You Can Do To Help Your Home Sell
#1 - DEEP CLEAN
Take things off the shelves and mantle
Pare down closets - try to keep them about 60% full and the floors completely cleared. This will make the closets look much larger
Take down family photos
Take things of any flat surfaces (countertops, tables, shelves, etc)
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Links and Extra Resources
Our favorite residential real estate website/app: HomeSnap
Not in Nashville? Find a Endorsed Local Real Estate Professional from Ramsey Solutions (they aren’t a sponsor, we just like them and it pertains to this episode)
ANOTHER Ramsey blog about how to sell your home.
Ok we are done :-)