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Size Can Be Deceiving

 

On a recent episode of a podcast I follow (I won’t tell you which one in case it would lower your opinion of me if that’s even possible), the host was chatting away with the show’s supporting cast, and he made a comment about cars that struck me: the Ferrari that Tom Selleck’s character (and mustache) drove in the television series Magnum, P.I. takes longer to go from 0-60 than the latest model of the Mini Cooper S.  They thought he was pulling their legs, so one of his staff Googled the info while the host nattered on about some other things and quickly came back with confirmation that the 1983 Ferrari 308 GT goes from 0-60 mph in 6.9 seconds while the 2017 Mini Cooper S can do it in 5.3 seconds.  Get out of town!

The host of this podcast is a huge car aficionado (although that’s not the theme of his podcast), so he obviously knows his stuff.  However, I’d be willing to bet if you walked up to random people on the street and asked them to place a small wager on which of the two cars would win in a drag race (1,000 feet), more than the majority would place their money on the sleek and sexy Ferrari 308 GT.  It looks like it eats Mini Coopers for breakfast, right?  

With that little lesson planted firmly in your minds, I’m sure you can see where I’m going with this, but since I love to state the obvious, I’ll go ahead and say it.  Isn’t that EXACTLY what so many people do when it comes time to purchase a house: they let their preconceived notions guide them in their decision-making process, and quite often, that costs them money (and/or a great deal of time).  I can hear some of you now, though, protesting, “Not me!  I do a lot of research myself and make sure I know all my options before I make a big decision like a mortgage.”  I’m not looking to pick a fight, but I’m going to call bull on that for most people.  

The reality is that the “research” most people conduct covers one subject, and one subject only: can I afford to buy a house?  Now, that’s the most fundamental subject you SHOULD research, and one that you should have down cold before you borrow a large chunk of money over a long period of time.  And once that research is complete, you toddle off to find a company that will loan you that money.  All done, right?

A mortgage lender worth a hoot (yes, I said “hoot”) isn’t going to let you walk into her office and start applying for a mortgage.  What do you mean?  Isn’t it sort of hard for a lender to make any money if he’s keeping borrowers from applying for a mortgage?  Calm down, I’m getting to that.  The hoot-worthy (you’re going to start using that term, I know it) loan originator SHOULD ask a few questions like what are your short-term and long-term goals with this property, and how do those goals play into your other goals with your family, career, etc.  The answers to those questions should prompt new questions that start off with “Have you considered . . . ?”  As an example, a little over a year ago, we had a young single guy come to us, and one of our LOs (all of our LOs are hoot-worthy, of course) asked those questions.  Because of those questions, the young man went from his preconceived notion of a single-family residence to purchasing a duplex.  He lived in the duplex for a year, rented out the other side, had the tenants basically paying his mortgage the whole time, and has now moved out (while keeping the duplex as a rental both sides of it) and purchased a single-family residence for himself.  All of this happened because we asked some questions and listened.  

A duplex, of course, isn’t nearly as glamorous as a house, just as a Mini Cooper S isn’t going to turn as many heads as a Ferrari 308 GT.  However, when you’ve TRULY done your research (assisted by someone worth a hoot), you’re going to reach your real estate goal a lot faster by picking the right vehicle (and you can still sport the ‘80s mustache regardless of what you choose). 

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