- 4 months ago
Today on AD, the Property Brothers, Jonathan and Drew Scott, are answering your top real estate questions from Instagram. Whether you're a first-time homebuyer, planning a renovation, or navigating the ins and outs of property ownership, Jonathan and Drew are here to share expert advice, insider tips, and budget-friendly strategies to help you make confident real estate decisions.
Check out the Property Brothers' newest show, Chasing the West, now airing on HGTV. https://www.hgtv.com/shows/chasing-the-west
Check out the Property Brothers' newest show, Chasing the West, now airing on HGTV. https://www.hgtv.com/shows/chasing-the-west
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LifestyleTranscript
00:00Hey, we're the Property Brothers and we've been helping people find their dream homes
00:03for over 25 years.
00:05And we are going to answer your property ownership questions that you asked A.D. on
00:08Instagram.
00:09Right here.
00:14What three things...
00:15Do I have to read them all together?
00:17Together?
00:18It's what twins do.
00:19It's what twins do.
00:20See what we did there?
00:21What...
00:22You're thinking of a...
00:23Donut.
00:24Sandwich.
00:25Oh, okay.
00:26What three things do I need before I decide I'm ready to buy a home?
00:29Money.
00:30Yeah.
00:31Good lawyer.
00:32Yeah.
00:33Good-looking contractor.
00:34No.
00:35Financing.
00:36You need to be organized.
00:37For qualifying, you want to make sure you're pre-approved and you're qualified on the financial
00:39side.
00:40And you really need to sit down and think about what is important for you.
00:42Don't get a house that only solves right now.
00:45Get a house that will also work for you in five or ten years.
00:47I remember when we bought our first house, we were 18.
00:50We were just going into college and we had no money.
00:54We had $200 and we found a creative way to finance the home and get into it by assuming
00:59someone's mortgage.
01:00So we basically got our first house for $200.
01:02Had a bunch of tenants paying us rent and then we were making $650.
01:05Yeah, I think it was $650 a month.
01:06And it actually provided us the revenue that we needed to buy our next home.
01:10And then we just continued flipping houses and got kind of good at it.
01:14When does it actually make more financial sense to rent versus buy?
01:18There's no sense in kidding yourself.
01:20If you can't afford to buy right now, then it's not the time to buy.
01:24A lot of people are actually partnering up with a sibling or friend or somebody to get
01:28into a home for the first time because that's the only way that they can do it.
01:32And it's totally fine.
01:34In fact, once you get into the real estate game, it's easier to progress in it.
01:39They do say though that the next generation will be the very first generation who cannot
01:43afford to buy a home on their own.
01:45So that's unfortunate.
01:46And that's because there's a massive lack of housing, especially with the affordability
01:51crisis and the housing crisis right now.
01:53A lot of people are really weighing, does it make the most sense to buy a home or should
01:57I rent?
01:58And what is my lifestyle?
01:59Do I want to spend all my money on a mortgage or do I want to save it in money and travel
02:02or spend it in other ways with my family?
02:05The steps for me would be sit down, find a fancy little journal or notepad and write down
02:09all of your must haves and your lifestyle.
02:11Not just the house must haves, but what do you need in life?
02:14What does your family need?
02:15And then what are you looking for in a home?
02:17And that can help you break down whether it makes more sense to buy or rent.
02:20Are there still affordable places to buy houses in America?
02:24Define affordable.
02:25If you're looking in an area that's the hot area, you're likely already overpaying.
02:32So look for the areas that are up and coming.
02:34It is really hard.
02:35If you're in any of the major cities, it's super expensive.
02:37You know, even in LA, if you were to go a couple hours outside of LA, you can find some
02:41decently affordable.
02:42It doesn't necessarily work with your lifestyle.
02:44I couldn't live two hours outside of LA and commute into LA every day for work.
02:49That would be terrible.
02:49I have an investment portfolio out in North Carolina.
02:52And one of the reasons too, is we're trying to create beautiful, affordable homes for families.
02:56And out there, there is actually a better price point for people to be able to afford.
03:00So what are the stages of buying a home or property?
03:04How about a little 101 on the home buying process?
03:06So you decided that you want to have your home, you've got all your finances together, you've spoken with your bank, you have your down payment, you find the right house.
03:14And you want to be working with a real estate professional who is representing your needs.
03:18The thing is, the listing agent is representing the seller.
03:21I believe in having separate parties represented by separate people.
03:24Yeah.
03:25You want somebody with your best interests in mind.
03:26So your real estate agent will help you shop the market.
03:28Hopefully they're really good at what they do.
03:30Like I am, and you'll get a great property, you're going to get that offer in, it's going to be accepted because you make a reasonable offer and you don't try and lowball for no reason.
03:38And then your money's going to go into escrow, you do your inspections, hopefully if everything goes well, and you don't have any big changes, or even if you do, then you close on the property and you move in.
03:47And depending on whether you wanted a renovation or not, that's the next bundle of joy.
03:51Is it true that you need enough money for a 20% down payment to purchase a home?
03:55This constantly changes as things tighten up and then things loosen up.
04:00No, you can actually still purchase a house with less than 20%.
04:03Just realize the more money you put down, the more confident the bank is going to be.
04:07So generally a better lending rate you will get, but speak to your financial advisor, speak to your mortgage broker, speak to somebody who can give you the options because they want your business.
04:17So you ask all the questions you want and figure out what the best product is for you.
04:21I also think it's important too, when you're putting together your, your budget for your home, look at everything outside of just the mortgage, right?
04:27You got to look at your taxes.
04:28You need to look at your utilities.
04:30A lot of houses are getting rid of gas.
04:31Even in California, you can't put gas in new homes, but that can really boost up your electrical.
04:36So you got to make sure you know all your costs before you get into a home.
04:38It's like the next question.
04:39How do you know if a home is a money pit?
04:40Well, when you're walking through your property, anything that feels a little off should concern you.
04:46And so write those things down, take pictures, ask questions, do follow-ups.
04:50We also call it the ick factor.
04:52Use all your senses.
04:53Look at the space.
04:55What looks like a little off.
04:56Even if you see the switch plates for your light switch is a little crooked or a vent is a little crooked.
05:01The more things like that you see that are a little off, it means they don't have the attention to detail that they should have.
05:05And there are probably bigger issues inside the walls.
05:07Use your nose.
05:09Yes.
05:09If you smell something musty or if something smells rank, that could mean that there is a plumbing issue, a mold issue, any number of issues.
05:18If it's a home that has really complex electrical, you might want to even bring an electrician to do an inspection on the electrical.
05:25Keep in mind, if you just hire someone to do a home inspection, a lot of times the home inspectors don't have years and years of experience.
05:32So they're just going off a list of things that they should be looking at.
05:35It doesn't mean that they don't find something that there isn't a problem.
05:38There could be something inside the walls that they didn't see.
05:40Also, keep in mind, just because you buy a fully renovated place or a brand new place doesn't mean that it's any better than an older property.
05:48A lot of new buildings have more issues than old buildings.
05:50You have to make sure you have them properly expected.
05:52Are you saying that flippers would cover up a problem?
05:55What?
05:56Yeah, they do all the time.
05:57Yeah, it's sad.
05:59What types of property will bring back the most ROI for an investor?
06:04I have always found that a fixer upper ends up putting more equity back in our pockets because you're either paying somebody else to do all the work and then that person wants their appreciation on the work that they did for their equity.
06:17Or if you find a place that you can put your own sweat equity into.
06:21Yeah, exactly.
06:22We did find, though, there was this balance in a lot of properties.
06:25As soon as you started having to do major structural work or major hill work, things like that, it was a lot more money up front and your margins started to diminish.
06:32So we always tried to find a house that architecturally was really, really great, but just super dated.
06:38Yeah.
06:38And that was a lot easier to fix up.
06:40How do I find and vet a good general contractor?
06:42Oh, so many good things.
06:44I always have a couple of rules.
06:46One, make sure that your contractor has lots of professional affiliations, better business bureau, registered with national home warranty programs, things like that.
06:54Also, make sure it's not somebody who changes their number every two weeks.
06:58Shady.
06:59And the other big thing, too, is because you're getting someone who's setting themselves up like a professional, you want to make sure that they're also giving you professional documentation on everything.
07:08Quotes in advance before you decide to go with them.
07:11You shouldn't be writing big checks to them if they're not bonded.
07:13You want to make sure they're a reputable contractor.
07:16Also, keep in mind, people are like, you know, I want to save that 10%.
07:19I don't need a general contractor.
07:20But I have two kids.
07:21I can't imagine a full time job, plus taking care of the kids, plus trying to oversee a big construction project.
07:27That is way too stressful.
07:28Most renovations are the biggest friction point for couples.
07:32So bring someone in to oversee it.
07:33Nothing is worse than living in a renovation, especially if you have kids.
07:37I just thought of something worse than living in your renovation.
07:41Living in your renovation with your identical twin brother.
07:44Oh!
07:45We did it for years.
07:47I thought I was brilliant.
07:48I cook breakfast every morning.
07:49I give him my protein shakes every morning.
07:51He didn't like them.
07:52I'm not very handy at all, but how do you build your home improvement skills?
07:57I wish more people would ask this question.
07:59I love this question because so many of the families we work with today have no clue how to maintain their home.
08:05They have to hire someone for everything.
08:07And is it just you and me?
08:09Or every time you hire a plumber or an electrician, it's a thousand bucks.
08:13No matter what the project is.
08:14So, yes.
08:15It's important.
08:16I would say there are a ton of amazing books that you can get, sort of how-to guides on how to tackle all of the basics.
08:22Again, a lot of great videos from professionals online.
08:24Think about your own home right now and the stuff that you need and start knocking that off your list.
08:29Learn these projects one at a time.
08:31We started renovating houses when we were kids because our dad was very handy and he would have us,
08:36you know, we built the family house, we built the barns, we finished the basement in one of the houses.
08:41So, get your kids started young.
08:43Parker already is my handyman.
08:44He'll hold my tools or something when I'm doing something.
08:46They're already not paying rent.
08:47Make him work for it.
08:49Do it.
08:50The only hard part is, you know, he's three years old now, but when he was two, he would help me a little bit.
08:54And then Linda would be like, Parker learned a new word today that I've never heard before and he probably shouldn't be using.
08:58And, you know, my trucker mouth comes out a little bit sometimes when I'm, like, missing the nail with the hammer.
09:03Yeah.
09:04Sorry, Parker.
09:05I wouldn't know.
09:06I'm an angel and I've never used nor heard these words.
09:08Never cursed in your life.
09:09We're taking over the family farm.
09:12Any advice on preserving structures and memories while renovating for our own needs?
09:17This is something that Jonathan and I are very, very particular about because when you have an old home,
09:21both of us live in century old homes, there's a lot of character and charm of that era of the home.
09:25You don't want to lose that and just make it some modern renovation.
09:28That doesn't make sense.
09:29So capturing the old, the essence or breathing new life into that while bringing modern functionality.
09:34That's a really key thing.
09:35There are a lot of properties where you're actually devaluing the property.
09:38If you get rid of the character that makes that place so special.
09:42So make sure you understand the property that you're living in, what's expected of that property on the market.
09:47People in your real estate professional can help with that.
09:50And then also just make sure whatever you do is going to add not only a beautiful aesthetic, but lasting value.
09:56There are some things people do.
09:57Like if you paint brick the wrong way, you can actually erode the brick underneath and cause a structural issue on the exterior of your home.
10:04Yeah.
10:05And one thing, so for a family farm too, keep in mind a lot of old, old ranch or farm properties that we grew up on a ranch.
10:09It was a lot of wood products everywhere, but nowadays they're, they're composite materials that look just like wood that will last way longer.
10:16There's innovation in the home space that can really help you stretch a budget and stretch the life expectancy of those products.
10:23How do you get rid of that subtle old house smell?
10:27Yes, Jonathan to leave the room.
10:29Moving on.
10:30Next question.
10:31Yes.
10:32Okay.
10:33Depends what is causing the smell.
10:34So be aware that smells are generally trapped in soft surfaces.
10:39So if there are draperies, if there's carpet, anything like that, the materials upholstered goods, that's usually what will hold onto the smell.
10:45So whether somebody was a smoker, if it's cooking smells or if it's musty mold smells, that's where you'll find them.
10:51The other thing too is in old houses, they never used to seal under the slabs of the home.
10:55Concrete is very porous.
10:56And so the smells from underneath that damp, dank smell would come up through the concrete and that's what you're smelling.
11:02So if you're ever taking out the flooring in an old property, seal the slab and there are special paints that you can use to do that.
11:10It's as easy as rolling it on, seal underneath before you put your new flooring on top.
11:15And that will keep that smell at bay.
11:17Another thing to keep in mind though too is certain smells like we were saying with water leakage, there could be mold and issues in the wall.
11:22So sometimes it's nice to have a professional come in to do a proper inspection of the home to make sure you know if some of the smell issues are just surface or if they're hidden and could be a bigger problem.
11:30You don't want health issues with your family because you're living in a house that might have mold spores in the air.
11:35What's the smartest way to plan and use my budget for every phase of renovation?
11:40My thing I would say is don't just do the kitchen and then you wait and you save a little bit and then you do the bathroom and then you wait and save a little bit.
11:48If you can try to pull together your budget or finance yourself in a way where you can do everything at one time, it's best to do it because then you're going to save on your trades because they're not coming back multiple times and recharging you.
11:58They can bundle their packages with you a little bit.
12:00Also think of the expenses that you have to lay out for.
12:03So for example, kitchens are very expensive because you have lots of appliances and stone and fixtures and things like that.
12:09Well, if you know you're doing a full renovation, start shopping now.
12:13Don't wait till the last minute when you need to have the fixture and you need to have the appliances because all the retailers have big sales at least every other month.
12:21So if it's a year long renovation or a two year long renovation, start shopping now and make sure for your contract you know exactly what you need so you don't buy something that you ultimately don't use.
12:31So that's a good way to find deals on things.
12:34The other thing to consider as well when you are renovating, make sure you have a contingency.
12:39That's probably my number one advice for people.
12:41Have a contingency of no less than 10%.
12:43So you can party or get that big screen TV.
12:45Exactly.
12:46That's what people always think.
12:47They're like, oh yeah, my contingency is for a big screen TV.
12:50No, it's because every project has hidden problems.
12:53You want to make sure you have money set aside.
12:55So you're not financially devastated if something happens.
12:58This is something that's a little annoying right now.
12:59There are tariffs that are increasing the pricing of certain products in the home.
13:03But there are also a lot of trades and contractors that are jacking their prices way up.
13:07Oh, it's because of the tariffs.
13:09No, they just found an excuse to be able to jack their prices up.
13:11So you need to be well aware of what the costs should be.
13:14Do your research, have an understanding of the base costs and make sure that you're working with somebody
13:18that can help you understand what the labor costs should be as well.
13:20I think because you're here right now with us, it means you're the right sort of person
13:24who's thinking ahead, you're planning ahead, and you're going to have an amazing project.
13:27I hope you are now ready to buy your home.
13:30And if you have more questions, you know where to find us.
13:32I didn't want to leave.
13:33Are they kicking us out?
13:34They are.
13:35Oh, I drew something for you guys.
13:37It's my little gift.
13:39I am the bearded stick man.
13:41Don't encourage him.
13:42Okay.
13:43Yeah.
13:44You're welcome.
13:45This is worth a lot of money.
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