Exercise 1 Dream BIG Congratulations Today you just won the imaginary lottery!

Transcription

1 Exercise 1 Dream BIG Congratulations Today you just won the imaginary lottery! You are going to go out and buy your dream home. But first you have to figure out exactly what your dream home is like, 1. What does your dream home have? 2. What does your dream home not have? 3. What will you do at your dream home? 4. What will you not do at your dream home? Remember money is no object here! So if it includes a bat cave or sub port for captain Nemo s ship all the better! Keep in mind exactly what you are going to do at home. Are you going to watch movies in your theater? How about play tennis in the tennis courts? Let s get started! 1. Find a quiet place free from distractions and turn off your cell phone. 2. Set a cook timer for 50 minutes 3. Turn to Pages 2 and 3 4. Write down everything that comes to mind answering the four questions. 5. Spend the ENTIRE 50 minutes Page 1

2 Dream BIG Exercise Worksheet Part 1 My dream home has a My dream home does not have a Page 2

3 Dream BIG Exercise Worksheet Part 2 What I will do at my dream home What I will not do at my dream home Page 3

4 Exercise 2: Classify your dreams Now it s time to be honest with ourselves. We have not won the lottery. And captain Nemo s submarine does not exist. We need to determine which of our dreams are Pure Fiction list items that do not exist in today s world such as Captain Nemo s submarine and the Bat Cave. Quasi-Reality is anything that you probably don t see the average home builder incorporating in a home. Say a 10,000 gallon shark tank in the living room for example. Possibility is anything that sounds reasonable to achieve. Extra garage stall to work on cars for instance. Page 4

5 Exercise 2 Worksheet Pure Fiction Quasi-Reality Possibility Page 5

6 Exercise 3: Write your dream home blueprint Transfer your Possibility column to the Column 2 on Page 4 Next, quantify exactly what you need to make that dream a reality. Simply say the dream followed by requires a For instance working on cars requires a garage space. If you have not already answer specific such as, 1. Price or desired monthly payment. 2. Desired number of bedrooms 3. Desired number of bathrooms Also contemplate the best location. For instance close to work. Also take into consideration other activities you may be partaking in on a daily basis such as dropping kids off at school. List these items out as well. Page 6

7 Dream home blueprint Exercise Priority Possibility Requires a Answer the following questions if not already in the Blueprint Priority Minimum Maximum 1 Price / Monthly Payment # Bedrooms # Stories List locations you will be visiting most frequently. 1 / 2 / 3 4 / 5 / 6 Page 7

8 Exercise 4: Start your search Do some preliminary searching to get an idea of what homes are available. It s a good idea to speak with a real estate agent at this point. Share your dream home blueprint with the agent. See what they have to share as far as homes in that location. At this point refine your dream home blueprint if; 1. You find something on the market you like but did not include in your blueprint OR 2. Some of the things in your blueprint are not available in the area / price range you are looking in. Page 8

9 UPDATED Dream home blueprint Exercise Priority Possibility Requires a Answer the following questions if not already in the Blueprint Priority Minimum Maximum 1 Price / Montly Payment # Bedrooms # Stories List locations you will be visiting most frequently. 1 / 2 / 3 4 / 5 / 6 Page 9

10 Exercise 5: Select 6 of your favorite listings to view in person You want to have around a handful of homes to preview. Send your list to your Real Estate agent. As you visit the homes make sure to take a digital camera. One with video capabilities is a bonus! 1. Take a picture of the front of the house before viewing inside 2. Take pictures throughout the house of items that stand out to you such as, repairs that need made, features you like, etc. 3. When completed viewing the home fill out the score card. 4. For the last picture on the property take a picture of your completed scorecard. On the following page is a copy of a scorecard for a move in ready home. If you have other goals in mind with your purchase you may like to make copies of one of the other forms in the Appendix What type of home are you buying? Move in Ready Scorecard use this scorecard if you are looking to move in immediately and not lift a finger doing repairs, updates, etc. Note a move in ready home will likely be the most expensive type to get. Buy and Hold / Rental Scorecard these homes are a little less expensive. Typically you use this scorecard if you are looking to buy homes for rentals. Note they may not necessarily meet you personal tastes though as price is more important than personal taste in a rental. Fixer-upper Scorecard this scorecard will help you evaluate bargains. These homes may have a fair amount of visual repairs necessary but the stuff under the skin is intact. This scorecard will help you evaluate which homes are the best bang for the buck with the least repair costs. An excellent shopping method for budget conscious individuals. Fix and Flip Scorecard these homes are not necessarily able to be lived in. They may need major repairs along with a complete renovation. This scorecard will help you find the absolute lowest dollar property with the least number renovation possible but the homes may not be habitable without major rework. Page 10

11 Move in Ready - Home Preview Scorecard Property Address List Price $ Step 1: Preview home. Grade item for the home in the Table below. Total the scores. GREAT GOOD OK POOR BAD SCORE Neighborhood Location Floor Plan Roof Air Conditioner Heating Plumbing Electrical Hot Water Flooring Outside Paint Inside Paint Landscaping Appliances Personal Feeling Total (166 max) Step 2: Write a few notes about things which stood out on this property. Preview Notes Step 3: Select offer amount based off of how long listing has been on the market. Days on Market 0-15 days days days 90+ days Offer Competition VERY HIGH MODERATE LOW EXTREMELY LOW Step 4: After previewing all homes consider score of this home, it s competition, and market value. Then write your offer price. Property Score List Price $ Market Value $ Offer Amount $ Page 11

12 Exercise 6: Make an offer Based off the scorecards you filled out when previewing order the homes from top score to lowest score. Take the top home and make an offer to the seller. Do not be shy! Let the seller know you have other homes you may be offering on. You can even share your list of homes you plan to offer on. This puts more pressure on the seller to accept your offer as is. Note: Keep your creative wits about you. If you saw something that needs a little TLC do not discard it. This may be your opportunity to update a home to exactly your dream blueprint AND get an amazing bargain. Especially if it just needs some new paint, rugs, or clean up. Exercise 7: Was your offer accepted? If your initial offer was not accepted fall back on your scorecards asking yourself two questions, 1. Can or should I raise the offer price? AND 2. Is there another property I viewed which can be raised to my dream home blueprint for about the same or less money than I would have to offer on the property we lost out on. Either make an offer more favorable to the seller on the same property or move onto one of the other ones in your list. Page 12

13 Common Troubles I have properties with close home scores and cannot settle on which one is best to offer on... Take each home and list all it's pros and cons on a piece of paper. Then sit back and weight each one. My offers are not getting accepted... This can mean tone of two things. (1) You need to make more favorable offers for the seller. Perhaps offer more money or ask for fewer concessions or both. (2) You need to move faster on the offer. If it takes you a matter of DAYS to present the offer you may be getting beat to the chase. Turn in the offers as quickly as possible. I have too little money to purchase my dream home... I hear this quite often. Believe it or not. You are in a GREAT place. You have a goal and a desire to meet that goal. Through this process you will enrich your life! It may be 2 years from now before you have the means to get your dream home but it will happen so long as you keep your eye on the goal. That said, with sometimes it can even happen right now! It may simply mean looking at lower dollar homes. Switching your purchase goals to buy a fixer-upper And that my friend is the ultimate in Real Estate. Purchasing a fixer-upper means... You can update things to exactly your dream home blueprint AND you can save a bundle of money doing it! I have met people who have literally amassed a fortune in real estate by buying fixer-uppers. Fixing them as they live in them... Then selling the home and moving onto the next one. Page 13

14 Appendix 1. Move in Ready - Home Preview Scorecard Property Address List Price $ Step 1: Preview home. Grade item for the home in the Table below. Total the scores. GREAT GOOD OK POOR BAD SCORE Neighborhood Location Floor Plan Roof Air Conditioner Heating Plumbing Electrical Hot Water Flooring Outside Paint Inside Paint Landscaping Appliances Personal Feeling Total (166 max) Step 2: Write a few notes about things which stood out on this property. Preview Notes Step 3: Select offer amount based off of how long listing has been on the market. Days on Market 0-15 days days days 90+ days Offer Competition VERY HIGH MODERATE LOW EXTREMELY LOW Step 4: After previewing all homes consider score of this home, it s competition, and market value. Then write your offer price. Property Score List Price $ Market Value $ Offer Amount $ Page 14

15 Appendix 2. Buy and Hold / Rental - Home Preview Scorecard Property Address List Price $ Step 1: Preview home. Grade item for the home in the Table below. Total the scores. GREAT GOOD OK POOR BAD SCORE Neighborhood Location Floor Plan Roof Air Conditioner Heating Plumbing Electrical Hot Water Flooring Outside Paint Inside Paint Landscaping Appliances Personal Feeling Total (136 max) Step 2: Write a few notes about things which stood out on this property. Preview Notes Step 3: Select offer amount based off of how long listing has been on the market. Days on Market 0-15 days days days 90+ days Offer Competition VERY HIGH MODERATE LOW EXTREMELY LOW Step 4: After previewing all homes consider score of this home, it s competition, and market value. Then write your offer price. Property Score List Price $ Market Value $ Offer Amount $ Page 15

16 Appendix 3. Fixer-upper - Home Preview Scorecard Property Address List Price $ Step 1: Preview home. Grade item for the home in the Table below. Total the scores. GREAT GOOD OK POOR BAD SCORE Neighborhood Location Floor Plan Roof Air Conditioner Heating Plumbing Electrical Hot Water Flooring Outside Paint Inside Paint Landscaping Appliances Personal Feeling Total (126 max) Step 2: Write a few notes about things which stood out on this property. Preview Notes Step 3: Select offer amount based off of how long listing has been on the market. Days on Market 0-15 days days days 90+ days Offer Competition VERY HIGH MODERATE LOW EXTREMELY LOW Step 4: After previewing all homes consider score of this home, it s competition, and market value. Then write your offer price. Property Score List Price $ Market Value $ Offer Amount $ Page 16

17 Appendix 4. Fix and Flip - Home Preview Scorecard Property Address List Price $ Step 1: Preview home. Grade item for the home in the Table below. Total the scores. GREAT GOOD OK POOR BAD SCORE Neighborhood Location Floor Plan Roof Air Conditioner Heating Plumbing Electrical Hot Water Flooring Outside Paint Inside Paint Landscaping Appliances Personal Feeling Total (100 max) Step 2: Write a few notes about things which stood out on this property. Preview Notes Step 3: Select offer amount based off of how long listing has been on the market. Days on Market 0-15 days days days 90+ days Offer Competition VERY HIGH MODERATE LOW EXTREMELY LOW Step 4: After previewing all homes consider score of this home, it s competition, and market value. Then write your offer price. Property Score List Price $ Market Value $ Offer Amount $ Page 17