Building a House or Buying a House? – Interview With a Real Estate Expert

The real estate industry has changed this year because of the pandemic. As a prospective house owner, you might want to dive into the topic, research the real estate market before investing your money, and also decide whether you want to build a house or to buy a house. 

We’ve already discussed the idea of building a house such as a manufactured home in our previous interviews. This time, we want to make an in-depth review of the housing industry.

To help every potential homeowner find answers to their most important real estate questions, we’ve invited the Utah Realtor and New Home Construction Specialist, Ty Wilde. For the past 15 years, Ty has sold over 400 homes for more than $100 Million in real estate closings in Utah. 

In this video interview, we asked Ty to share his vast experience and give expert advice on whether to build a house or buy a house. Hear his expert tips and find out what to expect in real estate in 2021, what’s the best time to buy a house or to build one, what to consider during the house inspection, and more:

• Tips on buying a house
• The best time to buy a house
• The pandemic effects on the housing market
• House inspection before purchase
• Building a house VS Buying a home
• Legal aspects to consider when buying
• Key issues faced by the buyer
• Real estate investment: pros and cons
• US housing market predictions for 2021

Watch the video interview with Ty Wilde to find answers to these questions. Follow the transcript below for details:

What to Look For When Buying a House?

Ty: Instead of buying a $300,000 house, you can now afford a $370,000 house for the same payment at 300, with more rates being where they're at. I'm a huge proponent of building a home. And I'll give you a few reasons why. A seller could somehow trick you. That makes you think you're buying the house, but you're really not, and then they get all your money or whatever else.

So real estate has proven to be one of the safest and best investments ever. And if you do that two or three times, you will become a millionaire.

Elena: Hi guys, today with you Elena, from PissedConsumer. As you know, unfortunately, the coronavirus pandemic affected many businesses personalized, and even the lifestyles of a lot of folks around the world. The real estate industry is no exception and has also changed during the last few months. That is why we decided to share with you some tips on how to purchase a house.

To talk about the issues that first time home buyers may face, and discuss the housing market predictions in the United States for the remainder of 2020, and the upcoming year of 2021. Now to give you the best answers and the most available information, we at PissedConsumer invited the Utah Realtor and new home construction specialist, Ty Wilde.

So Ty, as a real estate expert, could you please explain to our viewers what it is that a person should be looking for when buying a house?

Ty: Yeah. Well, first of all, thanks for having me. A lot of times people are always so worried about the cost of the home, but really they should focus more on the value. And I'll get a little bit more into that a little bit later. But I always tell people to start with their minimum requirements and then look up from there. And the reason I do this is because you might find a home that's a little smaller than what you wanted, but it might be in the perfect location.

Or if you're willing to look just a little further from your perfect location or your desired location, you may find a house with everything you want just a few miles further from where you were looking.

Elena: Thank you very much for that answer. Very detailed. Thank you. So let us take a step back please for a minute. I would like to ask you a question regarding your specialty. Ty, do you sell both residential and commercial real estate or do you focus on only one of those?

Ty: No. So I deal with existing homes and new home construction.

When Is the Best Time to Buy a House?

Elena: Thank you, Ty. Thank you very much for that answer. And when would you say is the best time to buy a house?

Ty: That's a great question. That's a question I get a ton. And it depends on you a little bit. If you buy in the spring or the summer, the best time is going to be... Well, let's put it this way. There are many more houses available in the spring and summer, but there's also going to be a lot more competition. If you want a lot of variety and a lot of options, and you're willing to pay a little bit more the spring and the summer is a perfect time.

If you're looking to get a deal, a lot of times buying in the fall or the winter is a great time, because there are people who didn't sell their house in the spring and the summer, and they might be a little more desperate. And now the buyers are going away as well. And so you may be able to get and negotiate a little bit better price that way, but you're not going to have as many options.

How Did the Pandemic Affect the Housing Market?

Elena: Speaking of the current situation with the pandemic and everything, how would you say it affected the housing market where you operate, which is the state of Utah, and the housing market in the United States in general? In your opinion.

Ty: Yeah. So the coronavirus has definitely thrown a wrench in the market. But in places like Utah, where the market was in a severe housing shortage before it happened, we are ... Our market's insane right now. One of my neighbors just sold his house. He listed it in two and a half days, there were 14 walk-throughs, seven offers and he sold the house for 25,000 more than his asking price. 25,000 more, not 2,500.

And that's because in Utah, what happened ... Well, nationwide what's happening is a ton of people are not going to sell their house anymore. People who are planning to are no longer doing it. So in Utah where we were already in a severe housing shortage, now it's even worse. Because we still have all these people moving here. Some people got trapped in their apartment or their parents' basement or a non-desirable situation.

Yeah. And now they're finding themselves like, "I need to get a house right now." And so it's actually driving home prices up. And it's a crazy thing that's happening here. Nationwide though, I guess I should talk on that real quick, in some locations that are absolutely not happening. And so if you're in a situation where the market seems to be declining, it's probably going to get a little bit worse.

And so you may want to hold off, even though mortgage rates are really, really good right now. It's really important to understand your local market. In Utah for instance, we knew we were in a severe housing shortage. The market was going crazy before the pandemic. So if you live in a location that was like that, you're probably going to ... It's probably going to be pretty similar to that.

If you're in a location where home prices were declining, then this is probably a moment where you really need to think about your decision. And I'll just talk about mortgage rates really quick. 3%, that's insane. I mean, that's crazy. I think a year and a half ago, a year ago we were sitting on four and a half percent. So you're getting about 50 to $70,000 in extra buying power.

So in other words, you can now ... Instead of buying a $300,000 house, you can now afford a $370,000 house for the same payment at 300 with mortgage rates being where they're at. So I personally don't see home prices in most areas of the country dropping $70,000. So as long as you're in a stable situation financially, you know you're going to keep your job. You've got extra money and savings in case you lose your job.

You obviously want to have extra money, so you can make a couple of months of payments if something bad happens. Go out there and talk to a lender and I'd say, "Get going." Almost anywhere in the country, I'd recommend that.

How to Inspect the House Before Buying?

Elena: Thank you very much Ty for such a detailed answer. Now, I believe it is important to our site visitors and users, and for everybody in general, to know about these things. Now, if you look at reviews posted on our Website PissedConsumer.com, a lot of people write about the issue of home inspection.

And not just about the home inspection in general, they are asking a certain number of questions about the home inspection and their reviews. So let's say I am a first time home buyer, or maybe a repeated home buyer, I walk into the house, what should I inspect? What should I look at? What are the signs?

Ty: That is also a great question. What most people don't know about me, I actually started in the industry as a home inspector. And so that being said, as a real estate agent I do not inspect the home. You have rights. I always recommend just don't inspect it yourself, just pay a home inspector. They cost $300 to $500, and in almost every situation that I've ever had a client, or I've personally hired a home inspector in almost every situation, they've found more than $500 of repairs that need to be made or changes need to be made.

And that's why you want to have a real estate agent, because the real estate agent can go in there and renegotiate with the seller saying, "Hey, we still want the house, but we found these three things wrong. And really they do need to be corrected before we can move forward." And I always tell the seller that the next person who comes in, if they get home inspection and they probably will, they're going to ask you those same three things to be done.

So the seller is left with ... In a situation where they feel like, "I'm going to have to do those anyway. So I might as well just do them and sell the house."

Building a House VS Buying a Home: Which Is Better?

Elena: Okay. I see. So just don't inspect anything, right? Let the professionals do it. Now, that brings me to another question. What is the quality of the home that you are purchasing, and taking into account how important it is to inspect a home before purchasing it? Is there a difference between whether we are building a home from scratch, or whether we are buying a home that someone else has already built?

Ty: When it comes to building a brand new home, a lot of people choose to have a home inspector and that's great, and that's fine. I mean, if you really want one, get one. Usually, with new home construction, you don't need a home inspector. The builder gives you a one year to two-year warranty and they're going to come in and fix anything that goes wrong within that time period.

But I'm a huge proponent of building a home. And I'll give you a few reasons why. There's no repairing or replacement. Everything's brand new. Right? So you're also going to have better quality construction. Houses today they're built with the latest and greatest products and the latest building codes. And plus the builder has a warranty on their house.

So generally you're not going to have to repair or replace anything usually for six or seven or eight years. And then you're starting with the small things. Right? Also, newer homes are way more energy efficient. You got brand new appliances and fixtures. You also get better floor plans and you often have the option to customize. So some builders will actually allow you to say like, "Oh, can we make that family room just two feet bigger, we've got a really big family." Or whatever.

Also one thing I love about new home construction. There are a lot of times you're moving into a brand new neighborhood where everybody's new. Every house is new, which really holds the value of the neighborhood. It's easy to make friends because a lot of people are moving from out of state or from ... Just even across the city and they don't have friends.

So, I mean there's a lot more advantages to the building than just getting a new home. My brother in law and my sister-in-law, they lived in Henderson, Nevada, and they had a small home site with zero landscaping, but it was a master plan community. They had swimming pools, parks, basketball courts, tennis courts, and they didn't have to maintain anything.

So there's a lot of advantages to that. The disadvantage of building is that you won't have mature landscaping. I've been in my house for six years now, and my trees are still like this big around. Maybe 10 or 12 feet tall. It would be nice to have some shade trees, but I won't have those for another probably five years.

And then I guess the other advantage to not building is usually, with existing homes you can get closer to the city or closer to work or things like that. Right? I guess one more advantage I didn't ... I really think about it, if you're patient when buying an existing home, you ... Maybe you'll find someone who's desperate and you maybe will get a really good deal. So I don't know. Personally, I just feel like it's better to build.

Right now in Utah, where people are bidding up and up and up for the houses, it becomes this crazy thing. You might pay 10 or 15,000 more for the house or in my neighbor's situation, someone paid 25,000 more for the house. With a home builder, you just go and pick the house you want and you walk the price. And you do not have to worry about multiple offers to fight for the house.

What Legal Aspects to Consider When Buying a House?

Elena: Now, another question that usually concerns the newbies “so to speak”. What if a person has no idea as to the undercurrent of home-purchasing, home-buying. Where to go? What to do? A completely “blank page.” Are there any legal matters, legal issues that such a person needs to consider, or maybe even get the legal advice prior to looking into buying a home, and of course, prior to purchasing a home consequently?

Ty: Yeah. That's an incredible question and I know why that should worry a lot of people. Because there is a lot that can go wrong. And that's why most people use either an attorney or a realtor, especially when they're buying a house. Right? Because a seller could somehow trick you. That makes you think you're buying the house, but you're really not. And then they get all your money or whatever else.

But really right now, the big thing is wire fraud. For those of you who don't know what wire fraud is, that's where an outside party tricks the buyer into wiring their down payment to them instead of to the title company. So in most situations when this happens, the buyer loses that money, and of course, they can no longer buy that home. So for most people, this is tens of thousands of dollars, but for some people, it's hundreds of thousands of dollars.

The good thing about having a realtor or an attorney there is, they are going to walk you through the appointment. I tell them personally, and I send an email as we get closer to closing, "Hey guys do not wire your money to anyone until there's a phone call made. And then as soon as you wire that money, you need to verify with the title company that they have received that money because you have to catch this within minutes." There was a real estate agent up in Park City, Utah Park City is a more expensive area.

I mean, Michael Jordan had a home up there, Will Smith a lot of these big stars, buy homes up there. Anyway, this realtor was actually working with a friend to purchase a million-dollar home up there. The friend had sold her house and received all of her equity, which was a couple hundred thousand dollars. Which she was going to put down on the million-dollar home. Right? You'd want to do that.

Well, someone intercepted and sent the ... Her client, just the day before closing I believe, or the day of closing sent her an email saying, "Here's your wiring instructions. Let's get it going." So the client tried to call her realtor friend, but her realtor friend was actually in a class, a real estate class at that moment.

So she's like, "Okay." Well, she just sent the money and she left a message with the agent, "Hey, I wired the money. Everything should be good to go." And when the agent got out of her class, she saw the message. And she was like, "No."

So she hadn't called the buyer. Called the title company, the title company had not received the money and that client lost a couple hundred thousand dollars of her money. And she lost the ability to buy that house. And the FBI, everybody tried to get on it and get the money, but they did not find it. They couldn't get the money.

And so the sad part of the story is that friendship between that real estate agent and that buyer is ... Has been dissolved. And that buyer is actually suing the realtor over that loss of money. She's also suing the title company and everybody else, because I mean, she's heartbroken. Right? I mean, that's a horrible situation, you wouldn't know what to do.

But basically, everything you've ever built through real estate making her lift her house payments or building that equity, it's just gone. I mean, for a lot of people it would change their life forever in a very bad way.

What Are the Key Issues When Buying a House?

Elena: So Ty, in your opinion, what are the most common issues first-time homebuyers may face? And what are the best ways in your opinion to deal with them? Maybe if you could name us the key three or the key five issues, if you don't mind.

Ty: Especially when you're buying an existing home, most buyers are surprised with the number of repairs it takes to keep the home running smoothly. I mean, especially if you're buying a house that's 25 years or older, you're going to have a new problem pop up at least once a month. And it's just going to be annoying.

Earlier when it's talking about value, that's why when you buy a brand new home, you might pay $10,000 more, but you're getting the value and the fact that you're not repairing or replacing anything for years and years. So, that's one thing to think about.

Also one of the biggest surprises for a lot of people, almost everyone I meet wants this huge yard. Right? "I want this big yard. I want to do this and that and everything." Well, I have two acres and I love it. But let me tell you something, it is expensive and time-consuming. So be careful what you ask for, you might get it. Those are really to me, the biggest surprises for new home buyers.

Should You Invest in Real Estate?

Elena: Well, nowadays there are some people and especially females, somehow it happens, there are even such females amongst my girlfriends, they are staying at home moms and all of a sudden they decide, "Well, you know what? I'm not working. I have plenty of free time in my hands. So why don't I try to sell real estate or to be a real estate investor and make some money on the side?

After all, I don't have to do anything. All I need to do is sit at my computer and look pretty right? It should be nice and easy." So what would you say to someone who decides to invest in real estate? Yes, no, maybe. Should they do it? Shouldn't they do it? What would your advice be?

Ty: So real estate has proven to be one of the safest and best investments ever. So should you invest in real estate? The answer is definitely. So I do strongly believe that you should be investing in the stock market, real estate. Your money in different places. Well, so how to invest in real estate? If you're really young and you have a good job and all that stuff, I recommend buying a house to live in and renting out the spare rooms or a portion of your home.

And after two years, if possible, I mean, it might take you three or four or five years. But after two years of selling that... Sorry, don't sell that home. Turn that home that you currently live in into a rental property. And then you buy another home where you can do the same thing. And if you do that two or three times, you will become a millionaire.

Honestly, I'm actually working on a YouTube video right now that's going to go over this in-depth. And so once again, if you subscribe to my channel, you'll get that notification about that video. If you're a married couple or you have children you want to do it differently. Because it's a little bit harder to rent out a room in your house when you got all your kids there. Right?

Most people don't want to do that. And I don't blame them. So if you're a married couple, you already have your home, and you're thinking, "Man, maybe it's time we start buying a rental property." There's a couple of different options. You could buy a duplex and you can live on one side and rent out the other side.

In Utah, we have basements. So a lot of people will live upstairs and rent out their basement. So, that's a great way to get started that's really, really safe. You could always just save up your money and buy that second property. And right now with mortgage rates at 3%, even though as an investor, you won't get as good of a rate. Right?

Your rate's worse on a rental property than it is on your personal home. And that's going back to... With the young people and I recommend staying in the house for two years, because the next house... You keep that one as a rental, your mortgage rate doesn't change. You still get to keep that awesome mortgage rate. When you buy the new house two years later, you can buy that as your primary residence and once again, get that amazing mortgage rate.

And so that's why if you could do that two or three times and have two rental properties, plus your house or three rental properties, you will become a millionaire. The end is that simple. So you just want to make sure you don't overextend yourself. Right? That's when people are like, "Well, it's dumb to invest in real estate."

If you have 20% down and you have to put the entire 20% down to buy the house and leave you nothing in savings, you're probably making a mistake. Right? Hold on, wait another six months, so you can have... You need savings in the bank.

And then people get too aggressive trying to pay stuff off, trying to pay off the houses. I have an account right now every time I can receive rent, it just stays in that account. And that account just builds up. Well, we won't talk about how much money I have in there. But let's just say I can go six months without receiving payments and pay those. Pay the mortgages on my properties.

And so that's what you want to do. Don't try to get aggressive and pay it off. I know it's tempting, but it's better, you have to protect your investments. There's something I do that a lot of people are afraid of, or maybe even haven't even heard of. And it's rented on steroids. It's called seller finance. And so what I'm doing is, I have a couple of properties like this.

I have some regular rental properties, but I also have some seller finance properties. Seller finance properties are a lot less risky, and I'll need to do a video on this as well. I don't have anything in the works. But seller finance is an amazing program where you purchase the house and then rent it for a year, and after that year, you can actually sell it. But you sell it as you being the bank.

So the people buying it from you, they put their 10% down or whatever to buy the house from you. But you can actually charge a little bit higher mortgage rate. And it's not treated like a rental property because they're buying it from you like you're buying your house from the bank. They have to do all repairs, replacement, all that stuff is up to them. So as a manager, you don't have to manage the property. You just get paid.

What Are Housing Market Predictions in the US for 2021?

Elena: So Ty one last question from me to you for today. It is a bit of, so to speak, philosophical nature. So let us be Nostradamus's, let us take that crystal ball and look into it. So, in your opinion, what would the prediction be for the housing market in the United States for the remainder of 2020 and the upcoming year of 2021?

Ty: That is probably the big question right now. That's probably the biggest thing people are worried about or concerned about. And it would probably take a real wizard to know exactly what to say to each person in their individual situations.

But obviously thanks to the coronavirus, the housing market is going to vary greatly from region to region. So even city to city, you could have a city just 30 minutes away, that's having a completely different experience. Right?

So as we spoke earlier in Utah, home sales have skyrocketed and so have home prices. And that's due to the crazy low mortgage rates, but also because of the severe housing shortage. So another factor driving up home prices is that because of the COVID-19, which we spoke about earlier, people just... I mean, all over the country, people aren't selling their houses anymore. And why?

That's because they're scared or also because maybe they did lose their job for three months. It destroyed their credit, and maybe those people are... Or hopefully all those people able to hold onto that house and keep that house. But they will not be able to buy a new house because their credit's been destroyed.

So they cannot sell that house now and get a new house. And so there's just a lot of reasons why people are not going to sell their house right now. And a lot of conservative people are like, "You know what? We were going to move up to a bigger house, but you know what, let's just stay in this house. If something bad like this ever happens again, we are safe here in this house. With a small house payment, it'll be paid off in 15 years." Right?

So now the big wrench here is mortgage forbearance. And that could really hurt a lot of markets around the country. Now in Utah, we don't expect that to affect us at all really. I mean, maybe just a little bit, but in other parts of the country where the market was already bad, it could be really, really bad.

I mean, it could make things a lot worse. And then in that situation, if you're in a city where things are declining and they were declining before the Coronavirus, it's a situation where you might not want to buy a house yet. When you feel like home prices have bottomed out, that's going to be your moment.

But you have to remember... One thing to think about is that mortgage rates are amazing right now. So, you have to weigh that, if you're in a horrible, horrible market, I wouldn't say buy. I would say not to buy a house yet. But if it's just a stale market, it's just sitting there, then it's probably a great time to buy a house.

And home prices over time have always gone up. So, even if you buy a house today and get this amazing 3% mortgage rate and your home value drops 20%, but mortgage rates go up 1%, you're still sitting in a $30,000 better situation. Right? So that's why I think the mortgage rates are different right now.

But please, please, please, if you buy a house right now, please keep six months of payments in the bank, just in case it happens to you. Because the last thing I want to see as a real estate agent is, I don't want to see someone buy a house and see them lose that house a few months later because of something bad. So be wise, real estate is the most beautiful, safest, best investment that you can have.

But you cannot put every dime down just to get the house because you're putting yourself in a very, very dangerous situation. Even if you think the money's coming, you just can't do that. So I just recommend if you want to buy a house, study your local market, if you feel good about where things are and where things are going, then I think you should move forward. And you always start by talking to a lender first to make sure you qualify for the house.

But like I said, because we're living in these crazy times, I only recommend that you buy a home if you have a very stable job, little to no debt. Do not buy a house if you have $50,000 in college debt. You can't do that. And then of course, like I said earlier, just make sure you have, I'd say at least four months, but I feel better if you had six months of house payments.

And you got to remember with house payments, it's not just that $1,500 or $2,000 per month house payment. You need to consider utility bills and other costs that come with your home. So just make sure you have that in savings before you move forward on the purchase of a home.

As a final point, “Retire Early and in Style”

Elena:Wonderful advice. Thank you, Ty. So the matter here is, the conclusion here is, be wise. Right?

Ty: Work hard so you can buy real estate as an investment and build yourself a beautiful nest egg. So you can retire early and in style. Right?

Elena: I like that quote of yours. I'm definitely making a note of that. Retire early and in style. I'm definitely going to say that to my husband, "Honey, we're going to retire in style."

In this video interview, we discussed the real estate industry, the key points you should consider when buying a house or investing your money in a house. Ty Wilde, the real estate expert, helped us answer top consumer questions about home building, home buying and home selling. We thank Ty for his professional opinion and advice!

If you have questions about real estate that you’d like Ty to answer, please comment below.

For more expert tips, please visit PissedConsumer YouTube channel, or read interview articles here.