Pod Insights The Personal Finance Podcast The Housing Market Is Rigged (Here's How to Beat It) With David Sidoni About this episode What if the thing keeping you out of the housing market is not the market at all but the advice you have been given?
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What You'll Learn in This Episode
Why the 20% down payment rule is outdated and what first-time buyers are actually putting down today
The zero down loan options that still exist in 2026 and who actually qualifies for them
Why PMI is not the devil and the real math behind what it actually costs per month
How to stack down payment assistance programs, seller credits, and rate buydowns to dramatically cut your upfront costs
The six-column formula that shows why waiting for the market to crash is costing most buyers more than they realize
How seller concessions work and exactly when to ask for them during the negotiation process
The one housing market stat that matters more than interest rates or home prices
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Tool/s Mentioned
Total Cost of Ownership Calculator https://mastermoney.co/total-cost-of-ownership-calculator/
Episode/s Mentioned
PMI Is Not the Devil
He Built A BILLION DOLLAR Real Estate Portfolio (Here's How!) with Brandon Turner
How to Make Money In ANY Real Estate Market
Why Live-In-Flips May Be the Best Way to Invest in Real Estate with Carl and Mindy Jensen
Watch Next
Focus on THIS in Retirement (Everything Else is Noise) https://youtu.be/afrCCLz4aJ4
How to Build Your Investment Portfolio (The Portfolio Pyramid!) https://youtu.be/Vn-NXfFWtfU
How to Invest Your First $10K https://youtu.be/GCW1lfujZ2I
The Financial Priorities That Matter Most (By Life Stage) https://youtu.be/h2WFjoekghE
AI Is Coming for Your Job. Here's How to Prepare Financially https://youtu.be/fC86BKAUBxc
Connect with David Sidoni
Instagram - https://www.instagram.com/howtobuyahomepodcast
Website - https://howtobuyahome.com/
TikTok - https://www.tiktok.com/@howtobuyahome
X - https://twitter.com/davidsidoni
LinkedIn - https://www.linkedin.com/in/davidsidoni
YouTube - https://www.youtube.com/@HowToBuyAHome
Apple Podcast - https://podcasts.apple.com/us/podcast/how-to-buy-a-home/id1455257747
Spotify - https://open.spotify.com/show/0vhUO6Sg4XSC1TAZC6Xy7k
Connect with Andrew
Instagram → https://instagram.com/mastermoneyco
Website → https://mastermoney.co
TikTok → https://tiktok.com/@mastermoneyco
X → https://x.com/mastermoneyco
LinkedIn → https://www.linkedin.com/in/andrew-giancola-45027b340
YouTube → https://www.youtube.com/@mastermoneyco/
Question for you:
Are you currently waiting to buy a home or actively trying to get in? Where are you on the home buying journey right now? Just starting, actively saving, under contract, or still on the fence? Drop your stage in the comments and tell us what your next move is.
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Transcript 10,559 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Andrew Giancola? Now, if you watch this podcast on Spotify, Apple Podcasts, or YouTube, you've probably noticed the wood slat walls behind us. We wanted this podcast set to look professional, but also not be a project that was overly complicated. And I found these slat walls on Wayfair, and it completely changed this space. And it's now basically the background that you see in every single podcast or piece of content that we record. And that's one of the things that I love about Wayfair. You can shop thousands of products across different styles and budgets, use customer photos and reviews to see how things actually look in real homes, and find something that fits your space. They also have Wayfair Verified Products that are hand vetted by product specialists using a 10-point quality inspection.
0:44 Andrew Giancola? And with more than 20 million verified 5-star reviews, you can feel a lot more confident about what you're ordering. I've used Wayfair for this studio and our home, and I absolutely recommend them for your space. So transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5% back on every single purchase. Head to wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R dot com. Wayfair, every style, every home.
1:17 Speaker 01 Wayfair, every style, every home.
1:20 Andrew Giancola? When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with HostingR's AI Website Builder. I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And HostingR doesn't stop at launch.
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2:28 Speaker 02 The American dream is being crushed by PMI. PMI is not bad. People think, oh, I'm going to wait for it to crash. Well, once the buyer sees an interest rate they like and they get out there, the market's going to adjust. A 10% correction has only happened in 2008 in the last 90 years. So then what you have to do is you have to understand the other side of the math. People look at the difference now between renting and buying and they think that's the one economic factor. That's the signal because the American dream, it's not gone. It's just hidden.
3:03 Andrew Giancola? On this episode of the personal finance podcast, the housing market is rigged. Here's how to beat it.
3:16 Andrew Giancola? What's up everybody and welcome to the personal finance podcast. I'm your host Andrew, founder of mastermoney.co. And today on the personal finance podcast, we're going to be talking through the housing market is rigged and here's how to beat it. If you guys have any questions, make sure you join the master money newsletter by going to mastermoney.co/newsletter and don't forget to follow us on Apple podcasts, Spotify, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to help out the show, consider leaving a five star rating and review on Apple podcasts, Spotify, or your favorite podcast player. Now in today's episode, we're going to be doing some really cool stuff because
3:59 Andrew Giancola? in the first half of the episode, I'm going to be talking through some really creative ways to buy your house and creative ways to buy your personal residence. And for a lot of you, this is going to be a thought exercise. I want you to generate ideas from this because right now, as we're recording this episode, the housing market is hectic. There's a lot of sellers right now that are sitting on their house. And they're not moving their prices and they're not budging. What's happening here is a lot of folks are not able to buy a home because those prices are staying stable. Secondarily, as we are trying to build more housing, but we're not doing it fast enough. And for a lot of folks out there, we are seeing a big issue when it comes to the supply in the housing market. So what I'm going to do today in this episode is first, I'm going to dive into some really
4:42 Andrew Giancola? creative ways that you can consider buying a house. Now, for a lot of you out there, you're going to be like, I can never do any of those different things. Those are just way too far out of left field for me to consider. And that's A okay, because in the second part of this episode, we're going to welcome in David Sidoni. And David Sidoni is actually a home buying expert, and he is going to walk through some creative ways to actually finance a home to make the numbers work. And he has some super valuable insights that I know you're absolutely going to love that are going to help you through this process. So if you're like, I just want to go the traditional route, but I want to find some creative ways to finance a house. Well, the second half of this episode is going to be perfect for you when we welcome David in. Now, in the beginning of this episode, we'll kind of dive through a bunch of different strategies that I absolutely love.
5:26 Andrew Giancola? And we've interviewed some people on this show who have done a few of these different strategies. And in addition, we're going to pull some strategies from real estate investors, because when it comes to real estate investing, you have to get creative, but you can also utilize these when you buy your personal residence. And so I'm going to talk through a number of these different scenarios. Sometimes when the market is very difficult to figure out what to do next, sometimes you just got to get creative. You got to figure out what you should be doing. But then again, you want to think outside of the box as well. So we're going to do that today. And the reason why we have to go through this is because since 2019, the income needed to buy a single family home has nearly doubled. And I think this is why a lot of us feel the pressure to, if you are trying to buy a house, you're saying to yourself, well, I feel like I just don't make enough money
6:09 Andrew Giancola? because you would have nearly had to double your income since 2019 to be able to do this. And a family needs to make $110,000 a year to own a home today, which is about 29% higher than what the median household actually earns. And so this is why it feels so difficult. This is why you feel like there's so much pressure on you to own a home because it Twenty-nine percent higher than what it used to be. According to Harvard's Joint Center for Housing. And I think this is something where, when you think about this for a second, only 6 million of 46 million renters out there can actually meet that standard. That is a big deal. And high home prices and interest rates have pushed existing home sales to their lowest level and over the course of 30 years. People are not able to buy a home right now,
6:52 Andrew Giancola? and it's because of those income thresholds and some of these other things. So this is the reason why I want to get creative with you guys. This is the reason why I want to have this conversation. And when you run the numbers, this is going to help you think through this. Now, I want you to understand a few things before we dive deeper. I want you to first understand that we want you spending 30% or less of your income on housing costs. In reality, if you can get it even lower, and if you want to retire early, I would go for 25 or less if you are trying to achieve early retirement in your 40s or early 50s. This is because your housing costs, if they are too high, will eat into your overall budget and you will feel like you're house poor. It is going to feel like your finances are burdened if you go above that 30% level.
7:36 Andrew Giancola? And in fact, in 2025, the number came back that someone who makes $104,000 per year in household income would need to spend 34% of their income just to cover their mortgage payment. This is not including additional housing costs, but you need to make sure that when you're thinking about this and you run the numbers, you want to make sure that it's less than 30% of your income. What does Andrew mean by running the numbers? Well, let me tell you, because this is something that most people do not do on their biggest purchase overall, is they do not run the numbers and they do not run total cost of ownership. So if you go to mastermoney.co/resources, we have a total cost of ownership calculator there that can help you through this process and help ensure that you are making the right money moves when it comes to buy versus rent.
8:21 Andrew Giancola? What happens there is you can run the numbers on a house that you are looking to purchase, and it will tell you the difference between buying versus rent. In addition, we'll also just help you think through, is this something that I can actually afford? And so I highly encourage each and every single one of you to run total cost of ownership before you dive deeper. All right, so those are two parameters before we dive into some of these creative solutions. Then we're going to welcome David into the Personal Finance Podcast. So if that's something you're into, let's get into it.
8:50 Andrew Giancola? So David, welcome to the Personal Finance Podcast.
8:53 Speaker 02 Thank you so much for having me. I'm really excited to be here.
8:56 Andrew Giancola? I am so excited to be here because you are basically a home buying expert and you have this fantastic show, basically teaching first time home buyers how to buy their first house, but also even experienced home buyers can learn a ton from your show. So I want to dive deep into creative financing today because this is an area that I think a lot of people don't realize that they can buy a house in some very creative ways. There are very creative ways to get financing on your home and especially in 2026, a lot of folks right now are trying to figure out, oh, should I be buying a house? Should I not be buying a house? How can I actually do this where it makes sense? And so today, we're going to be diving into creative ways that our listeners can kind of understand exactly what to do here. So the first thing I want to start with is if someone doesn't
9:37 Andrew Giancola? have 20% down, because a lot of places right now, they'll say, hey, you gotta put 20% down, otherwise you shouldn't be buying a house. But if somebody doesn't have 20% down, what are the real options on the table today?
9:49 Speaker 02 Well, you bring up a great point because the 20% down is an old rule that was made up by crusty dinosaurs and it was before rents had the incredible increase that we've seen over the past 20 to 25 years. And there's two things about it. Can you buy a house? That's the creative side of it. And then what do the numbers look like should you buy a house? Starting with the can you buy a house? There are so many misconceptions about down payments. So that 20% down, it was created by banks. It's an imaginary number and it doesn't have anything to do with what real people are doing. The average home buyer, and this includes the people who have tons, hundreds of thousands of dollars worth of equity who are selling their home and
10:28 Speaker 02 buying a home, all home buyers, the average is only 15.2%. And the average for first time home buyers, last year was a 9% down payment. Traditionally, that's between 6% and 7%. And that includes that low 9% number. That includes the first time home buyers who are getting a big gift from their parents. So a lot of people, first time home buyers, most of the ones that we see, the tens of thousands of people every year now, it's a 3, a 3.5 or 5% down payment. But that 20% headline, it's out there and I don't know why. It blows my mind.
11:06 Andrew Giancola? It's one of those areas, I agree, where you see all these people talking about 20%. And I go think back to the first time I bought a house and I didn't even put 20% down on the first time I bought a house. So for a lot of first time home buyers, I give them, you know, there's grace here. There's a grace period where I do not think that you need to put 20% down. And we'll talk more about some of these creative options here. Even for someone who's rolling equity into another home, there's a lot of cool stuff that you can do here. I want to start with, and we'll talk about the 3% and 5% down too. I want to start with the 0% down. Are there any 0% down options for people out there? And do those actually exist today in 2026?
11:40 Speaker 02 The number one thing is VA loans are right now probably the best loans available for any first time home buyers. That's for your eligible military people or veterans. And I see military people that are moving around the country and I'm like, man, using a VA loan, if they're moving every two or three years from base to base, by the time they're 28 or 30 years old, they could have two or three homes and they'll easily cash flow for the rental, even if they're only putting 0% down. So zero down options for VA. The other option is something called USDA loans. Those are for more rural areas. Occasionally, they seep into suburban areas, but those two
12:20 Speaker 02 loans have been there forever and they are real. The things that kind of ebb and flow with the tide of the market, one of them is called a physician's loan. A lot of people will look into it and realize that maybe they're better off to put a little bit down, but there are zero down physician's loans. And the myths about it and the misunderstanding is because it changes all the time. The banks will change what they're offering. And in 2026, last year, we saw kind of a bifurcated market, a K market. We had half the country going up and half the country going down. And the places where it's going down and/or up and on the other side too, where it's
13:00 Speaker 02 difficult to get in, a lot of credit unions are starting to offer these local only zero down. So it's available. It just takes a little more work. What we're finding is that when you're working with a first time home buyer specialist, a mortgage broker, they can help you find those options for you. And You know, originally, we've had some people that came to us that they were originally told by one lender that they needed a 30% down payment. When they got one of the experienced team, they found out they had a zero down option. So it's definitely about finding the right local pros in your area who understand the ebbs and flows.
13:38 Andrew Giancola? Wow. And I think that's one, or David and I have talked about this off air to a number of different times. It's in real estate especially, there is a lot of people who just do not understand personal finance or finance in general and the optimal way to kind of buy a house where a lot of folks out there will say, hey, you know, you can only have 30% down. That's the only way you can buy a house. That's just someone who is uneducated or they're trying to push someone into a product that is going to help them make more money. And so you really have to know this stuff. It is very important that you understand, you know, that these loans are available to you if you're buying a home, because if you have that education, then you, when someone says to you, hey, the only option you have is 30% down, you're going to say back, hey, I already know this. I listened to this podcast with Andrew and David and they told me that there was something different here. And so I think that's one of the most important things in this real estate industry right
14:22 Andrew Giancola? now, is people need to get educated on this stuff, because exactly what you're talking about, it'll happen. So basically what you're saying is the 0% down loans, they could be shifting all the time. We always have the USDA and we always have the VA loans. And the other loans are kind of shifting based on what the market is doing it essentially. And it's kind of dependent on your specific situation.
14:39 Speaker 02 Exactly. And it's always been that way. You know, when I started in real estate back way back in 2006, all of a sudden people like, hey, the FHA loan is back. Now that's traditionally a 3.5% loan. During the run up, a lot of people weren't using it. But during the crash of 2008 to 2012, almost every first time home buyer out there was using a 3.5% FHA loan. It's the same with the zero down products. Individual lenders that are trying to attract people. But I think the key, especially for your listeners who are savvy people who are looking at their whole money, is that people will stop because they create a number. What they don't realize is a 5% down payment, a 3% down payment,
15:22 Speaker 02 using some of the things that we'll talk about coming up, your grand total might be a 1% down payment. And what people do is they try to save up to a number that a mortgage calculator gave them based on three pieces of information, and they delay their own process.
15:38 Andrew Giancola? I love that. I think let's do that now. Let's talk through the three and the 5% options and what we have available there. So what are some of the good low down payment options that people have available? There's obviously the FHA, we have conventional loans, those types of things. Can you kind of explain which ones are out there and what the down payment methodology is behind that?
15:54 Speaker 02 Well, 3% down payment is with what we call a conventional loan. So, most people who are going out, if they're going to put 10% down, 20% down, or 30% down, they're going to get a conventional loan. Well, a lot of first time home buyers and new buyers or uneducated buyers don't realize, and it's not their fault, no one's out there teaching it, is that 3% is a traditional first time home buyer loan, and it's the one that most of them use. Now, if they're struggling, or they have a higher debt to income ratio, and if their credit scores aren't great, that's where the FHA is a really good product for you. That's the 3.5%. I know a lot of buyers, and I've worked with a lot of buyers, that are putting 30 or 40% down, and FHA makes sense for them as well. That's the thing is to understand
16:39 Speaker 02 that if you're savvy, and your people that you're working with are savvy, there's creativity, conventional 3% and conventional 5%. Now, here on my show, I've been coaching for years, let's do 8% as your target, 5% for your down payment, and 3% for your closing costs. And what is shocking to the people who do that is when they're working with a team, say they've only got 4% saved, while they're saving up, a lot of the buyers that come to us, and buyers that I've worked with for 20 years figuring all this out, they end up paying 50 or sometimes 70% less than what they punch into a mortgage calculator online.
17:19 Speaker 02 They don't pay that full 8%. And that's where the low down payment strategies, on top of picking your down payment first, then you add the strategies.
17:29 Andrew Giancola? That makes sense, and I think it's going to be the biggest thing that we see for most people out there, is understanding those pieces and getting educated behind this. So let's say someone is wanting to do one of these strategies, maybe they're trying to decide between a conventional or an FHA. What would you tell them to look at, depending on, is it depend on their credit score? Like, what kind of credit score would they need for each and every single one of these? And is that a big, big factor when they try to make their decision?
17:54 Speaker 02 Well, the biggest mistake that I see first time homebuyers make is not having this type of conversation with a mortgage professional early, starting with a Realtor that can help you find a mortgage pro so that you have a cohesive team. They both work with each other. And what happens is people save up and then they call in and they ask the questions. Well, at that time, we might be trying to put, you know, a square peg in a round hole, just trying to get you an approval because you saw an open house and now you suddenly decide to call someone. What you can figure out is, okay, three and a half percent down, yes, you're going to be able to use with an FHA a lower credit score. They say credit score is as low as 580. Now, my advice to someone like that is, you can buy a house
18:35 Speaker 02 with a 580 credit score and a 50% debt to income ratio, but should you? So if you reach out early enough, maybe we take six months to build up a little more savings, and also to build up that credit score. And now, if you do that in six months, you still may find FHA products is better for you. So a lot of times FHA works for people that have higher debt. So a lot of times we use this for people with big student loans, if that monthly payment is large. But if you're coming in and you've got, let's say you've got like about 15% down, that's where I say get out and talk to somebody. And then you can compare and contrast a 3% conventional, or a 5% conventional versus that three and a half FHA.
19:18 Andrew Giancola? When someone is thinking about this, and I can already see these questions coming in, and there are things that a lot of our listeners would kind of ask about is PMI. And PMI is a big area for a lot of people because they say, hey, if I put less than 20% down, how big of a deal is this? Am I going to have to pay PMI forever? Is this thing where I'm just stuck paying this extra payment within my house payment? And/or is this something that can go away? Is it really as bad as people think? Or is this something that you can kind of work through and figure out?
19:44 Speaker 02 If I won the lottery tomorrow, I would pay a PR firm to put me everywhere in the world to tell them that PMI is not bad. I have a podcast from 2022 called PMI is Not The Devil. I am so mad at the Dave Ramsey's of the world and the old people that put this out there. This is, here's the math.
20:08 Speaker 02 And, and I'm saying this out of love, even though I sound like I'm frustrated. I'm frustrated because the American dream is being crushed by PMI. Here's the math, on a $300,000 home, PMI is between 25 and $60 a month, depending on your loan amount and your credit score. $500,000 home, 35 to $100 a month. $700,000 home, it's $55 to $140 a month, and it's temporary. It goes away. So a lot of times when people come in and say, David, I would like, I did an example on a recent podcast. I want to buy a $450,000 home. We got like 15% saved and we run, we run the numbers. It's 2,900 a month based on today's interest rates. So we're going to keep saving up because we don't want to pay that lousy PMI.
20:52 Speaker 02 And I'm like, okay, well, it's 2,900 a month to 20% down. It's $2,600 a month. That's the difference just in the loan. So that's $300 difference with a 10% down payment. The PMI is only 60 bucks. So it's a $360 difference. And if you're putting 20% down or 10% down, that's 90 grand on a $450,000 home versus $45,000. You could keep $45,000 in the bank and only pay $360 difference every month. With 45 grand in the bank, which helps people avoid the number one thing they want to avoid, being house poor. 45 grand could supplement that $360 extra for 10 years.
21:36 Speaker 02 And think about it, even if you could save $2,000 a month, you're sitting there and you know, you're at 10%, you got 45 grand. If you save $2,000 a month, it would take you two years to save up the other $45,000 just so you can save 360 a month. Now, I don't even preach, it's only 60, it's only 60. I always make sure that we do the full extra loan amount. But still, even that math, it's preposterous.
22:03 Speaker 02 PMI isn't the devil. PMI is a privilege. PMI is a way for you to get into. And that part of it, I understand because this is the can you? And then the should you side? That's a whole different equation that we can get into later of what are the benefits of owning with a low down payment versus renting for two or three years until you can get to that magic 20%?
22:26 Andrew Giancola? Sure. And I think that's where a lot of people need to run this evaluation, run the calculation based on their situation to understand exactly, exactly what you're talking about here is to see if that fits your situation. So when does it make sense? Hey, putting three and a half, maybe, you know, three to 5% down. When does that make a lot more sense than just looking at something and putting 20% down traditionally? Is there a scenarios that you've seen time and time again where that does make more sense than maybe just putting that 20% down?
22:50 Speaker 02 Well, you're a finance guy, so I'm sure you've seen people who say always have a mortgage, never have a mortgage. Right? Those arguments work and that will depend on your own risk tolerance, what you want to do. Are you going to invest other money? There's math for either way. But I have had many, many people that have either listened to a podcast episode. I do a PMI episode and a low down payment episode and a rent versus buy episode every single year. And it's never been more important than in 2026. And when people run those numbers, I've had a lot of people that might listen to you or other financial people who are offering them advice about something called leverage. And they might realize that even at 6%, they'd much rather have money in the bank, which what makes them not house poor?
23:35 Speaker 02 So a lot of people will decide to go ahead and go with a three or a 5% down payment. Once they see the full math of the benefits. Now, here's kind of the basics. It's different for everyone. That's number one, but are you renting for the average rent in your community? Well, traditionally, an average starter home has been about the same as that rent. Now, in the past few years, that's kind of gone, maybe the PITI, the principal interest taxes insurance, full payment is 500 more or 800 more or a thousand more. That's when you really need to understand all the rest of the numbers. But in general, it's most of the people who see that they'd rather have cash to the bank, they'd rather leverage.
24:17 Speaker 02 And they also have an in-depth understanding that the first Three years of owning a home, that's going to be the hardest time that you ever own a home. After that, it gets easier and then you weigh the benefits of that versus continuing to rent and lose potential benefits and lose the number one thing about owning a home and that's your time in the market.
24:38 Andrew Giancola? I love that. I think that's the, the number one thing. It's, it depends on your situation and it depends on you actually doing the math, running the numbers, which is the biggest thing that David and I have talked about in the past too, is especially I went on David's show as well. And we were talking through, hey, you gotta run the numbers when it comes to understanding your specific situation. So you do not become house poor. That's the biggest we want most people to avoid is becoming house poor because there's no more stressful situation than when the roof over your head is the thing that is causing you the most financial stress. And I think for most people out there, once they learn this concept, it'll change their life forever. Most people just don't run the numbers on the biggest purchase they're going to make in their life, which is absolutely crazy to me. And I think that's really, really important. So can people, you know, there's a lot of down payment assistance programs out there. There's a lot of other things that you can kind of look at.
25:22 Andrew Giancola? Can people kind of stack some of these programs? So maybe they do a low down payment program and they do down payment assistance. Is this something that they can kind of stack together or is there ways for you to combine some of these to get even more creative?
25:34 Speaker 02 Yeah. When you're looking at, again, looking at the down payment assistance, you, you have the down payment assistance. You also can be looking at negotiated seller credits. It can be the same thing as the down payment assistance. In 2026, this is going to be huge. Zillow just changed their forecast for this year. They dropped it down to 0.5% appreciation. Well, a bunch of sellers out there, Christmas time, they were all excited to sell their home. They're thinking about selling right now. Well, they're going to get a nice sticker shock when they realize that they can't up the price 25, 50, a hundred thousand over, you know, Betty's house down the street last year. What that means is there's more room for those negotiated seller credits.
26:14 Speaker 02 There's more room for down payment assistance programs and you can stack them. You don't have to use just one. A lot of people don't even look into it because they think that they make too much money for down payment assistance. That's not true. We're seeing a lot. There are over 2,500. There were 70 new ones that came out in the fourth quarter of 2025. They are consistently adding them. And what we see is people stacking the down payment assistance, maybe using a seller credit. And sometimes people use that seller credit to do what we call a mortgage interest rate buy down. That's a lot of math. And again, the whole point is gain. Planning to buy a home and starting a year earlier, that's where you save the money. It's not talking to someone a month before and figuring it out.
26:58 Speaker 02 We're 15 minutes in and I've just hit the tip of the iceberg on what you can do. I've seen people that have used down payment assistance programs. We've had people that come on this, on our show. There was a couple that bought a duplex for $12,000 all in because they used down payment assistance. There were people that are buying $450,000 homes, 25,000 bucks all in. And a bunch of them, 10,000 and 5,000. And I'm not saying everybody can do this, but I've had single moms that have stacked that are like less than a thousand bucks. I had a couple that stacked. They bought a $275,000 home, but it literally cost them $120.95.
27:37 Andrew Giancola? Wow.
27:37 Speaker 02 All in. And one single mom, that interview was, she was so funny. Love her to death. Single mom, later in life, children and was like, well, once you talk to the people and then her team helped her find down payment assistance, she did a little research. She bought a $313,000 home for $31.25. Now, I don't think everybody can do this, but I do know that if you're not calculating in one of those three strategies, your all in or potentially even your monthly payment is probably a lot higher than most people who work with the right team, what they find.
28:16 Andrew Giancola? I love that. And I think, let's dive into the seller credit portion because I think this is a big piece for, for right now specifically. I think a lot of people can take advantage of seller credits and some of the things that you can do and rate buy downs and some of the other areas that there. So if someone doesn't, A, if someone doesn't know what seller credits are, can you explain what they are and can you explain how they work in today's market?
28:35 Speaker 02 So if you're looking at a $400,000 home, I do a lot of my examples around 400 or 450 because that's kind of the median price that we've been playing with for the last 12 months or so. Sometimes there are savvy lenders and God bless them that will talk to the first time home buyer and say, Okay, they want 400,000. The prices right now are pretty good here. I think we can get the home to appraise. Instead of offering 390 and then trying to negotiate back and forth, let's offer 410 with a $10,000 cash credit. Everybody understands how cash back works on credit cards? Same thing. So we're going to offer 410. Now you get that cash back. Now, what do you want to do with it? One, you can reduce, that can go directly into your down payment,
29:18 Speaker 02 and that will reduce your down payment, the total you owe there. Two, you can use it for your closing costs, same principle. But the third one that's really interesting is you can take that $10,000 and pay upfront. People don't realize, most of the mortgages you're being quoted are what we call a zero-point loan, where there's no fees involved. You could take that $10,000 and buy it down a quarter point, maybe even a half a point. And that could be a pretty big reduction in your monthly payment. So, a $390,000 home reduces your mortgage payment, I don't know, eight bucks? Where a $410,000 home, if you got the $10,000 credit and you still paid $400,000 for the home,
30:02 Speaker 02 you might be reducing your monthly payment by hundreds.
30:05 Andrew Giancola? And I think that is one of the most powerful tools overall. For most people out there, they know what the opportunity cost or the time value of money is. And if you can reduce it over, especially if it's a house you're going to stay in long-term, if you can reduce those payments overall during that timeframe, it is a big, big difference to get, you know, buy down those points and make sure that you're kind of reducing the overall interest rate that you were paying on that home. So for those of you out there, if you're in an environment right now where you're thinking through and saying to yourself, man, the interest rates are just still too high for me. This is one of those things that you can do and one of those tools that you can do to help you kind of reduce the overall monthly payment to make it affordable. Because a lot of times on this show, we talk about, hey, we want you to make sure that your mortgage payment is 30% or all your housing costs are 30% or less of your income. And this is one of those ways that you can start to maneuver towards that direction
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36:18 Speaker 02 The biggest thing to understand about seller concessions is that, depending on how it's negotiated and when it's negotiated, the home will still have to appraise for that value. So if you do it upfront, the example I just gave, instead of offering 400 to give them their list price they want right now, you offer 410 with a $10,000 concession. Now, what that means is there's no money exchange at that time, but the net to the seller is, is as if you came in and offered a $400,000 on the house. What we're hoping is that the home will then appraise for $410,000 and then you're going to get that concession from the seller based on the total amount that you're going to pay for the house. Now, the other big thing about seller concessions,
37:03 Speaker 02 negotiation, one of the things that first time home buyers don't realize is they want to grind so hard on that initial, let's figure out the price and they're going back and forth and back and forth. Hey, guess what? You're not done. That's the very first negotiation. If the appraisal comes in low, you're under contract for the home, moving boxes packed. There's a whole second negotiation. If you really ticked them off during that initial grinding them down for like $750 or a thousand dollars on their initial price, they're not going to be as apt to be as graceful with you going into the next level. But the big one that most people know about is home inspection. Once you do a home inspection, seller concessions can come back to you in the form of a credit.
37:47 Speaker 02 A lot of people think that what you're asking them is fix this, fix that, fix this. I personally don't recommend that because number one, they're going to fix it with their guys, their way. And number two, you don't get to inspect that stuff till after you've removed your contingencies or your conditions or your due diligence, which means that your deposit is now gone. You can't back out of the deal. You do that walkthrough, checking up on the inspections later, sometimes three to four days before you're actually supposed to get the keys to the house. So one of the big concessions happens after the home inspection. Now, I've had a lot of buyers who find some big ticket items and they figure out, you know what, they asked for 10,000, they come back at five and they end up getting a $7,500 credit. Doesn't mean you have to put that stuff into the house.
38:32 Speaker 02 You could get that 7,500 credit, realize those things need to be fixed and use some of that money to pay down your closing costs or use it for a mortgage interest rate buy down or for your closing costs.
38:43 Andrew Giancola? I love it. I think that those are such valuable tips for people out there is when they get through this process, just realizing that, you know, this is just layer one of multiple layers of negotiation. And it's really important to make sure that you understand this entire process and get educated on it, like what David's talking about here, so that you understand, you know, when to get aggressive and when not to get aggressive in some of these negotiations. And guess what? Most of you out there might be dealing with an agent who is not as good at this as like someone like David right now, who's explaining this. There are agents out there who just don't have an understanding of even the negotiation process and how to do this. So it's really on you to make sure that you're kind of commanding some of this as you go through this process. It's very, very important or find the right agent who has a lot of experience in doing this in the past. So this is very, very important to note for sure.
39:25 Andrew Giancola? So if you had to choose between something like a lower price or a rate buy down, how would you think about that? Or how would you choose between those two?
39:34 Speaker 02 First and foremost, it doesn't matter what I say because that's a black and white question and the answer takes about 30 to 45 minutes of understanding not only your entire financial picture, but your, your personal goals. What are you using this house for? How do you, I've had a bunch of people I've interviewed recently that used what you know, the old crusty dinosaurs would think is terrible. They're using adjustable rate mortgages to get a lower payment right now. That's the way that they're getting their lower monthly. Well, they're smart people, probably listen to your show. Those are the type of guys that understand, I have seven years to adjust and work before the adjustable rate mortgage adjusts. That was, I said adjust like 15 times there, but that's the way it works. But in general, I would say
40:19 Speaker 02 that if you are starting the process and you should know ahead of time by working scenario A, B, C, and D, based on your credit score, the amount of savings that you have, if your monthly payment is really important to you, then you might look at using that concession for a buy down. A lot of times, I think the biggest thing, the most general answer, Andrew, is that people go crazy trying to get them to give all these concessions to lower the price. It's a 400, 500, $800,000 loan. Lowering the price 10, $20,000 really does very little for
40:59 Speaker 02 you. The idea that cash can come back to you and then you can utilize it either way, that's what's most important. Now, there are some people that, like I said, we talked about the FHA loan, bringing it all together here. There are a lot of times people will opt for an FHA loan because it has a little bit more upfront fees, but many times, depending on the market, it has better interest rates than someone looking at a conventional loan. Pretty much the same area, 3% to 5% or 3.5% down. So a lot of times people will take that concession and they'll use it to pay the extra upfront fees on FHA and that works out to be a lower payment without even technically doing a buy down. They're just using a different loan product
41:41 Speaker 02 to get a better rate, which completely is dictated on how the mortgage markets are reacting at that
41:49 Andrew Giancola? Exactly. I think that's, that's a huge key in and of itself is I think most people just need to understand that portion and kind of go through this in a way where, you know, once you, once you understand kind of how all this works, it's going to change your perspective on just buying houses and the structure and the way to think about this, where you get some of those lower rates. Like you said, having an adjustable rate mortgage, well, if it's not shifting over the course of the next seven years, the biggest risk you're taking is that it does, you know, the, the interest rates do go up for a prolonged period of time, which never happens for seven years, usually historically. And usually we use a ton of historical data on, on some of that stuff. So I think that's really, really important for a lot of people to know when they go through this. Now, I'm going to give you a couple of scenarios here. If you were going to structure something, like let's say someone comes to you and they don't have a lot of cash on hand. They don't have a
42:31 Andrew Giancola? lot of cash saved up. And let's just say in this scenario, you know, this person, maybe they're having, you know, a baby on the way and they just got married and, you know, this hit them out of the left field and they didn't know this was going to happen, but they want to put down some roots. They want to go out and buy their, their first house here, but they have a high income. They don't have a lot of cash, but they have a high income. What would you tell that person to do?
42:49 Speaker 02 First thing I would do is we would look at their numbers right now. Um, you know, if you're, if they've got a high income and they're renting for three grand a month and a potential home purchase was 4,500 a month, I would ask them, is the three grand a month place that you're renting, is that going to fit your lifestyle that you want for the new marriage or, you know, possibly a growing family? And then we look at that $1,500 difference by using a low down payment, a 3% or a 5% as the $1,500 extra. So number one, they have complete control over their life. High income people see more rent hikes than lower income people and they're crazy. I mean, I had someone in Boston who, this was three
43:33 Speaker 02 or four years ago, someone I interviewed for the show. His rent went up 60% and there was a potential increase for 90% for the following year. So he did what a lot of times I'll refer to as kind of a lateral move. He went from a two bedroom, or they went from a one bedroom apartment to a larger two bedroom, two bath condo with the idea that they would eventually keep this as a rental. So that's one way to look at it. The main thing that I want to look at is $3,000 a month in rent. You're going to pay more, but let's break down the entire situation for you and let's try to get you in as soon as we can. Maybe with a 3%, maybe with a 5%.
44:14 Speaker 02 So I'll start them with an 8% conservative number, 5% down, 3% closing costs, and we start a savings plan. Now, one of the things we're going to look at while we're doing that is, are you contributing above and beyond a 401k that's matched by your employer? Are you investing in other investments? Are you investing in other retirement plans? Maybe there's a six-month hiatus on that so we can build up, so we can get to that down payment that we need to buy a home. Now, after that would be another 30-minute conversation where I explain the math and the benefits of homeownership. Because even with one year, if you're renting for three grand and you're at 4,500, there's math that shows that the buyer comes out ahead.
44:58 Speaker 02 And that, of course, all goes back to the biggest thing about any sort of investing, it's time. You know, that old thing, Andrew, that they talk about, that the guy who puts five grand in from 20 to 30 and then stops, and the other person who does it from 30 to 50, that when they're 50 years old, the 20-year-old has way more money, you know, thanks to lovely compounding interest. It's not exactly compounding interest in homeownership, but the numbers work out. So I've been preaching this for years and people think I'm crazy. The American dream has shifted. The old rules don't work. Inflation, the economy, heck, the war, interest rates have jumped half a point this week. You just figure out a way to get in.
45:42 Speaker 02 If you're listening to this show, it's on your mind. I'm not telling this to everybody, but I'm telling you to the people that are listening today, just figure out the way to get in. So for them, I would show them all those options. And then after they see the initial, just the starter point, that's when we start talking about down payment assistance potentials, seller concessions, and potentially a mortgage interest rate buy down, things that could take that 8% to 4% or 3%. And suddenly, they're ready to buy a home in three months.
46:09 Andrew Giancola? I love it and I think that's, that's the big thing and what I love about what you're talking about here is always running the numbers and always understanding where you stand, doing the math, having an understanding of all of your options and then making the most educated decision for your specific situation. The last question I'll ask before we wrap this up is if you were starting over today from scratch, you personally, what would you do or how would you approach this? How would you approach this market? Cause I know a lot of people are just worried of even kind of coming at this market. They're worried about the pricing. They're worried about baby boomers holding houses and they really are not able to even get into some of these houses and they're holding strong in their prices. How would you, how would you attack this market? How would you come at it if you were starting over today?
46:47 Speaker 02 I'm a nerd. I could talk philosophy till I'm blue in the face. It's all math. Number one, you need to understand that the housing inventory is the only stat that matters. I will tell you this, 98% of first time home buyers spend a hundred times more time researching interest rates and prices than they do understanding that low inventory is the one thing that really is the reason why what, what we're having happen with home prices is happening. It's illogical. It's irrational. It does not make sense until you do the math. In 2008, we had 4.7 million homes for sale. Right now we have 1 million homes for sale. And as of today, there's 46.3%, this is
47:29 Speaker 02 an article that just came out yesterday, 46.3% more sellers than we have buyers right now. But the demand for people getting out there is slow. So people think, oh, I'm going to wait for it to crash. Well, once the buyers see an interest rate they like and they get out there, the market's going to adjust. So I would tell people right now, if you were looking to start, the demand is going to eat up the inventory slowly, which is probably going to keep things more on a flat level. Now, if it starts to go down, great, but what, it just, I'm rarely speechless, but I am when it comes to people who are waiting for something as opposed to
48:08 Speaker 02 running the numbers. The unaffordability has created this stall in people to actually even look at the numbers. And the numbers are insane. If you're at a $450,000 house, you know, or if you're looking at the changes that might happen, let's, let's talk about people thinking about, well, I want to wait for the market to crash. Okay, a 5% crash. The, that's where, when you're looking at, I think I did that, yeah, on a $400,000 house. The difference is $115 a month.
48:41 Andrew Giancola? Yep.
48:42 Speaker 02 So if the market corrected 5%, and if the market dropped 10%, it's like 225 or 230 a month. A 10% correction has only happened in 2008, in the last 90 years. So, waiting for that math, and so then what you have to do is you have to understand the other side of the math. People look at the difference now between renting and buying, and they think that's the, the one economic factor. That's the signal. But what they're looking at is they're looking at three columns. They're looking at the upfront cost, the current rent they pay, and then the potential mortgage they would pay. But the real formula, for all my spreadsheet nerds, is six columns.
49:24 Speaker 02 There's an upfront cost, there's the rent, there's the mortgage. But now you add these three, there's the potential appreciation, the principal reduction that you pay every year that you're paying into it, the tax benefits, and then you even could add the inflationary control that you're gonna have in a fixed income product that's not going to go up, unlike your rent. And I ran the numbers on that for my annual rent versus buy. Even it today, we ran it at 6.25, I think. You know, we looked at people who are looking at a $540 a month difference, because that was the exact difference between a rent and a PITI for the median home in America.
50:07 Speaker 02 The first year, the buyer, their savings and gains were 16,000 versus the renter at 9. And the second year was 17,000, the buyer, and 8,000 to the renter. And the third year was 18 and 7. So it keeps increasing and for the buyer and keeps decreasing for the renter. And I didn't even add in, I was being, tilting the scales in favor of the renter. You could also make maybe another two or three grand if your tax situation works out that you can go beyond the standard deduction, itemize your taxes, and that's something that home buyers can use and home renters never get a chance to touch.
50:46 Speaker 02 So I could talk the math on that for hours, but the biggest math that I see that knocks people's heads off is... It hasn't corrected 10% in years and years and years. And if it does go down, it's probably going to go down slowly. And you're waiting for a difference of a hundred bucks. But the time in, that's where you make that crazy money.
51:09 Andrew Giancola? It's a time value. Exactly. The time value of money is that the big piece that a lot of people miss out on when they wait too long. And I think that's, uh, that's one of those areas. Once you run total cost of ownership, you understand where your total cost of ownership is, then you can definitely figure this out pretty, pretty quickly. Well, David, thank you so much for coming on here. This has been incredibly valuable. Can you tell people where they can find out more about you, your podcast, website, everything else you have going on?
51:30 Speaker 02 Yeah, it's all at howtobuyahome.com. The podcast is the How to Buy a Home podcast, and that's everywhere that you listen to your podcasts. We have people that come in and I love, they walk the dog, do the dishes, commute to work. And then like two months later, they call me and go, bro, I didn't know all this math. And then that's where they go to howtobuyahome.com. And we've got a very small group of specialized people that understand this all over the country that can help people see the real math. Because the American dream, it's not gone, it's just hidden. And it's time that first time home buyers got the real education that unfortunately just isn't being taught by, you know, the, what was the stat?
52:14 Speaker 02 71%, 71.1% of all licensed agents sold zero homes in 2025. So make sure you talk to the right people.
52:25 Andrew Giancola? Exactly. I completely agree. Well, David, thank you so much again for coming on here. We truly appreciate it and we'll have, definitely have you back on again for the, when the market shifts again.
52:34 Speaker 02 Thanks, Andrew.
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Previous Focus on THIS in Retirement (Everything Else is Noise) Next How to Manage Your Money (and Still Enjoy Life) Page updated October 30, 2026 · transcript and summary are machine-generated